Occasionally, young accountants need reminding that a career working for a firm isn't the only road you can travel: there's a lot of potential working in corporate management. AccountingWEB recently got on the phone with Jeffrey Thomson, president and CEO of the Institute of Management Accountants, about that path, and the association's efforts to narrow the "talent gap" in the field.
You prepare accounting students and new accountants for positions in corporate management rather than in accounting firms. How do the education and training differ?
For a job in a company doing accounting and finance work, the difference versus working for a CPA firm is basically the difference between financial and managerial accounting. Financial accounting consists of audit, compliance and financial reporting—essentially a look-back at what we call value preservation. You look back, record what's occurred and analyze that.
Managerial is a complementary part of accounting—value creation, forward-looking, analytics and judgment, financial planning analysis, merger and acquisition activity, data and financial analysis, forecasts, and risk management.
What does IMA do to facilitate this type of position?
That's our reason for being. We are focused on managerial accounting, not exclusively but primarily. We facilitate entry into this, and interest and growth in our CMA program through education programs, webinars, research studies, online networks and communities, and networking.
We have a global network of 200 professional chapters and 100 student chapters to help create local interest and engagement in the profession. And there's an online private social network for folks to engage more digitally.
Is the certification offered by you or an outside accrediting agency?
IMA offers the program itself through an independent affiliate. It's part of IMA but has its own board that governs the quality and robustness of the exam.
What are the key differences between the two work settings?
I worked in a corporate setting at AT&T for many years. I have a much more personal familiarity with the corporate aspect. I would say that at the end of the day whether you are at a CPA firm or inside a corporate finance job, there are probably more similarities in the business aspect. You have to deliver value to someone. In a finance position, it's just assumed you will close the books and produce financial statements, but more is being expected of you. Even in CPA firms, you are expected to be more advisor and trusted business partner and that is increased in the corporate environment. The CFO role has evolved to this broader skillset. It's not just processing transactions and closing books but being the trusted advisor and leader at the table.
For an experienced accountant seeking to make this transition, what's your best advice?
Be part of our professional association. We've been at it for 95 years and we are global. I think once you get into more of a corporate setting, sometimes you have to take charge of learning the business and flow of value. You can't do everything by the seat of your pants so becoming certified in certain technical competencies is really important and building leadership skills.
IMA's certification has been around for 42 years and we're proud of it. We also address more of the leadership side and we've developed a leadership academy to help deliver training to young professionals and senior advanced professionals who manage staff. That's what management accounting is all about.
How do you recruit and explain the advantages of a management accounting career? Does IMA recruit on behalf of clients?
We don't get directly into recruiting. We do have services such as a job bank and we operate in 120 countries. We do partner with companies' human resources (HR) divisions and associations that focus on training and development in HR. In addressing the talent gap that exists in management accounting, HR has a role in that as well as the CFO.
Why is there a talent gap?
It's what we call the entry-level economy. There's a gap in the demand vs. supply. By demand, I mean that CFOs are being asked to do more with less and not only to do their own fiduciary responsibilities and safeguarding of assets—which has always been the CFO's responsibility—but also to create value and plan and budget. So you have a growing expectation that on one hand is exhilarating but on the other hand scary.
On the supply side, when you look at the U.S. accounting education, the preparation is skewed to financial accounting—to prepare that student for a job with an audit or CPA firm not realizing that the statistics very clearly, especially in the United States, show that a vast majority of students now enter that first job at an audit firm and within three to five years find their way inside a company. Either they found that auditing isn't for them or they won't be on the partner track.
That creates the gap. They've been educated in financial accounting with very little in management accounting yet that type of work is value-added that CFOs are being asked to step up to.
So what's the solution?
IMA created an initiative called the Competency Crisis, a microsite. You wouldn't know that it's IMA-hosted. That's de-emphasized by branding purposely. IMA is working with other key bodies to develop an undergraduate accounting curriculum that reflects what people ultimately will be doing on the job. That will create a dialogue to address this very, very significant problem in the profession.