Business is in flux amid unprecedented economic, technological and social change. Across the world, organizations are racing to keep up with the pace of business, global competition and the increasing risks of day-to-day operations.
As organizations focus on how they process and interpret these global forces, the role and responsibilities of the finance function are evolving as well. It’s no surprise that now, more than ever, organizations rely on management accountants to apply nonfinancial, qualitative information along with financial analysis to help make decisions vital to achieving sustainable growth.
CEOs want help "connecting the dots" to communicate a clear picture of how the organization is running and where the opportunities are. Increasingly, CPAs in business, industry and government have taken on these responsibilities and have become key players in shaping their organizations’ futures and continuing success.
What is management accounting?
Management accounting is a discipline at the intersection of finance and strategy. It combines quantitative and qualitative data to guide more informed decision-making and drive long-term business success.
It brings together financial accounting, reporting financial performance, understanding the framework of financial laws, standards and regulations and providing a compliance perspective; and strategy, managing business opportunities, providing a framework of solutions and best practices and guiding decisions.
This means management accountants are equipped to shape both short- and long-term strategy, provide key insight throughout the decision-making process and maintain oversight and control of organizational capital and resource allocations.
The CPA as Management Accountant
Organizations have always leaned on CPAs to provide necessary financial information to meet stakeholder needs. CPAs performing management accounting functions build upon their foundation of objectivity and financial expertise to maintain a broad skill set touching on areas such as R&D, production, marketing, human resources and logistics.
In many instances, an industry-specific knowledge of regulations, markets and common tactics are added to the mix. This broadened knowledge base plus the ability to present and communicate information to stakeholders, who often are not finance experts, uniquely position CPAs as management accountants.
"I think that we all believe that whether you are by background an accountant, a finance major, an economics major, whatever your background is, that you need to be less siloed, and you need to be a broad thinker," said Arnold Hanish, chief accounting officer and vice president of Eli Lily & Co. "So communication skills are critical. Being able to translate complex issues into simplistic terms where non-financial people can understand what you’re saying is critical."
Introducing the CPA, CGMA
Professional recognition of the work CPAs in business, industry and government do on behalf of organizations has taken a significant step forward with the introduction of a new designation: the Chartered Global Management Accountant.
Complementing the U.S. CPA, the CGMA demonstrates that designees have the experience, skills and expertise to provide organizations with the information needed to optimize performance.
The CGMA has been established by the American Institute of Certified Public Accountants and the Chartered Institute of Management Accountants through a joint venture that collectively represents more than 550,000 accounting professionals and students throughout the world. Together, the AICPA and CIMA are working with employers and influencers around the world to increase awareness of what management accountants do to drive successful business performance.
"Leveraging the strength of CPAs and expanding awareness of their role in organizations worldwide, the CGMA will showcase designation-holders’ management accounting expertise and serve as a complement to the knowledge, skill set and commitment to the code of conduct CPAs already have," said Barry Melancon, CPA, CGMA and president and CEO of the AICPA.
An Opportunity for ASCPA Members
The CGMA is available to regular (voting) members of the AICPA who meet the qualifying requirements. Members of the Arkansas Society of CPAs who also are eligible members of the AICPA can experience the many resources designed to build their skills and knowledge for a free introductory period through July 31. Visit CGMA.org for thought leadership papers, access to a global community and a career tool kit to help you promote your CGMA.
"Our CPA, CGMA members are a value-added force," says Barbara Angel, the society’s executive director. "They articulate a clear vision in an otherwise dynamic and complex environment. From inspiring and empowering strategically sound decisions to shepherding their organization’s resources, management accounting professionals set the tone for their employers’ ongoing success."
William L. Cook II of El Dorado is managing member of William P. Cook & Associates PLLC of El Dorado and Fayetteville and president of the Arkansas Society of CPAs. For more information, visit CGMA.org or contact Ron Pitts at the society at (501) 664-8739 or RPitts@ARCPA.org.
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