The Relationship between Management Accounting and Management Control: Features and Phases of Implementation at the Enterprise

Abstract

The article highlights current practices of implementing the management accounting and control system, with outlining its promising areas. The relevance of this research theme stems from substantial changes in the business management nowadays, resulting from the increasing competition, rapid technological change, diversification of business and sophistication of business processes, which requires modifications in the system of business accounting and analysis by addressing shortcomings in the accounting.

The existence of essential differences in ways and methods by which the management accounting is organized and kept is pointed out. A review of technical approaches to organization of the management accounting showed the lack of a single approach due to the necessity of addressing information needs of managers, business activity specifics and the structure of the accounting and analysis system. Three types of approaches to the management accounting organization were outlined, strategic, tactical, and project-based, with examining their features. A comparative analysis of operational, tactical and strategic management in the context of the management accounting and control system was made. It is argued that a crucial difference between the three levels of management (operational, tactical, strategic) is the type of the system’s management depending on the response to events, due to which the management accounting and control is organized in a way to allow a business to operate on the going concern assumption. However, businesses may use various tools within the existing management accounting and control system, due to varying proportions between the objectives to be achieved at operational, tactical, and strategic level. The author comes to the conclusion that the management accounting and control should be organized by the combined approach involving a synthesis of project-based and strategic approaches, with the management accounting and control implemented by businesses as an integrated project.