CHAPTER 1: MANAGEMENT ACCOUNTING PRACTICES IN CHANGING BUSINESS

ENVIRONMENT
QUESTION 1 (TEST MAY 2021)
The business environment never rests. Regulations are always changing, global competition
continues to increase, and technology provides continual disruption. Management accounting
is always evolving due to changes in the business environment (Graybeal, Franklin & Cooper,
2019)

Required:

Discuss four (4) ways management accounting could contribute to accomplish and sustain its
organizational competitive advantage in this globalization era?

(Total: 10 marks)
QUESTION 1 (TEST NOV 2021 V2)
Today’s business environment is emphasizing higher quality products, lower prices and costs,
global competition, and meeting and anticipating customer needs. It requires dynamic
management accountant to adapt the changes in market environment that have greater impact
to an organization. The future of management accountants depends on how they acclimate
and respond to the changing and emerging technologies.
~ Dahal RK, 2019
Required:
Discuss FOUR (4) roles of management accountants in helping business to remain
competitive in the globalization era.
(Total: 10 marks)
QUESTION 1 (TEST NOV 2021 V1)
Today’s business environment is emphasizing higher quality products, lower prices and costs,
global competition, and meeting and anticipating customer needs. It requires a dynamic
management accountant to adapt the changes in market environment that have a greater
impact on an organization. The future of management accountants depends on how they
acclimate and respond to the changing and emerging technologies.
~ Dahal RK, 2019
Required:
Discuss THREE (3) skills required by management accountant as the strategy to the company
in serving the needs of customers, supporting decision-making and managing the corporate
value chain.
(Total: 10 marks)
QUESTION 1 (TEST MAY 2022)
Management accountants are not only challenged to be proactive and outward looking; they
are expected to do the intellectual tasks of planning and making action plans or taking
corrective actions as their primary entrepreneurial outputs, providing innovative and new ways
for the businesses to respond to changes.

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Required:
Discuss in brief five (5) the roles of management accountants, particularly in the aviation
industry.
(Total: 10 marks)

QUESTION 1 (FINAL ASSESSMENT FEB 2022)

Management accounting provides essential information to the business in its planning,
evaluating, controlling and decision-making process. The rapid changes of business
environment recently into global and competitive business environment give significant impact
to any type of corporation. This requires management accountants to enhance their skills and
knowledge to be in line with the changes in the business environment (Mahfar and Omar,
2004)

Required:

Explain FOUR (4) main challenges facing management accountants in discharging their roles
and duties in a technology-intensive company.
(Total: 10 marks)

QUESTION 1 (FINAL ASSESSMENT JULY 2021)

Mega Kuasa Bhd (MKB) provides energy-related transportation services since 1997. The
company’s primary businesses include energy shipping and its related activities, and also
operating offshore terminal services. MKB set up Mega Maritime Academy in 2018, which
offers shipping and maritime education and training to its employees. MKB has been receiving
more than 4 business excellence awards since 2017; including an international business
excellence award for best Environmental, Social and Governance practices, received in 2020.
The company is committed to asset and service reliability, superior standards of health and
safety caring for the environment as well as the community and fostering an excellent culture
amongst employees. MKB is looking forward to venturing into new business opportunities
involving utilities and infrastructure development.
Required:
Being a newly appointed management accountant at Mega Kuasa Berhad, discuss four (4)
types of skills that you need to possess in order to perform in a technology-intensive and highly
diversified company like MKB.
(Total: 10 marks)
QUESTION 1 (FINAL ASSESSMENT JULY 2017)
Johnson and Kaplan (1987) in their controversial book have pointed out the issue of
inappropriateness of conventional management accounting techniques which offered little
capacity for providing useful and timely information for better decision and control in the
contemporary environment of rapid technological change and vigorous competition.
(Sulaiman, 2016)
Required:
a. Explain four (4) reasons why management accounting has lost its relevance in
responds to the changing in business environment.
b. Briefly discuss four (4) responses to the changing in business environment in
management accounting during the twenty-first (21) century.

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 (Total: 20 marks)

QUESTION 1 (FINAL ASSESSMENT JUN 2018)

The rapid spread and acceptance of globalization and the enormous developments in
information technology, has led to dramatic changes in the business environment. These
changes have brought new challenges not only to business but also to business education.
Business schools that prepare future managers in different disciplines are responsible for
closing the gap between the skills acquired by its graduates and the required skills by the
global markets. Current accounting education and the skill levels of accountants are not in line
with what is required in the dynamic environments of global business.

(Ehab and Sherif, 2003, Accounting knowledge and skills and the challenges of a global
business environment, Managerial Finance)

Required:
Explain three (3) ways on how management accountants can respond effectively to the
changes in business environment, as mentioned above.
(Total: 10 marks)

QUESTION 1 (FINAL ASSESSMENT JUN 2019)

A well-managed organisation focuses their objectives and strategies on building and
maintaining sources of competitive advantage. To be an effective contributor to strategy, the
management accounting information should be shaped around the organisation's sources of
competitive advantage (Langfield Smith, 2012).

Required:

Explain four (4) main roles of management accounting in formulating and implementing
strategies in order to remain competitive and relevant in the modern business environment.

(Total: 10 marks)

QUESTION 1 (FINAL ASSESSMENT DEC 2019)

During the 1980s, Kaplan and Johnson in the Relevance Lost book have levelled strong
criticism at the management accounting practices of the day. In response to these criticisms,
a number of innovative management accounting techniques have been developed across a
range of industries such as strategic management accounting and the balanced scorecard.
The new techniques have affected the whole process of management accounting and have
shifted its focus from a simple role of cost to a more sophisticated role of value-creating.
(AbdelKader and Luther, 2004)
Required:
With reference to the above, explain four (4) factors that contributed to the evolution of
management accounting.
(Total: 10 marks)

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MULTIPLE CHOICE QUESTIONS (FINAL ASSESSMENT JULY 2020)
1. Drury (2000) suggests that the main criticisms of current management accounting
practices may be grouped into the following subheadings EXCEPT
A. Traditional product costing systems provide accurate information for decision making
purposes. This is because traditional product costing use actual cost to determine
product costing.
B. Traditional or conventional management accounting practices follow and have become
subservient to financial accounting requirements.
C. Management accounting focuses almost entirely on internal activities and relatively
little attention is paid to the external environment in which the business operates
D. Failure to meet the needs of today’s manufacturing and competitive

2. The evolution of management accounting implies that:

A. Cost accounting has transformed into management accounting.
B. Management accounting is not relevant for strategic decision problems.
C. Management accounting is re-shaped to suit changes in business environments.
D. Management accounting is more complicated and losing focus.

3. According to Johnson and Kaplan (1987), management accounting lost its relevance due
to the following reasons EXCEPT
A. The provision of management information tailored for financial reporting.
B. The management accounting systems focus on short-term outcomes.
C. The use of non-financial targets to drive performance.
D. The information provided in management accounting reports is too aggregated.

4. Among the key factors that influence management accounting systems are listed below
EXCEPT:
A. Increased globalisation
B. Computerised manufacturing systems
C. The number of employees
D. Supply chain management

5. Which of the following is/are the management accounting responses to the changing
business environment?
i. Activity-based costing
ii. E-commerce
iii. Supplier cost analysis

A. i and ii only
B. i and iii only
C. ii and iii
D. i, ii and iii