by Charles Tilley, Chief Executive, CIMA | March 27, 2014 | 2
The Chartered Institute of Management Accountants (CIMA) has launched a consultation on a set of Global Management Accounting Principles© and we would very much like your help. Unlike financial reporting, which has standards to guide its practice, there has been little authoritative guidance to help CFOs assess and improve the quality of the management accounting practices and processes used in their organizations.
As the demand for management accounting grows, the time is right to fill this gap. I also believe that the new Principles provide an ideal opportunity for professional accountants in business to demonstrate quite how crucial they are to the long-term sustainability of their organization.
Our overall objective is to enable CFOs to have management accounting systems in place that will drive better business through improved performance. We want to show business leaders what they could—and should—be getting from their management accounting function. To do this effectively, we are asking for feedback on our draft Principles from both business experts and accountants.
The development of the Principles, designed alongside our joint-venture partner, the American Institute of CPAs, is intended to be a collaborative effort. By drawing in a wide-range of perspectives, we aim to attract buy-in from the business community as a whole and ensure that the Principles really reflect both current practice as well as the direction of travel.
With this in mind, we are aiming for the Principles to:
- provide a forward-looking focus and ability to link different functions in a way that many organizations still lack;
- connect the dots, ensuring a direct line of sight between the organization’s objectives and the practices and processes of management accounting
- outline the fundamental values and qualities that represent best practice in management accounting; and
- create a common framework and help those responsible for delivering success to make the most appropriate use of the myriad sources of information at their disposal.
In the draft Principles consultation document, there are three headline Principles and 12 areas of practice built on CIMA’s proposed definition of management accounting. Among the 10 questions we are asking finance professionals to consider, we would like to know:
- Whether you agree with the suggested Principles and if other principles should be included;
- Whether the 12 practice areas cover the main elements of the finance function;
- What the current role of management accounting is in your organization; and
- How you currently assess the quality of your management accounting capability.
I would be very interested to hear your views. Our collective brain-power is vital to producing Principles that are both practical and effective.
More details about the Global Management Accounting Principles can be found at www.cimaglobal.com/principles.
The deadline to respond to the Principles is midday BST on May 10, 2014.
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