The foundation of management accounting is built upon technical financial and business competencies where accountants have a deep and holistic understanding of their organisations’ cash flow, revenue, and returns on investment. But the profession is now more dynamic and fluid, with a scope of work that is expanding.
“The evolution of the role has been occurring, but the pandemic expedited not only our role and function but many of the related skills and emerging skills,” said Lori Sexton, CPA, CGMA, associate technical director, Research and Development–Management Accounting at AICPA & CIMA, together as the Association of International Certified Professional Accountants. She added: “Digitalisation certainly aided in the rapid expansion.”
Budgeting, forecasting, and reporting are still core skills of the profession, but management accountants can bring additional value by, for example, sharing insights about how the organisation can digitally transform, manage risks, explore new business opportunities, and initiate and monitor diversity, equity, and inclusion (DEI) initiatives and sustainability matters.
The breadth of this expansion is shown in an AICPA & CIMA research paper, Future of Finance 2.0 Emerging Themes: The Changing Role and Mandate of Finance. Built upon interviews and roundtable discussions with finance leaders, academics, and students from across the globe, the 18-month-long research study explores the newfound dynamism within the finance profession.
The naturally expanded role of management accountants demonstrates the profession’s commitment to flexibility, agility, and relevancy in today’s complex business landscape.
Redefining value
Management accountants advise various functions — including human resources, governance, and marketing — offering data-driven insights for how to redefine value, better serve internal clients, and discover new markets.
“Finance professionals have traditionally been the gatekeepers who safeguard assets and resources, and are mindful of risks,” said Irena Teneva, DBA, associate technical director, Research and Development–Management Accounting at AICPA & CIMA, and co-author of the report. That risk-mitigating role is not fading away, she said.
“Business partnering is the gateway to adding value, which is what the future of the profession is about,” Teneva said. “To be a successful business partner, you need commercial acumen, thinking about what numbers mean for the future and how the business can grow, and also liaising with colleagues and partners to discuss and refine those ideas and make them workable.”
Finding the right balance of these skills and mindsets is key, Teneva added.
The level of reliance on communication and interpersonal skills has also changed. Management accountants are now required to give a fuller picture of their numbers and reports, including through data visualisation.
And, Sexton said, these “multi-level, multi-situational, multi-audience conversations require specific communication skills and abilities all operating at the same time”.
‘A compass for the future’
Management accountants can still be relied upon for data and reports, but now they’re tasked with telling complete and in-depth stories of both financial and nonfinancial data.
“I see this as a compass for the future,” Sexton said. “When you are hiking and every so often check your compass to make sure you’re going in the right direction, you don’t know what exactly you’re going to see, but you know you’re headed towards something.
“[The Future of Finance 2.0] research cannot define, nor should it, a specific destination for the finance professional, but it provides a direction of what you’ll need for the journey ahead,” she said.
The scope of wider changes within the profession are addressed in the Future of Finance 2.0 research programme. Explore the research and prepare for what’s ahead.
Jamie Roessner is a senior content writer at the Association of International Certified Professional Accountants, representing AICPA & CIMA. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.