The Chartered Institute of Management Accountants (CIMA) and the American Institute of CPAs (AICPA) have drawn up a draft set of principles designed to help CFOs and boards benchmark and improve their management accounting practices and ultimately help their businesses make better, faster decisions.
After research and input from an advisory panel consisting of representatives from companies such as HSBC, Tata and Unilever among others, and organisations such as the International Federation of Accountants, the principles were released Monday and are now open for consultation.
“Amid growing complexity and change, leaders increasingly are turning to management accountants to forecast more of what’s next – to apply financial rigour to strategy, find new trends in operations and provide insight from data – as they work to position their organisations for long-term, sustainable success,” the organisations said in a news release.
The proposed framework includes guidance on how to identify financial and non-financial information suitable for analysis; how to model scenarios to prioritise opportunities; as well as how to communicate with clarity to guide better decisions. It stresses the importance of integrated thinking and evidence-based decision-making.
CIMA and the AICPA, which partnered in the creation of the Chartered Global Management Accountant (CGMA) designation, are inviting finance professionals to review the proposal, provide feedback on the role management accounting plays in their organisation, and suggest further elements for incorporation. The organisations are particularly keen to hear how the framework can best meet the fast-changing needs of today’s businesses.
The feedback will inform a final set of principles, to be published in late 2014. The resulting framework will include a diagnostic tool to help businesses and institutions ensure that they are making the most efficient use of key information.
To read the proposed framework and respond to the consultation, go to www.cimaglobal.com/principles. The deadline for responses is May 10th.
—Samantha White (swhite@aicpa.org) is a CGMA Magazine senior editor.