Roles and Practices in Management Accounting: 2003-2012: This Article Is Based on Research Supported by SAP, Alta Via Consulting, and IMA[R]
Clinton, Douglas B., White, Larry R., Strategic Finance
How has management accounting changed during the last decade? How have management accountants' roles and responsibilities changed? Is there a particular focus accounting professionals should be concentrating on? To find out, we replicated the Ernst & Young and IMA "2003 Survey of Management Accounting." Since 2003, practitioners and researchers alike have been talking about the implications of the findings, which resulted from more than 2,000 IMA member responses. In addition, many interested IMA members have been asking for an update. As did the 2003 results, this replication provides information to the accounting profession that presents disturbing outcomes if apparent trends continue. Unfortunately, the disturbing findings from 2003 haven't changed for the better in the 2012 survey.
The 2012 survey sample was considerably smaller than the 2003 sample, with approximately 200 respondents, but the characteristics of both populations--exclusively IMA members--are remarkably similar. In this article, we touch on some of the highlights of the current results. The complete results of the 2012 survey, demographics, and longitudinal comparisons with the 2003 survey are published in detail in the Fall 2012 issue of Management Accounting Quarterly.
The 2003 survey identified six key findings:
1. Cost management is a key input to strategic decision makers.
2. Decision makers and decision enablers identify "actionable" cost information as their topmost priority. (For purposes of the analysis, decision makers run the finance or accounting department and decision enablers include all other management accountants.)
3. Several factors impair cost visibility.
4. Adopting new cost management tools isn't a priority in the current economic environment.
5. Traditional management accounting tools are still widely used.
6. Management buy-in, adequate technology, and in-house expertise in addition to a clear, quantifiable value proposition are important triggers for the adoption of best practices.
Issues and Questions
The results of our 2012 longitudinal survey show that most of these findings are still true, but they also show significant shifts in some cases. The top priority has shifted from cost information to cost reduction. Triggers for the adoption of best practices (finding No. 6) show that management buy-in, adequate technology, and in-house expertise also have shifted positions significantly. Respondents are now more focused on the human resource/expertise constraint. Management buy-in is still important, but technology isn't considered a major constraint. What's most alarming, though, is that the absolute lack of improvement in findings Nos. 2-6 over nearly a decade is in significant conflict with cost management providing a key input to strategic decision makers (finding No. 1).
It appears that management accountants have shifted the improvement of cost management information to the bottom of their collective "to do " list for the last decade--apparently with the blessing of the organizational leadership team. Given strong indicators of the success of management accountants in gaining increasing roles in strategy development and risk management, it seems logical that some new risk management or planning roles are providing the information the organization needs and that cost information is becoming less valuable as a strategic input. Alternatively, the growing awareness of a human resource constraint may indicate that today's management accounting workforce doesn't have the expertise or skill set to design and implement innovative cost information solutions. This view would indicate the presence of a significant opportunity that's being missed. We encourage you to keep this question in mind as you evaluate the key findings from the longitudinal analysis of the 2003 and 2012 surveys.
Comparing 2003 and 2012 Results
Looking at the substantially consistent results over nine years and placing some emphasis on the key changes identified in the 2012 survey, we have come up with a few themes that seem to characterize the behavior and practice of management accountants toward their cost management responsibilities across this time frame: