The Role of Management Accounting in Supporting Value-Added-Based Product Innovation

Abstract

In the era of global competition and digital transformation, value-added product innovation is the key to a company’s competitive advantage. This study aims to examine the strategic role of management accounting in supporting the innovation process through a literature review approach to several academic sources publishedin last five years. The results of the study show that management accounting not only plays a role in recording and controlling costs, but also provides strategic information for feasibility evaluation, decision-making, and innovation performance measurement. Systems such as activity-based costing, target costing, and balanced scorecards have been proven to support value creation in product innovation. In addition, cross-functional integration and the use of information technology strengthen the contribution of management accounting to the success of innovation. However, structural barriers and competency limitations are still the main challenges that need to be overcome. The study concludes that the transformation of management accounting roles towards a more strategic and collaborative direction is an important prerequisite for producing value-added and sustainable product innovations.