Originally published in SCACPA's CPA Report magazine
Business is in flux amid unprecedented economic, technological and social change. Across the world, organizations are racing to keep up with the place of business, global competition and the increasing risks of day-to-day operations. As organizations focus on how they process and interpret these global forces, the role and responsibilities of the finance function are evolving as well. It’s no surprise that now, more than ever, organizations rely on management accountants to apply non-financial, qualitative information along with financial analysis to help make decisions vital to achieving sustainable growth.
CEOs want help “connecting the dots” to communicate a clear picture of how the organization is running and where the opportunities are. Increasingly, CPAs in business, industry and government have taken on these responsibilities and become key players in shaping their
organizations’ futures and continuing success.
WHAT IS MANAGEMENT ACCOUNTING?
Management accounting is a discipline at the intersection of finance and strategy. It combines quantitative and qualitative data to guide more informed decision making and drive long-term business success. It brings together financial accounting—reporting financial performance, understanding the framework of financial laws, standards and regulations and providing a compliance perspective—and strategy—managing business opportunities, providing a framework of solutions and best practices and guiding decisions.
This means management accountants are equipped to shape both short- and long-term strategy, provide key insight throughout the decision-making process and maintain oversight and control of organizational capital and resource allocations.
THE CPA AS MANAGEMENT ACCOUNTANT
Organizations have always leaned on CPAs to provide necessary financial information to meet stakeholder needs. CPAs performing management accounting functions build upon their foundation of objectivity and financial expertise to maintain a broad skill set touching on areas such as R&D, production, marketing, human resources and logistics. In many instances, an industry-specific knowledge of regulations, markets and common tactics are added to the
mix. This broadened knowledge base, plus the ability to present and communicate information to stakeholders—who often are not finance experts—uniquely position CPAs as management accountants.