The Role of Management Accounting in Modern Business Decision-Making Assignment

1. Introduction - The Role of Management Accounting in Modern Business Decision-Making Assignment

Management accounting plays a vital role towards modern business through provision of financial and non-financial information in support of the strategic decision-making process. Based on the last two decades, the discipline towards making significant changes has undergone advanced friends in data-driven technology to increase focus on sustainability and corporate responsibility along with globalisation (Kraus et al., 2022). Companies have been found to navigate a complex yet dynamic business environment in account which has adopted new challenges and health ensures companies to maintain a competitive age in the dynamic market.

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ITV has been existing as a leading British media company which serves as a vital example towards embracing changes in the business world (ITV, 2023c). Through the implementation of innovative practices and serving a focus on social responsibility, has been able to manage relevant evolution in the dynamic market. Therefore, this report has analysed the key changes in terms of management of accounts and examination for the corporate social responsibility and ethical applications for evaluating the role of management accountant towards risk management and long-term decision-making practices undergoing in ITV.

2. Task 1: Evolution of Management Accounting

2.1 Key changes in management accounting over the past two decades. Impact of technological advancements, globalisation, and the increasing importance of non-financial metrics

Over the past 2 decades, the process of management accounting has been found to evolve significantly due to the existence of factors like technology advancement, increased use of non-financial metrics and globalisation (Kraus et al., 2022). The adoption of innovative technology like artificial intelligence (AI), data- analytics and automation has impacted towards transforming the traditional accounting practices existing in the majority of organisations. Utilisation of these tools enable higher accuracy forecasting, predictive modelling and real time data analysis, which in turn helps businesses react promptly for data-driven decisions and change accurately with the market dynamicity (Bao et al., 2024). Moreover, globalisation has impacted in terms of introducing international accounting standards within the organisations which has helped them to adopt a mode of consistent financial reporting practice to manage the upcoming risk aligned with cross border operations. Non-financial metrics have obtained prominence towards management accounting of ITV with an increase in recognising the importance for employee wellbeing, sustainability and customer satisfaction serving as the indicators for long term success for global companies (Goretzki et al., 2021). Moreover, the inclusion of environmental social and governance (ESG) factors within the accounting practices have been found to be a common approach which helps evaluate the overall performance of a company and along with their stakeholder expectations (Ahmad, Yaqub and Lee, 2023).

2.2 Examples of how ITV have successfully adapted to these changes, highlighting the benefits they have gained

ITV has been found to make success with the aforementioned changes through integration of technology Solutions into accounting processes with an expansion towards non-financial metrics focus. For example, ITV has used Data Analytics for tracking of audience behaviour as well as Optimisation for programming decisions which has further resulted in higher advertising revenue due to increased viewership (ITV, 2023a). Moreover, the adoption of sustainability reporting has resulted in bitter carbon footprint assessment which has for the result towards commitment of social and environmental concern addressing.

2.3 Suggestion on continuation of adapting and competitive advantage that ITV could gain

Focusing towards maintenance of a competitive advantage has helped ITV leverage AI towards enhancement of predictive analysis as well as include routine accounting tasks through automation. This has finally help free management accountants from the focus of strategic initiative helping in better task management through advanced technologies. Moreover, implementing and integrated reporting has allowed ITV the combination of financial and non-financial data to provide a holistic view based on the performance of the company in addition to the communication value of stakeholders (ITV, 2023). Therefore, the evaluation of management accounts has help ITV to adapt with the dynamic demands of the modern business domain, helping in gaining better responsiveness from both financial and non-financial challenges through agile methodology as a competitive advantage.

3. Task 2: Research on Ethical and CSR Responsibilities

3.1 Ethical and corporate social responsibility (CSR) obligations of management accountants in today’s business environment

Management accountants have been observed to exist with significant ethical responsibilities which include integrity towards financial information ensuring accuracy and maintaining confidentiality and transparency towards providing unbiased reports. Through an increase for stakeholders and regulators the ethical role associated with management accountants has been found to expand the promotion of addressing social responsibility within business practices through sustainability measures (Khuong, Truongan and Hang, 2021). The existence of an ethical management accounting father supports the decision-making process existing within the companies which are not entirely profit revenue but also includes broader impact on society and the business environment.

Corporate social responsibility (CSR) has been existing as a crucial focus for organisations like ITV with an influence on management accounting practices in integration of sustainability matrix within decision making process (Wu and Jin, 2022). In this context, management accountants have been found to play a vital role towards monitoring, tracking and reporting of these specific metrics and further assessing the financial implications associated with CSR initiative (ITV, 2023b). Moreover, advising on socially responsible investment has been associated with the professional rule of management accountant.

3.2 Link with Social Purpose strategy of ITV and process of strategy achievement by management accountants

The social purpose strategy of ITV exemplifies with the commitment of the company towards ethical business practices and corporate social responsibility (ITV, 2023d). This strategy focuses on resolution of key social issues like climate change inclusion and diversity along with mental health of employees. Management accountants and working at ITV have been found to contribute towards the strategy by undergoing financial evaluations on the impact of the initiative like benefits and cost (Ojra, Opute and Alsolmi, 2021). These are further associated with implementation of sustainability programs along with resource allocation towards community projects. In comparison to ITV, IKEA is a well-known kitchen retailing company who has been associated with having a strong social purpose strategy for operating on larger scales, focusing on stronger CSR and meeting the significant CSR expectations (IKEA, 2023).

Figure 1: Stakeholder analysis for ITV

(Source: ITV, 2023a)

The UN SDG has been found to get connected with ITV in terms of the implementation of SDG 3 for good health and wellbeing, SDG 4 for quality education and 5 for gender equality, 8 for economic growth and 17 for partnership actions (ITV, 2024).

Reflection

With support to the Social Purpose Strategy of ITV, better effectiveness among the management accountants might be developed through utilisation of comprehensive frameworks which aids social and environmental initiative and performances of the organisation. This is possible with the involvement of setting a quantifiable target like carbon reduction goals or report towards the progress of the strategies through utilisation of the diversity metrics (ITV, 2023d). In addition, involvement of social impact assessment within this decision-making process might help ensure the business practice ongoing within ITV and try to align with the stakeholder expectations and ethical standards of the company.

4. Task 3: Long-Term Decision Making and Risk Management

4.1 Responsibilities of management accountants in ensuring that risks are adequately considered and communicated to stakeholders

Management Accountants are involved with a crucial responsibility for ensuring and adequate consideration about long-term risk development and proper communication with stakeholders to meet these risks (ITV, 2023a). The role is not only confined within financial analysis, but also extends beyond the financial management towards inclusion of risk assessment and analysis of impact of these risks towards strategic objectives to meet the risk that occurred. Therefore, involvement of an effective risk management practice helps identify potential threats by the management accountants in addition to analyse the likelihood and impact of the risk and further develop strategies for mitigation of the identified risks.

4.2 Evaluation of techniques used by ITV to identify, assess, manage and monitor risk

The role of management accountants is to analyse the risks existing within the company and monitor the possibility of further risk prediction, mitigation and analysis of the situation of the company (Ala-Heikkilä and Järvenpää, 2023). ITV has been found to implement several techniques towards assessment management and monitoring of risk which has been highlighted within their annual report (ITV, 2023c). These techniques consist of a risk identification process through assessment of financial strategy and operation and risk. For example, active monitoring of changes within the technological advancements, regulatory requirements and audience preference by prioritising the regulators, employees and customers and investors which might impact the revenue streams of the company due to different categories of MA responsibilities (ITV, 2023c). Therefore, the company has used scenario analysis for evaluation of potential impact of various risk factors which has been determined through appropriate response making (ITV, 2023b). This approach has enabled ITV towards preparation of adverse outcomes like decrease in advertising revenue or an increase within the competitive market in terms of streaming industry.

In addition, the risk register management framework of ITV includes regular reviewing and update through utilisation of risk registers through ensuring the tracking of emerging risk and identifying the adequate mitigation plans (identification, assessment, manager and monitoring of risk) (Kostirko et al., 2023). For instance, ITV has been found to assess risks associated with states of cyber security through implementation of data protection measurement which has been conducting a regular penetration test (ITV, 2023b). The environment of the management account and within this process has ensured a financial implication of evaluating better risk and mitigating them with innovative strategies which has reserved towards better communication with stakeholders. Furthermore, a clear and effective communication has been found to be delivered towards the investors, regulators and board members of ITV.

5. Conclusion

Based on the overall discussion, it has been observed that ITV has been utilising various technological advancements for focusing on the financial and non-financial CSR practices and risk analysis within the company in terms of globalisation. Moreover, the ability of the company to implement integration technology within accounting professionals has helped leverage data integration and risk management through social purpose strategy. This has helped ITV to continue towards supporting a sustainable business practice for ensuring responsive and agile behaviour in the dynamic market.

References

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