|
In this Apr 2003 issue of On
Target :
SWOT Analysis of the Management
Accounting Profession
The biggest opportunity for the profession is also its
biggest threat, i.e. the need for more Corporate Governance in
the aftermath of the Enron, WorldCom and Arthur Andersen
debacles. Whilst this has resulted in the demand for more
Corporate Reports that are forward looking (the area of
expertise of management accountants) it has also resulted in the
need for skills far more diverse than those processed by
traditional CPAs and CMAs. This has given a window of
opportunity to other professions, such as Chartered Financial
Analysts (CFAs), Industrial Engineers, Insurance Professionals,
and Lawyers, who are now lobbying for a role that is currently
(or in some cases was formerly) performed by the accounting
profession.
The accounting profession should therefore be more pro-active
and lobby Government appointed Regulatory Bodies to legislate as
mandatory (or at least recommended as best-practice) the
following for good Corporate Governance :
-
Strategic Audits (including Shareholder Value Analysis)
-
Cost Audits
-
Risk Management Analyses
-
Securitisation Cost Analysis
-
Intangible Asset Valuation (based on Expected Future Cash
Flows)
-
Report on Going-Concern
-
Environmental Impact Audits
Major management accounting bodies around the world, such as
the IMA (USA), CIMA (UK), SMA (Canada), and ICMA (Aust) should
lobby for such audits, analyses and reports. If a Regulatory
body in any one of those three countries mandates (or at least
recommends) any of the above reports, then the rest of the world
will follow. Currently only India, Pakistan and Bangladesh have
made Cost Audits mandatory as was discussed in the last issue of
ON TARGET.
In keeping with lobbying to make such reports to be made
mandatory/best-practice, the profession should also revamp its
education program, in order to give its members a wider skills
set in keeping with the broader requirements demanded by such
audits, reports and analyses.
ICMA (Aust) is currently undertaking significant research
studies in all of the above areas, with the objective of
publishing a “Managerial Accounting Corporate Governance
Manual” for use by practitioners. It has key members who have
developed close relationships with major regulatory bodies in
Asia and is in discussion with regards to the use of the Manual
in these countries for Corporate Governance best-practice
purposes.
The second major opportunity is the membership growth
potential in the non-English speaking emerging markets,
especially China and the former Soviet Union.
The threat in this area comes from two directions: First,
generalist bodies such as the CPA and Chartered Accounting
bodies around the world are trying to grow their membership in
these markets (at the expense of more specialist bodies such as
the CMA bodies) by claiming that their qualification covers all
accounting areas fully, including management accounting. The CPA
has become the qualification of choice in most domestic and
international markets, to the detriment of the CMA
qualification. Second, even excluding the CPA threat, the
management accounting bodies are competing with each other in
the potential markets for membership growth, with CIMA (UK), SMA
(Canada) and CGA (Canada) being the major competitors, all
conducting their own exams.
ICMA (Aust) has taken a different approach, by establishing
strong network of universities and professional institutions in
these markets, which work closely with ICMA to provide a
post-graduate professional experience to its potential
specialist members, very different from those other bodies vying
for membership numbers.
Not only is ICMA’s strength in having established a strong
network of universities and professional institutions in these
markets, but also is its unique approach to the market via the
grass-roots educational institutions. In both USA and Australia
the professional bodies that work with universities have had the
best long-term impact on membership. For example, the AICPA’s
domination of university access in the USA has had an
overwhelming impact on its membership numbers. Thus the ICMA (Aust)
approach is not only a proven approach, but also it’s approach
is differentiated from all other management accounting
professional bodies operating in the Asian growth markets of
interest to the profession. The ICMA has many university
relationships and strong university based Recognised Provider
Institutions, especially in emerging markets in Asia such as
China). It has also developed undergraduate and masters level
education programs in many Australian and overseas universities,
especially within MBAs.
The strengths of the Institute of Certified Management
Accountants (Australia) is not only its education program, but
the resultant highly qualified membership (most Australian CMAs
have masters degrees). Another strength is its range of
Membership Services such as :
-
Research Reports to Members
-
Information Center (Web-library)
-
Corporate Alliances (2020 Program)
-
Job Listings
-
Member Interest Groups
-
Risk Management and Cost auditing Services
In addition it has currently world-class publications such as :
-
Strategic Finance (from IMA-USA)
-
Journal of Applied Management Accounting Research (Research
Journal)
-
On Target (Newsletter)
-
Applied Research Monograph series
-
ICMA Research Studies
-
Cost Management Advisor Handbook
The Weaknesses of the ICMA (Australia) stem from its limited
membership (2,500 members, with only 650 CMAs). The numbers are
low mainly due to its strong insistence of a masters-level
education. This has resulted from not being able to negotiate
some much-needed Membership Services such as :
The ICMA (Aust) also lacks a Professional Journal of its own
(currently beholden to IMA for its Strategic Finance journal)
and does not currently publish any Statements on Management
Accounting (SMAs) although its Cost Management Advisor handbook
provides best-practice guidelines. The Executive recognises
these weaknesses and its slowly addressing them.
More
|
