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Burns and Scapens’ View on Role of Management Accountant

In ACCA Advanced Performance Management (APM) exam, one of topics under strategic management accounting in Section A is assessing the changing role of the management accountant in today’s business environment as outlined by Burns and Scapens. In this article, we will go through the change from conventional management accountant to a new role identified by Burns and Scapens.

Accounting has traditionally been viewed under two segments of financial accounting and managerial accounting separately. Financial accounting is mainly concerned with the accuracy and compliance of the financial records for the external users of the business reports. Management accounting on the other hand provided information on financial and management practices to the business managers.

In practice, management accounting is the identification, analysis, and provision of financial information to the business managers to achieve the business objective of the organizations. Management accounting practices have evolved a lot in decades, the criticism remains on the use of financial accounting, and the practical performance of the management accountants. Management accounting practices in theory and in practice had seen an increased gap.

The Conventional View of the Management Accounting

The conventional view states that management accounting is the use of accounting data to provide information to business managers. The information includes planning and controls for the internal users of the business. The critiques argue that management accounting practices started with first use of financial accounting.

Historically, management accounting remained focused on cost allocations, primarily stressing on the direct material, direct labor and overhead costs. The very concepts of cost accounting developed and reshaped into renewed management accounting concepts later on. The use of cost information and accounting information combined then evolved to the two main fundamental concepts of management accounting a) planning and b) controls.

The conventional management accounting concepts started to develop on the basis that accounting information can be best utilized for planning and internal controls for the managers.

Also, the traditional management accounting the relevant costing decision is based on the assumption that managers or decision makers seek profit maximization. That concept of profit maximization led to the fundamental objectives of incremental cash flows.

One of the major criticism of traditional management accounting remained in its developing stages was the use of mathematical analysis models. That related to theoretical calculations but offered little practical solutions. The mathematical analysis models and cost accounting measures were developed to measure and control the production costs.

Management accounting developed on the basis of a wider use of accounting information for planning and control purposes. Both cost accounting and management accounting frameworks worked closely that led to some common and overlapping definitions of cost controls and managerial accounting in the 1960s.

The Traditional view of management remained concerned with the resource allocation. The traditional view, in summary, defined the role of management accounting in the following sections:

  • Planning: the core of the management accounting that emphasized on the planning factors of cost-volume analysis, cost decisions, economic order quantity, and product mix, etc.

  • Classification of costs: use of mathematical models, classification of costs into fixed and variables costs, overheads, forecasting costs.

  • Costing methods: variable and absorption costing, process costing,

  • Controls: responsibility accounting, budgeting and standard costing, variance analysis.

Burns and Scapens’ Framework 2000

Burns and Scapens developed the notion of financial controls becoming business support. The traditional role of accountants remained close to the financial accounting and maintaining the accuracy of records, which formed the basis of information for outside users.

Burns and Scapens studied the transformation of management accounting concepts historically. Their Burns and Scapens’ framework (2000) was developed on the ideas of old institutional economics, and evolutionary economics. Their study focused on how new management accounting systems bring rules, these rules turn to routines and these routines become institutionalized within an organization.

Burns and Scapens' Framework, 2000 Page 9

Burns and Scapens argued that organizations are the taken-for-granted assumptions that inform and shape the actions of the individuals that shape the organization. The framework establishes a relation in rules and routines followed by managers within an institute, and the effect of institute to form these routines and rules.

Simply put, the managers following routines and rules affect the institute and vice versa. This leads to the change in the management accounting roles. The framework by Burns and Scapens is depicted through a correlation between institutional realm and the realm of action through four key elements (or stages) which are encoding, enacting, reproduction, and institutionalization.

The first step is described as the “encoding” of the existing assumptions through the institutional realm describing the organizational values and guidelines. These existing rules and routines become the embodied parts of the newly introduced organizational values. Burns and Scapens argued that even the radical changes to an institutional culture would be the path-dependent.

They defines the next step b as enactment of the change through day-to-day activities of the managers. This forms a direct relation between the encoded rules and routines and the actions taken by the institute managers. As the encoded institutional principles transform into actions,

Burns and Scapens argued that these actions are usually include the conscious choices. These actions are formally driven by the institutional knowledge i.e. the predefined parameter of the change process and new set of rules embedded. Their words showed that enactment stage often witnesses the resistance to the change introduced by the institutions. Particularly, the resistance is prominent where the managers have greater power and the “rules and routines” haven’t been through the change for long.

The third stage c represents the reproduction of the rules and routines. As the institution managers understand the change process, take actions, and embed the new rules, they reproduce the “routines and rules”. The reproduction may be conscious and/or unconscious change. The conscious change happens with the developing understanding of the new rules that become actions and reproduce over time. The unconscious changes happen when the new rules are not adequately understood by the managers, but adapted through the institutional realm.

The last stage d represents the realm of action of institution managers becoming the new normal through “institutionalization”. Through time, the embedded change or new rules are enacted and repeated become actions. These actions over time form the reproduction and become institutionalized in the final stage of the change.

Three Forces of Management Accounting Change

Historically the role of management accountants remained close to that of cost and financial accounting. The definitions of cost controls, evaluation models, and diversity in the management accountants’ roles became the catalyst for redefining the management accounting concepts.

The current role of management accounting is defined and the change agents have come a long way from that of merely reciprocating their counterparts of financial accountants. Their roles have evolved from the record-keepers to that of business managers.

Burns and Scapens believe management accountants have become more business support managers than financial accountants. The change in management accounting has been driven by three main forces.

1. Technology and Management Accounting

The world has transformed with the advent of IT innovation, management accounting has adapted the trends too. Business managers like management accountants had an access to business tools such as information systems. As the information system evolved to tech-based MIS, the management accountants became proactive decision makers.

The amount and speed of the data turned into information has remarkably reduced the decision making process. The management accounting’s edge over financial accounting proved to be the concern with data security and adaption to changes.

In fact, management accountant claims to be change managers embedding technology based solutions to the business processes through management accounting techniques.

2. Management Structures

Management structures have changed over time. Organizations are adapting to more decentralized power and resource allocations to harness the flexibility and responsibility of the regional centers. The autonomy of power and resource allocation gave birth to “resource centers” of the organizations.

The competitive nature of the businesses and time constraint demand more flexibility and decision making powers to the decentralized centers. Management accountants in these centers now provide business decisions inputs through both financial and management accounting tools.

3. The Competition Force

Increased competitive business environments require more flexibility in the roles of management accountants. Businesses require more innovative and dynamic responses to their competitors. Financial accountants traditionally focus on profit maximization, interpreting the financial records and stressing on the accuracy of financial statements. However, the competitive nature of modern businesses demands more diversity in the role of management accountant for long-term decision making.

Business environments change rapidly with the innovation of IT and changes to the management information systems. The key to success for management accountants is the fast adaption to these changes. The role of management accountants needs to build around the business support managers rather than the traditional role of costing and accounting.


Burns and Scapens’ Framework has significant impact on the change of management accountant role in modern organization. The change is driven by three forces stated. Nowadays, we see the forces are even stronger than when the framework was proposed.

In ACCA APM exam, it’s a challenging question that not many students can provide good answer. In March 2020 exam, it required an explanation of how the role of the management accountant is changing given conditions at the company, broadly and using the three drivers of change identified by Burns and Scapens. It was poorly done. We hope this article helps you to understand clearly of the change of management accountant’s role that you can give a good answer in exam.

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