MANAGEMENT ACCOUNTING

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MANAGEMENT ACCOUNTING
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Accounting Today?
In the game of business accountants aspired
to be players, or at least umpires, but were
relegated to the humble office of scorekeepers. 
Their revenge for this ignominy was to keep the
score in such a way that neither the players nor
the umpires could ascertain the state of the
game. R.G.A. Boland. Quoted in the Financial
Times June 14, 2003
Current Accounting Information
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What is Management Accounting Today? Analytics
for Product/Service Costing? More or less than
Cost Accounting? All skills of the accountant in
Business? Where does traditional financial
reporting fit? Financial Analytical
Techniques to support the Efficient Employment of
Resources
Role of Management Accounting
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External Market Environment
Suppliers
Auditors
Customers
External Reporting
Value Creating Processes Decision Support,
Planning and Control
Outputs
Inputs
Competition
Unprecedented Opportunity
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Inside
Design
Implement
Manage
Report
Audit
Professional Management Accounting
Public Accounting
Accounting Foundation, Commitment to
Ethics, Emphasis on Decision Support, Planning
and Control Commitment to Ongoing Continuing
Professional Development
The CMA adds a broad range of influence in the
accountants value chain
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CMA Exam Overview

Exam parts 1, 2, and 3 may be taken in any order
but must all be passed before registering for
Part 4

• Part 1 Business Analysis
• - 3 hours, 110 multiple choice questions
• Part 2 Management Accounting and Reporting
• - 4 hours, 140 multiple choice questions
• Part 3 Strategic Management
• - 3 hours, 110 multiple choice questions
• Part 4 Business Applications
• - 3 hours, 4 -7 Essay Questions

The CMA adds a broad range of influence in the
accountants value chain
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Part 1 Business Analysis
Financial Statement Analysis 25
Business Economics 25
Quantitative Methods 15
Global Business 20
Internal Controls 15
The CMA adds a broad range of influence in the
accountants value chain
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Part 2 Management Accounting and Reporting
Budget Preparation 15
External Reporting 25
Cost Management 25
Performance Measurement 20
Information Management 15
The CMA adds a broad range of influence in the
accountants value chain
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Part 3 Strategic Management
Investment Decisions 20
Strategic Planning 15
Strategic Marketing 15
Decision Analysis 25
Corporate Finance 25
The CMA adds a broad range of influence in the
accountants value chain
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Part 4 Business Applications

• Must complete Parts 1, 2, and 3 first
• 3 hours, 4-7 essays/problems
• All content from Parts 1, 2, and 3 included
• Plus Ethics, Organization Management,
  Organization Communication, and Behavioral Issues
• Computer-based but no immediate scoring

The CMA adds a broad range of influence in the
accountants value chain
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• Massive fracture of accountancy profession
• Finance professionals inside driving business
  performance through effective decision support,
  planning, and control - represent more than 90
  of finance function professionals in the U.S.
  (U.S. Bureau of Labor Statistics)
• External audit (checkers) - represent less
  than 10 of professionals
• Current imbalance audit dominates public
  perception
• Sarbanes-Oxley 404 focuses on inside financial
  staff
• Management accountants and finance professionals
  who design, implement, and manage an
  organizations control systems to drive business
  performance
• Domain of IMA Members finance professionals
  inside
• Building Quality In vs. inspecting quality
  in
• Provide strategic analysis and other highly
  complex services
• Partner with other executives as value creators

Unprecedented Opportunity
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Source Bureau of Labor Statistics website
(http//bls.gov/cps/cpsaat11.pdf).
US Market opportunity significant IMA present
market share is 1 AICPA current market share is
6
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Corporate leaders and decision makers said
their Number One financial challenge today is
getting accurate and actionable cost information
in a timely manner! Cost Accounting Students
still think boring class lectures lack real
world relevancy? Hey McFly! . . . Hello? . .
. is anybody home?
2003 EY Management Accounting Survey
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2003 EY Management Accounting Survey
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• Cost Management is a key contributor to achieving
  strategic objectives.
• Need for actionable cost information a top
  priority
• Despite importance, cost information is often
  impaired

• Implementing new cost mgt tools systems is low
  to medium priority
• Traditional mgt accounting tools remain in wide
  use.
• Decision makers require clear, quantified value
  proposition for new tools.

2003 EY Management Accounting Survey
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Tools of Todays Management Accountant

• Technical
• Analysis, Process Control, Standard Practices,
  External Requirements
• Leadership/Communication
• Listening, Presentation, Diplomacy, Change
  Management, General Management Skills
• Strategic
• Systems Thinking, Strategic Cost Management
  Techniques, Vision, Risk Management, Financial
  and Business Planning
• Entrepreneurial
• Marketing, Networking, Influencing, Risk Taking

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Leadership Communication Tools

• Stereotypes
• Numbers, Measurement focused
• Conservative Mindset
• Inquiry, Problem Identification
• Technical thinking, Procedures driven

• New Approach
• Big Picture
• Willing to engage unknown, Create discover new
  oppty
• Solution Outcome Oriented
• Integrated systems thinkers, Results driven

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Leadership Communication Tools

• Stereotypes
• Compliance Oriented
• Command, Control
• Standards driven
• Linear, Numbers Reliant
• Risk Averse
• Formal, Report Driven Comms

• New Approach
• Value/Ethics Focused
• Share Knowledge, Collaborate
• Innovative, Needs focused
• Strategic, Results driven
• Responsible Risk Taking/Management
• Interactive, Persuasive Comms

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Strategic Tools for Management Accounting

• Developed Strategic Cost Mgt Applications
• Activity Based Methods
• Target Costing
• Capacity Mgt
• Asset Mgt
• Process Mgt
• Extended Enterprise
• Lean Enterprise
• Theory of Constraints

• Emerging Applications
• Enterprise Risk Mgt
• Non-financial Performance Measurement
• Strategy Planning Execution
• Customer Lifetime Value
• Resource Consumption Accounting

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• Founded in 1919
• Mission To provide a dynamic forum for
  management accounting and finance professionals
  to develop and advance their careers through
  certification, research and practice development,
  education, networking, and the advocacy of the
  highest ethical and professional practices.
• Vision The worlds leading association for
  management accounting and finance professionals.
• Nearly 65,000 Members
• 85 U.S.
• 15 International

Institute of Management Accounting
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• Advanced-Level Professional Certification
  Program
• Certified Management Accountant (CMA)
• Powerful Networking Forums
• Annual Conference Exposition, Annual Student
  Conference, 250 local Chapters in 24 U.S.
  regions, online interest groups, email exchanges
• Professional Development Opportunities
• CMA Learning System, leading publications
  Strategic Finance Magazine and Management
  Accounting Quarterly

Benefits of Membership
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• Valuable Career Resources
• IMA Online Career Center
• IMA Research Center of Excellence (CoE)
• Provides actionable, practitioner based research
  in several topic areas technology enablers,
  strategic costing, internal controls, risk
  management, performance management, and ethics.
• Research will enable management accounting and
  finance professionals to be more successful
  business partners in a fast-paced,
  technologically advanced environment.

Benefits of Membership
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• Annual Leadership Seminar
• Semi-annual or quarterly seminars
• Annual Academic Roundtable
• Monthly membership meetings
• Student Chapters (why not form one here?)
• Regional Student Case Competition
• Annual Leadership-Ethics Roundtable
• CMA Review and Certification

Benefits of Local Membership
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• Rebalance the accountancy profession by building
  quality financial practices, ethical and
  responsible corporate governance, and operational
  control from inside an organization.
• Paul Sharman, President and CEO, IMA

Todays Challenge
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• IMA is rebalancing the accountancy profession
• Developing a significant group of professionals
  inside organizations who are properly qualified
  to drive ethical and responsible corporate
  governance, and decision support, planning, and
  control over value-creating operations
• Elevate Public Awareness of Advanced-Level CMA
  and CFM Credentials within Key Target Markets
• CPA is an entry-level designation (according to
  the website of the AICPA)
• As many as 80 of those who enter public
  accounting eventually leave to work in industry
• Attract, Certify, Engage, and Retain Members
• Professional Development
• Professional Research
• Students/Academics

Ethical Corporate Governance
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• IMAs Certified Management Accountant (CMA)
  certification best supports inside management
  accountants and finance professionals who drive
  business performance
• Inside professionals represent more than 90 of
  finance function professionals today
• Recently completed comprehensive benchmarking
  analysis of CMA program
• Results confirm the program is world class,
  incorporating advanced management concepts with
  cutting-edge industry practices and superior
  ethical standards
• No other finance or accounting credential lends
  itself more directly to todays complex and
  changing business environment
• CMA as the appropriate worldwide standard for
  accountants working inside businesses

Certified Management Accountant
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• The CMA has always been the appropriate,
  worldwide standard for accountants working inside
  businesses, who represent over 00 percent of all
  accountants today. This has now been confirmed
  for IMA by an independent review.
• IMA Press Release March 1, 2005
• (Based on an independent study conducted by
  Credentialing Services Group of McLean, Virginia)
• accounting is truly the language of business
  and that of all the accounting certifications
  available, only the CMA touches every aspect of
  business and decision making. The CMA is a
  broad-based, international credential that is
  uniform across all parts of the globe.
• IMA Press Release March 1, 2005
• (Based on independent focus group study
  conducted by Environics Research)

Role of Management Accounting
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• Management Accounting today exhibits
  Entrepreneurial Leadership in aggressively
  leading the way to advance the management
  accounting and finance profession, and ultimately
  achieve our goal of building quality financial
  and governance practices inside organizations.
• IMA Press Release March 1, 2005
• Management Accounting demands competent
  professionals who embrace superior ethical
  standards.
• The Institute of Management Accounting is
  committed to restore confidence in the
  marketplace, thereby improve the quality of all
  communities.

SUMMARY