This January, the American Institute of CPAs (AICPA) and Chartered Institute of Management Accountants (CIMA) announced the recipients of the American Accounting Association's (AAA) Greatest Potential Impact on Management Accounting Practice Award for 2012.
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The award was presented to Ramji Balakrishnan, Eva Labro, and Konduru Sivaramakrishnan for their paper, Product Costs as Decision Aids: An Analysis of Alternative Approaches, which was published in Accounting Horizons, an AAA publication.
The award was presented at the AAA 2013 Management Accounting Section Conference in New Orleans, Louisiana, January 10-12, 2013, by Anne Farrell, PricewaterhouseCoopers-endowed assistant professor chair in accountancy, Farmer School of Business, Miami University, Oxford, Ohio; chair of the selection committee; and AAA Management Accounting Section (MAS) liaison to the AICPA Business & Industry Executive Committee.
According to the AICPA, the award recognizes academic papers that are considered the most likely to have a significant impact on management accounting practice. It is sponsored by the AICPA and CIMA, who are "working to elevate management accounting around the world and together created the Chartered Global Management Accountant (CGMA) designation to distinguish professionals who excel in the field."
Eligible papers must have been published within the previous five years and submitted by the authors or nominated by peers. The sponsorship value is $2,000.
Balakrishnan he and his colleagues are especially appreciative of both institutes' commitment to supporting academic research in the area of management accounting.
"A lot of academic research in accounting today is in the realm of financial reporting, with a focus on publically listed firms for which extensive data sets are available for large-scale archival research," Balakrishnan said. "We are grateful for AICPA and CIMA's support of management accounting research because it provides the needed impetus to direct some of the research focus on measurement issues and decision tools that are key to enhancing operational efficiencies of any firm, whether public or private and of all sizes."
The award was created in 2009 to support the next generation of management accounting researchers and to recognize the importance of research to practice and the profession. Management accounting is a core discipline for the institute's members in business, industry, and government, according to the AICPA.
"The fresh insights discussed in these award-winning papers demonstrate the importance of supporting continued research in the practice of management accounting," said Jim Morrison, CPA, CGMA, CFO of Teknor Apex Company, and chair of the AICPA Business & Industry Executive Committee. "Management accountants will be able to add significant value to their companies by better understanding the different types of product costing systems, as discussed in (this) research."
The research conducted by Balakrishnan, Labro, and Sivaramakrishnan revolves around ways to develop a common platform to characterize several popular approaches for computing product costs. It compares four kinds of product costing systems: traditional volume-based systems, activity-based costing systems, time-driven activity-based costing systems, and resource consumption accounting.
Balakrishnan said it is critical that management accountants stay abreast of developments in their field, because of the significant impact those developments can have on their individual organizations.
"Practicing accountants, particularly at small and medium-sized organizations, have many things on their plate and get caught up in everyday minutia. It is easy for them to lose sight of current developments in management accounting – developments that could potentially have a large impact on their organizations," Balakrishnan said. "It is therefore important to conduct research that advances our knowledge and that communicates current thought to practitioners in an accessible fashion."
Balakrishnan said the team focused on the research with a second goal in mind as well: providing an easily understandable and accessible analysis of recent advances in product costing literature with the hope that such insight will help practitioners choose an approach that is best suited for their organization.
"Each of these advances in product costing literature has its share of proponents and detractors. We present a way for practicing accountants to grasp the similarities and differences among alternate proposals, and compare them in terms of the cost of system implementation and maintenance, and their ability to provide decision-relevant data as well as the needed incentives to manage the demand for resources."