Management Accounting Frontiers

MAF Overview

TABLE OF CONTENTS

Editorial: Artificial Intelligence and Cost Management

Michael S. C. Tse^a

^a Victorian Institute of Technology, Australia

Download: https://doi.org/10.52153/prj0342009

Food Ingredient Reformulations: Standard VS Dynamic Costing in the Age of AI

Janek Ratnatunga^a

^aInstitute of Certified Management Accountants, Australia

Abstract

In response to fluctuating costs and regulatory constraints, some Australian food manufacturers adopt the practice of dynamic food ingredient reformulation. The practice highlights the inadequacy of standard costing systems in managing the volatile environment characterised by tariffs, inflation, and supply chain disruptions.

Drawing on the findings from a study conducted by the Australian Broadcasting Corporation, this article examines the challenges posed by dynamic food ingredient reformulation to standard costing systems and the potential of dynamic costing systems assisted by Artificial Intelligence (AI) to address these challenges.

AI could be adopted to facilitate dynamic costing systems that enable food manufacturers to price products dynamically. However, the usefulness of such systems would be limited without the support of technologies such as on-demand printing and QR codes for displaying up-to-date ingredient information on the products. Overall, this article calls for innovative approaches to adapt to the rapidly changing market conditions while ensuring regulatory compliance and maintaining consumer trust.

Keywords: Dynamic Costing; Food Ingredient Reformulation; Pricing

Download:  https://doi.org/10.52153/prj0726009

The Dawn of the Agentic Era: Cost Implications of Transforming Work and Society with Autonomous AI Agents

Janek Ratnatunga^a

^aInstitute of Certified Management Accountants, Australia

Abstract

This article explores the transformative potential of autonomous Artificial Intelligence (AI) agents in reshaping work and cost management systems. As advancements in AI lead to the emergence of agents capable of independent actions and decision-making, industries face profound shifts in labour dynamics and overhead cost structures. The article examines the evolution from traditional labour costs to the potential for direct ‘digital labour’ costs, challenging existing cost allocation systems. Through various case studies, including Netflix’s use of generative AI in visual effects, the article illustrates how AI agents can significantly reduce operational costs while enhancing efficiency across sectors like healthcare and manufacturing. However, this transition raises ethical concerns and governance challenges, necessitating a collaborative approach to establish guidelines that prioritize transparency and accountability. The article also raises the cost-benefit of deploying AI agents in scale, as recent cases have shown that these costs can quickly exceed corporate AI budgets. Ultimately, the article advocates for responsible deployment of AI agents, emphasizing the need for investment in human skills and ethical practices to ensure a balanced integration of technology that benefits society as a whole. As we enter the Agentic Era, the interplay between AI and human labour will redefine the future of work, prompting critical questions about the nature of jobs and the role of cost management in an increasingly automated landscape.

Keywords: Artificial Intelligence; Cost Management; Direct Labour

Download: https://doi.org/10.52153/prj1051009