Why the Future of Management Accounting Looks Bright
Management accountants provide myriad services within a business, from financial reporting and control to planning, decision-making, and creating performance management systems. But there is a notable skills gap that the Institute of Management Accountants (IMA) is looking to address.
The IMA is set up to propel these accountants and also help them overcome obstacles, including the aforementioned skills gap, which was addressed in a recent competency framework proposal. AccountingWEB spoke with IMA President and CEO Jeff Thomson about these issues and the future of management accounting.
AW: Almost two years ago, AccountingWEB talked to IMA’s Ben Mulling (chair-elect at the time) on the five questions that applicants for a management accounting position could expect to be asked. That article is consistently among our most-read, which indicates that there has been a surge in interest or applicants for this aspect of the accounting profession. Is that accurate?
Thomson: Yes, that is accurate. Management accounting continues to grow as a respected and influential profession, with many careers and career paths relating to both value stewardship (protecting value through strong internal controls and risk management, for example) and value creation (financial planning and analysis, merger and acquisition assessment, etc., as examples).
According to the US Bureau of Labor Statistics, the profession continues to grow in double digits. With a decline in the number of CPA candidates, students and young professionals are finding that partnering and advisory skills are valued and critically important, better enabling organizations to achieve sustainable growth.
AW: In April, Robert Half and the IMA released a study indicating that finance leaders face significant shortages of accounting and finance professionals who possess the technical and nontechnical skills required for data analytics initiatives. Does that mean that management accountants generally are lacking that skill set? If so, how can that be corrected?
Thomson: It means that the needs of business in a complex and competitive environment (the demand side) are exceeding the ability of organizations to capture, assess, and provide actionable strategies given the volumes and types of traditional and nontraditional (social media/digital metrics) commonly referred to as “big data.”
As trusted business advisors, management accountants are in a unique position to differentiate themselves by developing enhanced skill sets not only in traditional descriptive statistics (an analysis of historical events), but also predictive analytics (forecasting future events) and prescriptive analytics (actions and interventions, based on historical and future trends).
AW: What makes data analytics such a desirable skill at this point?
Thomson: Because businesses collect or have access to a multitude of data about their customers, products, and markets in a business environment characterized by complexity, commoditization, consolidation, and competition – what I call “the 4 Cs.” Understanding this data and extracting insights could lead to competitive advantages and sustainable growth.
The advent of social media and digital marketing metrics, including Twitter, Facebook, blogging, and more, results in both risk and opportunity for the organization to personalize its marketing approach in the prospecting process. So, while management accountants do not need to become PhDs in statistics or econometrics, they need to understand how to extract, assess, report, and offer actionable insights on all of the data available to the enterprise.
AW: Besides that skill set, what's the most valuable talent or ability that management accountants can have in the current business environment?
Thomson: Besides data analytics, business partnering skills (also known as trusted business advisory skills) are very important. This includes resiliency and adaptability given all of the change and disruption inherent in our business environment. The ability to assess a situation in real time, often a situation not expected, and to offer advice is critical. The disruptive situation could be driven by competition, technology, the global economy, or even the customer themselves.
AW: In an interview two years ago, you told AccountingWEB that finance professionals are increasingly expected to be advisors and trusted business partners, and even more so in the corporate environment. How has that changed or grown?
Thomson: This need has no doubt grown due to the complexity and expectations for business success today. Today’s management accountant is expected to have both technical accounting depth and business operations breadth to advise and guide the organization through turbulent times.
AW: What’s the toughest task facing new management accountants and how can they succeed at it?
Thomson: Management accountants or the CFO team in businesses of any size, any structure, anywhere, are increasingly being asked to do more with less. There is a great opportunity and potential to enrich careers, organizations, and the public interest with a better understanding and application of the principles and competencies inherent in the management accounting profession. This can be partially mitigated by rich, on-the-job experiences but also through credentialing, education, and peer-to-peer networking. Professionals and organizations in the day-to-day crunch to produce results often become too inward when a balance with external learning and growth could be the answer.
AW: How is the ongoing educational issue being addressed? What’s the status on working to develop a targeted curriculum to address the skills gap?
Thomson: IMA continues to work aggressively on a joint committee with the American Accounting Association (AAA) to identify changes to current accounting curricula to make it more balanced, integrative, and reflective of what accountants actually do in the area of “enterprise performance management.” The IMA-AAA task force has put forward a specific competency-based integrated framework, but it will take a call to action from the entire accounting profession (academia, corporations, and professional associations/other partners) to affect long-term transformation.
Incrementally, IMA has seen some marginal increase in its number of endorsed schools (i.e., those whose curricula largely aligns with the Certified Management Accountant body of knowledge). The IMA recently also put forth for public comment its Management Accounting Competency Framework for professionals in business environments to assess and remediate their competency gaps.
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Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.