The Impact of the Global Economic Financial Crisis on the Role of the Management Accountants in an Emerging Economy

Abstract

The impact of the global financial crisis on financial sectors of many countries including Nigeria has been significant. Losses to investors and borrowers have been extensive, widespread liquidity problems and insolvencies have led to huge government bail outs involving many of the financial institutions around the globe. As a result, the global financial system ground to a halt and economic activity crumbled as the inter-linkages between national financial systems provided the conduit for contagion to spread. What started with elevated losses on U.S. sub-prime mortgages market? The recent crisis has challenged financial experts to explain why the crisis developed, how it is unfolding and what can be done. The thrust of this paper, therefore, is to appraise the role of Management Accountant for sustainability of our financial system. In gathering relevant data for this paper, the secondary source of data collection was used. It was found out that Management Accountants have very important roles towards ensuring safeguarding of resources, promoting operational efficiency and soundness in organisation. However, these roles of Management Accountants therefore, recommend among other things that Management team and introduction of effective control mechanism to ensure the correctness of the effects of global financial meltdown in our corporate organization performance.

Management Accounting Change as a Sustainable Economic Development Strategy during Pre-Recession and Recession Periods: Evidence from Russia

“…Our analysis, however, has revealed that during 2010-2018, the organizations of all sizes, sectors, and types of territories responded to the deterioration of economic situation by changing the management accounting practices. This supports the findings of many studies related to crisis-accounting relationship, particularly, Bangara's [87] view that increase in the volatility of internal and external environments surrounding an organization has an impact on the adoption of management accounting practices, Endenich's [88] assertion that economic crisis represents a crucial driver of management accounting change, Van der Stede's [67] and Edogbanya's [89] appraisal of the impact of economic recession on control mechanisms and their role in the correction of the effects of economic decline in corporate performance, and Simons' [90] finding that the transformation of strategic priorities in the times of economic uncertainties influences the manner in which accounting controls are used.…”

“…In many prior studies, firm size has been employed as an important firm characteristic. Size effect, the relevance of firm size in determining the dependent variables, has been observed by Dang et al [89], Baker and Hall [118], Coles et al [119], and Frank and Goyal [120], among others. Vijh and Yang [121] found that the sign and significance of firm performance variables were sensitive to different firm size measures.…”

Managing the Impact of Economic Recession on Nigerian Economy: The Role of Management Accountants

“…Another important function of the management accountant is 'control', he helps in carrying out control functions in an organization by producing a performance reporting which seek to compare the established targets with the actual outcome for each of the responsibility centers within the organization. Management accountants provide necessary information to managers and strategically collaborate for the good of the organization by assisting managers in their administrative tasks, [7].…”

“…The market current ratio also declined 15% to 3.23. [7] observed that the recession impacted adversely on Nigeria's oil revenue. Correspondingly, [10] stated that due to the recession, petroleum prices increased tremendously leaving several financial houses downturned at the danger of imminent crisis.…”

“…The challenges threw in by the recession made management accountants to contend between equalizing the pressure on high cost of production and overcoming the pressure of rising inflation by increasing the prices of some goods in already compelled customers [7]. [8] & [9] showed that the rate of inflation grew to 18.44% in Nov. 2016 from 9.55% in Dec. 2015.…”