Question

Current trends in management accounting seem to focus on theaccountant as a “strategic partner” in the overall success of thebusiness strategy. The continuous evolution of technologicaladvancements surrounding the ability to access financial andoperational data on an almost real time basis is a huge asset tothe accountant in the strategic partner role.

In this highly competitive business environment, companyexecutives must have access not only to historical data regardingoperations but also to predictive data for the future of thebusiness’s needs, such as inventory, raw materials, and costs oflabor. Since accounting reports are generally geared toward theguidance of generally accepted accounting principles, which has aprimary focus on historical costs and reporting historical events,extra work must be done to obtain and manipulate the informationavailable and useful to the company in terms of futurepredictability.

In order to resolve this need for duplicative internal work andto make financial reporting more timely, do you believe thatgenerally accepted accounting principles should move more to a fairvalue and real time type reporting principles needed in amanagerial accounting environment rather than historical cost? Whyor why not?