Management Accounting, Risk Management, and Internal Control—It’s What We Do!
In today’s complex world, especially in the aftermath of the global financial crisis, competition for business in every industry is fiercer than ever. Nearly all organizations, whether large or small, public, private, or nonprofit, are now operating in an intensely challenging and dynamic environment. How can they increase the odds of their business success? Part of the answer lies in effective risk management and internal control (RM/IC).
To help you improve your organization’s success through effective RM/IC, we developed a series of presentations and articles for the Institute of Management Accountants (IMA).
The first presentation we gave in this series was an overview, Leveraging Effective Risk Management and Internal Control for your Organization, delivered at IMA’s 2013 Annual Conference and Expo in Las Vegas. The presentation outlined some of the pitfalls many organizations face with their RM/IC systems, including suggestions on how to overcome these pitfalls. We then turned the presentation into an article of the same name, published in the April 2014 edition of IMA’s magazine, Strategic Finance.
Following positive reviews and requests for an encore, we delivered our second presentation, Upgrading Risk Management and Internal Control in Your Organization, at IMA’s 2014 Annual Conference and Expo in Minneapolis. While we used our 2013 presentation as a starting point, we focused more on specifics, highlighting current considerations on how to assess your organization’s risk management and internal control maturity stage. In addition, we shared a case study on how RM/IC can be leveraged to more effectively manage operations, using co-manufacturing as an example. Similar to the first presentation, we also turned this one into an article, “Stacked in Your Favor,” published in the April 2015 edition of Strategic Finance.
We are now preparing our session for IMA’s 2015 Annual Conference and Expo, June 20-24 in Los Angeles, the third in what has become a series of RM/IC presentations. This time, we will demonstrate that risk management is good management accounting, not compliance. Risk management and related controls form natural parts of the management accountants’ core competences, enabling management accountants to adequately fulfil their roles.
The core requirements for IMA’s Certified Management Accountant (CMA) examination (as described in the current CMA Handbook from IMA) will form the backbone for our session. These requirements include familiar management accounting activities, such as decision analysis, investment decisions, corporate finance, cost management, planning, budgeting and forecasting, performance management, external financial reporting, and financial statement analysis. We will invest the majority of our session presenting several case studies and facilitating related group discussions based on our experience in the field to demonstrate that the integration of risk management and internal control into our core management accounting activities leads to better overall decision making and execution. These case studies will cover such topics as sustainability, innovative new product launches, internal vs. external ingredient sourcing, and capital repair vs. replace decisions.
As we develop our presentation, your suggestions are welcome. Of course we also would love to see you in our session at the IMA Conference in June. Hope to see you there!