Management Accounting in the Digital Economy: Evolution and Perspectives

Management Accounting in the Digital Economy: Evolution and Perspectives

Sorinel Căpușneanu (Titu Maiorescu University, Romania), Dan Ioan Topor (1 Decembrie 1918 University, Romania), Dana Maria (Oprea) Constantin (The University of Bucharest, Romania) and Andreea Marin-Pantelescu (The Bucharest University of Economic Studies, Romania)
DOI: 10.4018/978-1-7998-1005-6.ch011

Abstract

This chapter presents the evolution and perspectives of management accounting in the digital economy. The main objectives of this chapter are to present the different conceptual approaches of the digital economy and Industry 4.0, the B20 pillars and their impact on the management accounting, the role of management accounting and of the management accountant in the new economy, forecasts and solutions regarding the adaptation of the management accounting to the digital economy, and cost management of the implementation of innovative information technology. All aspects presented are based on national and international professional studies and attempt to present the current state of the themes addressed. The chapter ends with the author's conclusions regarding management accounting in the digital economy. Through the authors' contribution, the chapter offers perspectives and solutions to increase knowledge to implement information technologies and adapt accounting management to these innovative waves.
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Introduction

The implementation by companies of innovative digital technologies contributes to the expansion of social and organizational effects, affecting to a certain extent the operational and managerial economic processes within them. The impact of digitization also has consequences on the behavior and actions of company staff. This impact is also felt on the information and staff dealing with a company's accounting. Management accounting follows an entire process of redefining the shape taking into account the technical, behavioral and organizational dimensions (Bhimani, 2003). The expansion of the IT industry has led to increased organizational and environmental changes. This has created an intense relationship between management accounting, strategic management, performance management and information technology. Management strategies and management accounting innovations are key success stories and decisions are based on economic and social gains and losses (Oncioiu et al., 2017).

The main objectives of this chapter are: (1) presenting the conceptual approaches of the digital economy and Industry 4.0, (2) presenting the impact produced by Industry 4.0 and the digital economy on management accounting, including proposals for possible solutions; (3) the role of management accounting and the role of the management accountant in the digital economy; (4) cost management and digital economy, and (5) predictions about major trends in management accounting.

Key Terms in this Chapter

Industry 4.0: Also called the 4th Industrial Revolution, Industry 4.0 is the trend of automation and data exchange in today's manufacturing technology, including: cyber-physical systems, the Internet of Things, cloud computing, and cognitive computation.

Digital Security: How to protect information from the Internet and computer files against intrusion by external and unauthorized users.

B20: The voice of the private sector of the G20 community and addresses the challenges and global priorities defined by the G20 countries by building a solid consensus among business leaders, international organizations and civil society on how they should be addressed.

Digitization: The process of converting information into a digital format where information is organized in bits whose final result consists of representing an object, image, sound, document or signal by generating a series of numbers describing a discrete set of points or samples.

Activity-Based Costing (ABC): An accounting method that identifies the costs of (indirect) activities and then allocates these costs to the products. Allocation of product costs to products is done through cost drivers.

Management Accounting: The process of cost and business analysis for preparing internal financial reports to provide the necessary information to managers in making appeals and achieving business objectives.

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