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Changing role of Management Accountants

A couple of months back, Management Accountant Blog posted a guest post by CMA V R Kedia on "Emerging Role of Management Accountants in New Economy". The role as described by CMA Kedia expected the management accounting practitioner should have attributes of a learning professional, a change agent and be hands on latest technology.

Management Accounting techniques has undergone a lot of development from preparing Cost-Volume-Profit Analysis to latest techniques like EVA, Activity Based Management, Target Costing, Kaisen and many more. The expectation from management accountant has been changing consistently with the advancement of technology and new challenges faced to analyse business for its competitiveness.

I wondered Management Accounting is a specialized field ..... is it necessary to have an accounting background ?

According to New Accountant USA,

"According to a study commissioned by the American Institute of Certified Public Accountants (AICPA), the average cost of the finance function has dropped from 2.2 percent of revenues in 1988 to 1.4 percent of revenues in 1996. The study further projects that costs may be reduced by as much as 50 percent in the next few years and that the number of people employed in finance should drop by one-third. Those accountants trimmed from finance will likely be individuals who are unwilling or unable to switch their focus from historical-based data-gathering activities to future-oriented, decision-focused activities."

CIMA is one of the leading Management Accounting institutes in the world. The American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CIMA) have agreed to collaboratively develop products and services that are in the common interest of their collective membership who work in business and industry. With its focus on management accounting and the latest developments in global business, CIMA is a natural partner for the AICPA's Financial Management Center, which serves CPAs working in business and industry.

The first effort of the initiative is the "Developments in Management Accounting" series, which includes multiple titles concentrating on current management accounting issues and principles and strategies for implementation.

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Further AICPA has partnered with CMA Canada - for the benefit of their members in business - to undergo programs focusing on selected financial management issues, MAGs provide guidance on current and evolving strategic management practices and concepts.

Legally, the finance and audit profession is regulated and protected by various legislation. The accountants who are interested in practice will go for accounting profession. The people who would like to work with the business and take up new challenges will pursue management accountancy as it opens up wide array of activities like analyzing the competitiveness of business to designing a smart management information system.

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In future, courses like "Finance for non finance professionals" should be enough as a foundation courses for people pursing Management Accountancy. The course in management accountancy should cover in details about "Strategy"and more about management.


Santosh Puthran

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