Opportunity for Improvement of Trust in Project Information

Relations between Project Management

and Management Accounting

COMMENTARY

By Muhamed Abdomerovic, D. Eng., Civil

North Carolina, USA

What may happen to a project if a team member from an engineering school did not hear about accounting or a team member from a business school did not earn project management credits? Then, the communication between team members depends very much on in-house education programs and practices to deal with integrated knowledge and save the project. In short:

• Accounting is an established discipline (Brown and Howard 1969, Gobourne 1973, Horngren 1981, Kieso and Weygandt 1995), applicable to all human activities and related monetary data that need planning and control. Accounting across all types of businesses and management levels is a permanent function.

• Project management is a discipline with evolving views (Fleming 1988, Wideman 1991, Muirhead and Simon 1999, Hofman, Kohut, and Prusak 2022), applicable to any work and related scope, time, cost, and other data that need planning and control. The project begins with the formal organization and ends when handed over to the customer.

The education and practice of project team members may be inadequate when compiling and exchanging data among peers. For example, accounting, a long-time management discipline, is overlooked by the most popular project management books (e.g., the PMBOK Editions) and consequently by the mass of project team members. Only a few books have found that management accounting and project management complement each other (e.g., Fleming 1988). This paper reminds users of management accounting and project management to join efforts in building quality and trust in project information.

Both Project Management and Management Accounting, with different terminology, emphasize the ability to manage:

• planning and control
• predetermined objectives
• estimation of fixed and variable resources and costs
• cost allocation, accumulation, and assessment
• costs status, progress, and forecast
• cost performance reporting

The above claims selection, application, and limitation differ depending on business type, regulations, requirements, suggestions, or recommendations imposed by different commissions, government agencies, client requirements, and others expressed by definite language, documents, and management techniques, which may result in the communication gap.

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How to cite this paper: Abdomerovic, M. (2024). Opportunity for Improvement of Trust in Project Information: Relations between Project Management and Management Accounting; PM World Journal, Vol. XIII, Issue XI, December. Available online at https://pmworldlibrary.net/wp-content/uploads/2024/12/pmwj147-Dec2024-Abdomerovic-Opportunity-for-Improvement-of-Trust-in-Project-Information.pdf

About the Author

Muhamed Abdomerovic

North Carolina, USA

Muhamed Abdomerovic, D.Eng., Civil, has learned project management planning through information technology, construction, process industry, and energy sector projects exceeding a $12.5 billion budget. While employed in various positions, he has published over 50 journal articles, six Project Management World Congress proceedings, and five books. He has contributed to project management standards by introducing project management system logic and a holistic understanding of the PMI’s PMBOK Guide. He graduated from the University of Sarajevo with a Diploma in Civil Engineering and joined the International Project Management Association in 1972. He can be contacted at mabdomerovic@gmail.com