Magazine article Strategic Finance

New Imperatives: How Should Colleges and Universities Prepare Accounting and Finance Students for a New Future?

Magazine article Strategic Finance

New Imperatives: How Should Colleges and Universities Prepare Accounting and Finance Students for a New Future?

Article excerpt

Technology is redefining the role of the management accountant while changing the business landscape and the management accounting profession at an unprecedented speed. To prepare future professionals, management accounting education must change as well. The newly revised Management Accounting Competency Framework, published by IMA[R] (Institute of Management Accountants), can help provide guidance on how to accomplish this feat.

CURRENT MANAGEMENT ACCOUNTING COMPETENCY FRAMEWORK

In 2016, to help its members, students, and the profession at large prepare for careers in management accounting, IMA published its Management Accounting Competency Framework. The Framework is a continuation of IMA's ongoing research that explores the changing role of management accountants and competencies these professionals need for career success. This research has documented the ongoing evolution of the role of the management accountant from an accumulator and reporter of financial information to being a more strategy-oriented business partner.

The Framework encompasses five domains of knowledge: Planning & Reporting, Decision Making, Technology, Operations, and Leadership. It's the foundation of IMA's CareerDriver[R] tool, which helps finance and accounting professionals self-assess their competencies and prepare themselves for career advancement.

THE CHANGING PROFESSION

Since the publication of the Competency Framework, the field of management accounting has experienced considerable change.

We can think of this change as being four "lines of sight" for finance teams: oversight, insight, hindsight, and foresight. Oversight, a traditional CFO role, includes resource allocation, ensuring a healthy financial profile for future investment, and more. Hindsight entails looking backward to influence the future in a positive way-in other words, using historical data for future projections. Insight involves turning information into intelligence; it's where business partnering begins. Foresight is where finance professionals play a leading role in anticipating the future and helping their organizations envision the future. It includes strategic planning, competitive moves, and innovation. For today's finance functions, being able to provide foresight is increasingly important and expected.

A key factor driving this change is the relentless evolution of technology While technology has always been an important part of the management accountant's skill set, that importance is increasing dramatically. Technological advances are reducing, and in some cases eliminating, many of the routine tasks performed by management accountants, freeing them to add more value as business partners with the rest of the organization. Strategic management, which includes strategy formulation, validation, and implementation, is becoming an essential competency for management accountants to possess.

To succeed in their evolving role, management accountants will need to employ more sophisticated analytics. In the past, they provided descriptive and diagnostic statistics. Today, as shown in Figure 1, they must move to the higher end of the analytics continuum-to predictive, prescriptive, and adaptive analytics. But they require new competencies to be able to perform this type of analysis. Therefore, it's essential that management accountants acquire these skills in order to be relevant and "fit for purpose," not only today but also for the future.

THE NEW IMA MANAGEMENT ACCOUNTING COMPETENCY FRAMEWORK

To ensure that its Competency Framework reflects the current and future competencies management accounting professionals need, IMA formed a task force that was charged with examining the changing practice landscape and proposing any necessary changes. After an extensive process (which included a review of primary and secondary research, focus groups, and extensive deliberation), the task force has developed a revised Framework, depicted in Figure 2. …

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