Barings Bank and Societe Generale Corporate Governance Issues

Management Accounting (MA) is noted as one of the core areas in accountancy that responds to the ever changing requirements of businesses. During the past few decades, there have been numerous changes in the external business environment. The findings by academia have pointed to globalization, information technology, an increase of shareholder power, heightened environmental, and social awareness of consumers, government legislation and cultural transformations as the key forces. In the advent of these forces, fundamental alterations in management practices and organizational structures have occurred in sync with the transformation of management accounting.

Globalization has not only rendered location of businesses to be immaterial but also leads to growth in strategic joint ventures (May, 2002) as well as the development of management and accounting into multi-disciplinary professions as noted by Parker (2002). Consequently, this has led to increased competition especially from second and third world nations which indirectly augmented the bargaining power of customers. On another note, it has also affected how a management accountant fits into a corporation. As globalization promotes the creation of multinational corporation’s (MNC’s), a management accountant must be familiar with government legislation of relevant countries and be well red on key issues with regards to politics and economics (Ibid). Besides that, advances in information technology have created a huge impact on organizational structure as well as the finance function. This can be seen as standard account and budget preparation duties have been take over by computer software provided by tech companies such as XERO and UBS (May, 2001). Accordingly, this has been deemed to reduce the accounting profession towards redundancy. Besides that, the rise in shareholder power has compelled businesses to concentrate on providing shareholder value (Ibid). Therefore, it is no longer adequate to compute...