Lawson, R. (2019, March 1).
New competencies for management accountantsLinks to an external site.
. Strategic Finance.
Focus on one of the major subjects of this article that is of interest to you. These subjects include (but are not limited to):
The changing role of finance and accounting professionals
Impact of technology and data analytics
The growing importance of ethics in the digital age
The IMA management accounting competency framework
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Do the following in your initial response:
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Results: What was the result or conclusion reached in the article of the strategies recommended to address that subject in the article, now and in the future?
09-0109News&Views.qxp_Layout 1 9/9/19 1:55 PM Page 18
NEWS & VIEWS I Career Paths
New Competencies
for Management
Accountants
M
By Raef Lawson
anagement accounting, like many fields, is being
disrupted by new technologies, including big data,
predictive analytics, artificial intelligence,
blockchain, machine learning, and robotics process automation. Established accounting and finance professionals wondering whether they have the critical knowledge and abilities
to advance their careers in this new practice environment,
new professionals seeking information about the core technical and soft skills they need to tackle their current roles,
and accounting students contemplating a career in finance
and accounting can all benefit from using the Institute of
Management Accountants’s (IMA) newly updated
Management Accounting Competency Framework to help
identify today’s essential skills.
The Changing Role of Finance and Accounting Professionals
Accounting and finance teams have traditionally concentrated on value stewardship, financial reporting, and compliance. Research conducted by the IMA and others, however,
has documented an ongoing transformation of the finance
function, which is becoming more strategically oriented and
shifting to higher value–added, strategic activities and away
from lower value–added, day-to-day operational ones. The
evolving responsibilities of finance now include creating
18
value, providing business insight, and serving as strategically
oriented business partners. These are critical competencies
and focus areas globally, as organizations look to gain market
advantage in an increasingly competitive and commoditized
business environment.
In order to succeed, management accountants will need to
employ more sophisticated analytics. In the past, management
accountants were asked to provide descriptive and diagnostic
statistics. As shown in Exhibit 1, the profession must move to
the higher end of the analytics continuum—to predictive, prescriptive, and adaptive analytics.
Impact of Technology and Analytics
Accountants and finance professionals have always been at
the heart of data-related work. Now, as the data revolution
causes huge shifts in the landscape, the very nature of finance
is being significantly affected. While technological change will
provide challenges for management accountants’ careers, it
also presents opportunities. Finance professionals will increasingly become free from rote, repetitive tasks such as billing,
management reporting, and general accounting. They will
spend less time collecting and organizing financial data and
more time evaluating, analyzing, and interpreting it. They will
be able to spend more time looking at trends, developing
insights, and connecting with leadership.
The Growing Importance of Ethics in the Digital Age
As organizations deploy new technologies, ethical business practices will need to grow and evolve in step. Issues
such as how much privacy employees and customers are
entitled to, the extent to which technology can be used to
gain insights regarding competitors, and the extent to which
employers should monitor their employees’ electronic
activities are becoming increasingly critical. In a time when
organizations’ value increasingly consists of intangible
assets such as brand value, the failure to prescribe and follow ethical practices has increasing potential to affect organizations negatively.
In keeping with finance’s traditional role of putting policies and procedures in place to safeguard organizational
resources and of overseeing compliance efforts, the profession is often looked to as an ethical leader. Technological
advances will only increase the importance of this role. As
management accountants move away from compiling and
reporting information and assume more strategic roles, they
will increasingly encounter complex business situations
requiring an understanding of how to act in an ethical manner. Management accountants will need to conduct themselves in a way that reaffirms the profession’s ethical
guidelines and values.
SEPTEMBER 2019 / THE CPA JOURNAL
09-0109News&Views.qxp_Layout 1 9/9/19 1:55 PM Page 19
Strategy, Planning, and Performance
This domain includes the competencies required to envision the future, lead
the strategic planning process, guide
decisions, manage risk, and monitor performance. It includes competencies that
were in the prior framework’s Planning
and Reporting and Decision-making
domains. Pulling all the competencies
related to strategic planning and performance together into one domain reflects
the evolution of the role of management
accountants and the increasing importance of strategy formulation, validation,
and implementation.
In keeping with the increased emphasis
on strategic management, the Cost
Accounting and Cost Management competency in the prior framework was split
into two parts: Strategic Cost Management
and Cost Accounting, with the former
included in the new Strategy, Planning, &
Performance domain in recognition of the
essential role that cost management plays
in strategic decision making.
Reporting and Control
This domain includes the competenSEPTEMBER 2019 / THE CPA JOURNAL
domain, the rapid advance of technology
and the deployment of advanced analytics required its complete reexamination.
This domain now includes the competencies required to manage technology and analyze data to enhance
organizational success. It takes a holistic view of data and includes competencies related to data acquisition, data
analysis, and the presentation of that
analysis, all while ensuring the integrity
and security of the data.
cies required to measure and report an
organization’s performance in compliance with relevant standards and regulations. As such, it relates to
management accountants’ traditional
role of providing oversight and hindsight. Even as the role of management
accountants evolves, however, these
responsibilities remain important and
are themselves evolving.
While incorporating many of the
competencies in the prior Framework’s
Exhibit 1
Evolution of Data Analytics for Management Accountants
Evolution of Data Analytics
for Management Accountants
Adaptive Analytics
Prescriptive Analytics
Predictive Analytics
VALUE
The Management Accounting
Competency Framework
With the changing state of the business
environment, the IMA recognized the
need for management accountants to
acquire new skills and proficiencies in
order to achieve career success. Its
recently updated Management
Accounting Competency Framework
(http://bit.ly/2KX2u0S) presents the skills
management accountants will need to
protect their careers. The framework is
represented visually in Exhibit 2.
The updated framework organizes the
essential competencies for management
accountants into six knowledge domains.
Exhibits 3 and 4 contain descriptions of
the domains and their competencies.
These domains differ from those in the
prior framework in important ways, as
discussed below.
How can machine
learning help?
What should
we do?
What is likely
to happen?
Diagnostic Analytics
Why did it
happen?
Descriptive Analytics
What
happened?
Hindsight
Insight
Foresight
LINE OF SIGHT
Planning and Reporting domain, this
new domain also includes new ones,
including Tax Compliance and
Planning and Integrated Reporting. This
reflects the changing external reporting
environment and stakeholders’ demand
for enhanced performance disclosures
across multiple dimensions.
Technology and Analytics
The greatest change to the framework
is the addition of the Technology and
Analytics domain. While the prior
framework included a Technology
Management accountants will need
to learn new competencies in this area
in order to succeed. They must be able
to successfully extract and analyze the
immense amount of information at
their disposal while acquainting themselves with the latest methods of data
governance, query, analytics, and visualization. Combining knowledge of
technology with strategic and leadership skills will enable finance and
accounting professionals to decipher
and communicate the story the data
is telling.
19
09-0109News&Views.qxp_Layout 1 9/9/19 1:56 PM Page 20
NEWS & VIEWS I Career Paths
Exhibit 2
IMA Management Accounting Competency Framework
Exhibit 3
IMA Management Accounting Competency Framework
Knowledge Domains
Strategy, planning, and performance. Strategic management includes activities such as competitive analysis, forecasting and budgeting, operational
decision analysis, enterprise risk management, and innovation.
Reporting and control. With robotic process automation (RPA) increasingly
being used to automate accounting processes, management accountants
will need to be able to evaluate the efficiency and effectiveness of accounting
processes and make recommendations to optimize them. They will also need
to implement sophisticated costing techniques and procedures to ensure
data security, protect assets, and meet legal and reporting requirements.
Technology and analytics. As big data matures, management accountants
will need knowledge of data extraction tools for mining structured and unstructured data. They will need to be able to employ data analysis tools that
collate, manage, and analyze this data, as well as create data visualization
and storytelling.
Business acumen and operations. Business acumen includes industryspecific and operational knowledge, as well as quality management, continuous improvement, and project management skills.
Leadership. Soft (personal) skills in areas such as motivating and collaborating
with others, communications, change management, talent management,
relationship management, negotiation, and conflict management will remain
critical for management accountants.
Professional ethics and values. The evolution of technology and analytics
raises new ethical dilemmas that must be addressed by accounting and
finance professionals. As management accountants get more involved in the
strategic planning process, there will be a greater need for professional skepticism around the inputs and assumptions in that process.
Business Acumen and Operations
Included in the prior framework as
Operations, this domain has been expanded to encompass the competencies
required to contribute as a crossfunctional
business partner, assisting in the transformation of company-wide operations.
While an understanding of an organization’s operations remains a critical competency for management accountants,
the scope of this domain has expanded.
In keeping with the advancing technological environment, management
accountants will need to understand the
impact technology will have on business
risk, processes, and models. This
includes how current and expected technologies will affect the way business is
conducted and measured. Management
accountants need to be able to evaluate
outcomes within the proper context by
20
“asking” large amounts of data the right
questions to form business decisions
and make judgments, and to obtain better insight into the overall operations of
a business.
Leadership
Leadership encompasses the competencies required to collaborate with
others and inspire teams to achieve
organizational goals. Its standing as
the only unchanged domain reflects
the importance of this competency
for management accountants. The
ability to serve as an effective leader,
both within the finance function and
across the organization, will be an
increasingly important competency as
management accountants strive to
become business partners within the
larger organization.
Professional Ethics and Values
A major change to the framework is
the addition of the Professional Ethics and
Values domain. While professional ethics
was included in the prior framework as
part of the Decision-making domain, the
addition of this domain to the new framework recognizes the critical importance
of professional ethics and values to the
practice of management accounting. The
presentation of this domain in Exhibit 2
underscores the importance of competency in this area. Professional ethics and
values need to underlie and permeate all
that finance and accounting professionals
do, and their importance will only
increase with time.
What does this domain consist of?
First, it includes the ability to personally exhibit professional ethical behavior. This is defined as the ability to
SEPTEMBER 2019 / THE CPA JOURNAL
09-0109News&Views.qxp_Layout 1 9/9/19 1:56 PM Page 21
comply with a set of guiding principles that govern a person’s behavior
in the workplace. It also includes the
ability to recognize ethical conflicts
and lapses in the workplace and take
appropriate action. Finally, it includes
the ability to execute an organization’s
strategy with integrity while complying with the laws, regulations, and
standards in the regions in which an
organization operates.
In order to recognize and resolve
unethical behavior, management
accountants need to be able to apply
professional skepticism in the workplace. While the concept of professional
skepticism is well established in public
accounting, it is a fundamental characteristic that is applied in the work of all
professional accountants, including
those who work in business. Given
their professional status and influence
in the financial reporting supply chain,
all professional accountants should
apply professional skepticism regardless of where they are employed.
The importance of management
accountants exhibiting professional skepticism has been noted by several
International Federation of Accountants
(IFAC) committees and boards. IFAC’s
Professional Accountants in Business
(PAIB) committee notes that it “strongly
believes professional skepticism is a fundamental ethical obligation applied in the
work of all professional accountants,
including professional accountants in business, and is a key distinguishing element
of the profession.” Similarly, IFAC’s
International Accounting Education
Standards Board (IAESB) notes that
“professional skepticism is an integral
part of a professional accountant’s skill
set, and adopting and applying a skeptical mindset is ultimately a personal and
professional responsibility to be
embraced by every professional accountant. As a result, IAESB members agreed
that the concept of professional skeptiSEPTEMBER 2019 / THE CPA JOURNAL
cism in the [International
Education Standards] should
continue to be interpreted to
apply to the broader context
of the role of professional
accountants and not just
auditors” (“Importance of
Professional Skepticism to
the Competence of All
Professional Accountants,”
IAESB issue paper, October
2018). Finally, IFAC’s Small
and Medium Practices (SMP)
committee “supports the concept that professional skepticism should be applicable to
all professional accountants.”
Exhibit 4
Knowledge Domains and Competencies
Domain
Competencies
Strategy,
planning, and
performance
Strategic and tactical planning
Decision analysis
Strategic cost management
Capital investment decisions
Enterprise risk management
Budgeting and forecasting
Corporate finance
Performance management
Reporting and
control
Internal control
Financial recordkeeping
Cost accounting
Financial statement preparation
Financial statement analysis
Tax compliance and planning
Integrated reporting
Technology and
Information systems
analytics
Data governance
IMA’s CareerDriver
Data analytics
The IMA Management
Data visualization
Accounting Competency
Business
Industry-specific knowledge
Framework reflects the
acumen and
Operational knowledge
competencies needed to sucoperations
Quality management and continuous
improvement
ceed in the rapidly changing
Project management
practice environment. The
Leadership
Communication skills
IMA’s approach to compeMotivating and inspiring others
tency building is unique in
Change management
Talent management
that it does not stop at the
Collaboration, teamwork, and relationship
framework level in defining
management
Negotiation
essential competencies,
Conflict management
which is helpful at the broad
Professional
Professional ethical behavior
level of the profession.
ethics and
Recognizing and resolving unethical behavior
Instead, IMA directly convalues
Legal and regulatory requirements
nects this framework to
what it means at the individual job role level. T h e
CareerDriver tool on the
IMA’s website identifies the level
It is time for accounting and finance
of competency needed for 46 indi- professionals, especially management
vidual job roles for each of the com- accountants, to make sure their compep e t e n c i e s i n t h e f r a m e w o r k tencies are at the highest level possible.
(http://bit.ly/2L9YPM6). Newly Only then will they be ready to forge
updated to reflect the changes in the ahead in any endeavor.
q
framework, CareerDriver enables
users to self-assess their current Raef Lawson, PhD, CMA, CSCA, CPA,
skills, identify short-term skill gaps CFA, CAE, is professor-in-residence
or long-term learning opportunities, and vice president of research and policy
and fill those gaps with specific at the Institute of Management
IMA and public courseware.
Accountants, Montvale, N.J.
21
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