Academic journal article Journal of Accountancy

Are You Ready for the New Accounting?

Academic journal article Journal of Accountancy

Are You Ready for the New Accounting?

Article excerpt

How well prepared are accountants in business and industry for the new accounting--where the emphasis is on information analysis and strategy setting rather than on the conventional tasks of data collecting and historical reporting? And how well prepared are financial managers in public practice for their changing relationships with corporate clients?

In an effort to answer those questions--and to help the profession prepare for the future a practice analysis of management accounting surveyed some 800 CPAs and other finance professionals representing a broad segment of the profession. We asked them about the nature of the work they perform today and what they anticipate they will be doing in the future as the profession evolves from the traditional stereotype of number-crunchers or corporate cops to team members, business partners and decision-support specialists. (For more on this evolution, see "Finance's Future: Challenge or Threat?" JofA, Apr. 97, page 38.)

The results of this practice analysis are of more than academic interest. Applied correctly, the information can be used to help

* Industry CPAs to arm themselves with the skills they will need if they are to succeed as true business partners, to operate their finance operations more effectively and to develop aids in performance evaluation, career counseling, recruiting and training.

* CPA firms to develop new services.

* Accounting educators to develop new curricula that will better prepare students for work in corporate accounting.

In tins study, me corporate accounting work was divided into 30 activities and 162 relevant areas of professional competencies. This information was compiled with the assistance of the Institute of Management Accountants committees on academic relations and management accounting practices and the American Institute of CPAs management accounting executive committee.

WHAT DO YOU D0?

Without a doubt, management accountants perform a wide assortment of tasks. Exhibit 1, page 43, shows how often accounting professionals in the survey perform each of 30 activities.

[Exhibit 1 ILLUSTRATION OMITTED]

The accounting managers were asked to list and rank by order of importance the professional activities and responsibilities that their employers will probably value most highly in two and three years.

The respondents named the following--many of which did not even exist just a decade or so ago:

* Customer and product profitability.

* Process improvement.

* Performance evaluation.

* Long-term strategic planning.

* Computer systems and operations.

* Cost accounting systems.

* Mergers, acquisitions and divestments.

* Project accounting.

* Educating the organization.

* Internal consulting.

* Financial and economic analyses.

* Quality systems and control.

In another part of the study, we asked the management accountants to list, on a scale of 1 to 5, with 5 being the most important, the activities they considered vital to their work and, using the same scale, to assess the knowledge, skills and abilities needed by entry-level accountants (see exhibit 2, page 45). By measuring the gap between the two, we were able to determine what successful CPAs must learn on the job or in continuing education courses. Or, put another way, the practice analysis reports the gap between what accounting students learn in college and what they actually need to be competent corporate accountants.

[Exhibit 2 ILLUSTRATION OMITTED]

HOW TO USE THE DATA

There are many ways to use these data--depending, for example, on your company's industry, your role in the organization and whether you want to use it as a guide in hiring new accountants or in planning a professional training program for your staff. Because of space limitations, we are able to show only a handful of applications. …

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