Question 1 – Do you agree with this definition of management accounting? How may it be improved?
Response
Number
Do you agree with definition?
How may it be improved?
1
Yes –the definition is excellent
Improving decision making, planning and control are not the only criteria that leading to sustained success.
You need to need to include appropriate behaviours e.g. Ethics, communication and learning.
2
Yes – management accounting
principles should be set out in writing –
this document comprehensively does
so.
Include more aspirational references – related to enabling skills relevant to the role of the CFO
3
Yes
4
Yes
7
Yes
Appears to be too rigid in its view of organizational strategy.
8
No
Needs to be more succinct.
9
No
12
Yes
Could be improved by a reference to ethics/ ethical behaviour
13
Yes
Could be improved by use of the phrase "contributing to evidence based decision making".
16
Yes
19
Yes
The only word missing is “effectively”
21
No
Does not like “What management Accountants Do” Diagram (Figure 2)
23
Yes
29
No
Should include the management accountants role in assisting with setting and achieving operational, management and
strategic goals.
31
Yes - it will help decision makers to
recognize the critical role that MA's play
Suggested changes to Figure 2 and inclusion of term “sustainable”.
32
Yes- provides a good description of
what management accountants do.
33
No
Should cover core functions of risk, governance and influence.
34
Yes
Suggested changes to Figure 2
1
Response
Number
Do you agree with definition?
How may it be improved?
35
Yes – it explains the value created by
management accounting
36
Yes
Slight change suggested - include contribution of management accounting to value creation
37
Yes – definition is comprehensive
Should also bring in concept of responsible governance
40
Yes
43
No
The definition is more about what management accountants do than what management accountants are.
44
No
There appears to be a disconnect between the definition and the principles. Language is too vague – it needs to be more
direct. Risk management should be included.
45
Yes – definition reads well.
Should perhaps include the role of the management accountant as providers of strategic insight.
47
Yes
49
Yes – accurately reflects the evolution
of management accounting from
traditional cost accounting to strategy
setting and business decision making
50
No – unsure if a definition is required
and any definition will be too restrictive
and prescriptive
51
Yes – it reflects the role of the
management accountant well
53
No
It should include process management" as this is the most important role that CIMA members perform in organisations.
54
No
Future looking role of Management Accountants should be more recognised.
59
No – does not clearly define the
domain of management accounting
Should highlight the management accountings leadership role in organisations
60
No - it involves duplication
63
No – last part of the definition is a
repetition.
64
No – too wordy
66
No - too complex
Needs to be simpler
69
No – too broad
Use term “management accounting professionals” rather than management accountants will make the definition relevant
to people with other qualifications that are involved n the finance function
72
Yes
75
No
The term “Finance “ needs to be included
2
Response
Number
Do you agree with definition?
How may it be improved?
77
No
Should indicate that it includes both financial and non-financial information
80
Yes – the definition achieves its
purpose
81
Yes – it is a well crafted definition
82
Yes -
83
Yes – in overall agreement
85
No – does not cover Management
Accountings Common Body of
Knowledge
88
No – too broad – does not capture sets
management accountants apart from
other professional groups?
89
Yes
95
Yes
97
Yes
100
No – too long winded
102
No
105
Yes
106
No – too long
107
No – management accounting does not
create value
Should be reworded to say that management accounting enables value to be created
108
No – too long and orientated to large
organisations
A simpler definition would say something like – management accounting is the “provision of decision making information”
109
Yes
110
Yes
111
Yes – in broad agreement
112
Yes
113
Yes
Should focus on strategy planning as well as execution
114
No- management accounting does not
“create value” but rather “reports on the
creation of value.”
Definition should cover strategy formulation.
Perhaps a bit passive –could also cover the management accountants role in achieving organisational change.
Would modify to include a section on acting ethically and with integrity
Should also mention financial information or accounting
Should also make it clear that value is created over both the short and long term
It exaggerates the importance of Management Accountancy within an organisation
It should be less focussed on large corporations.
3
Response
Number
Do you agree with definition?
How may it be improved?
115
No – definition is nether precise
enough or appropriate Describes what
it does rather than defines what it is.
116
No – opposes the use of the word
ensure.
118
Yes
119
No – the definition reflects only the
Macro or strategic level of management
accounting
120
No – the definition covers only strategy
and excludes middle and short term
planning.
122
Yes – definition is clear and provides a
strong and broad platform for Finance
professionals in both the public and
private sector
126
No – it is too general
127
Yes – I like its mention of value
creation and sustainable success
Suggests using the term rational rather than sound decision making.
128
Yes – I agree with its emphasis on
decision making
Could be improved by emphasizing the key objectives of decision making, planning and control
130
Yes – the definition is holistic
131
Yes – agree with first part
132
Yes – it is a practical definition of MA,
which captures the essence of what
Management Accountants do
133
Yes
134
No – the finance function involves a
broader range of activities and skills
than management accounting
135
No – the definition is too generic
It should be made more specific so as to distinguish between the management accounting profession and competing
professions such as business analysts, planners
136
Yes
Suggests replacing the phrase ensure sustainable success with “lead to sustainable success”
137
No – management accounting cannot
ensure sustainable success or create
Potential revisions for the word ensure include "enhances the opportunity for" or "enhances the probability of" or "assists
in sustaining” or “contributes to”
It should also cover micro or lower level management accounting functions
Should include “data planning” in second half of the definition - before “the comprehensive analysis”
Has concerns about the use of the word “ensure” – suggests replacing it with “increases the likelihood” of sustainable
success.
4
Response
Number
Do you agree with definition?
How may it be improved?
value
138
Yes – definitely agree with this
definition
140
Yes
141
Yes – it is an appropriate definition.
142
Yes – it is a comprehensive definition
143
No – too vague – could apply equally to
other business professionals such as
HR, Business Intelligence or Acturial.
144
No – it lacks any reference to the
communicating with impact and/or
influencing element that is espoused in
the Principles
145
Yes – I tend to agree
The second part of the definition should be appear first as it is less generic
146
Yes – I like the definition
Perhaps it should be widened to mention the provision of advice & guidance across an organisation.
147
Yes – I agree in Principle
Suggested minor changes to emphasize behaviour and expectations – “management accounting proactively creates and
“Implement and control the execution of their strategy, while discovering new opportunities for the business.”
149
Yes
150
No – it is too narrow and close ended.
151
Yes – it provides an accurate and
comprehensive description of the
purpose of management accounting.
153
Yes – it is a comprehensive definition
It would have more impact if it was less complex
154
NO – it sets out the purpose rather than
the essence of management
accounting. The proposed definition
fails to indicate who takes decisions
influenced by management accounting.
It would be advisable to develop a more extensive definition of management accounting, for instance one which begins
with a statement about what management accounting is i.e. Management accounting is a process of value creation.
155
No
The definition should include the terms finance or financial and also refer to internal reporting.
156
No
Needs to be broader, to include the term finance and identify those aspects of management accounting that are unique.
It would be improved by the insertion of “RELEVANT” before the word information I note that the first Principle refers to
Relevant Information.
Suggests replacing sound with “evidence based” decision making.
The definition should be broadened to cover any aspect of an entity’s strategy formulation and externality.
Or Management accounting is a system used to create value.
5
Question 2 Do you agree with the suggested principles? (a) Are there others which should be considered? (b) Do you think
it’s possible to have a single set of principles which can be applied universally across different sectors, geographies and
sizes of organisations? (c)Do you believe that the Guiding Principles would have a positive impact on the way you run your
business?
Response Do you agree with the
Number
suggested principles?
3
Yes
4
Yes
6
7
Are there others which
should be considered?
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
Ethics should be included as a
fundamental principle
No – Principles 1 and 3 are
“motherhood” statements and don’t
pass the “so what test”.
They appear to be focussed on global
organisations and not so relevant to
SME’s or NFP’s.
8.
Yes – they reflect what I do every day.
9
Yes – with suggested changes to
wording of principle objectives
12
Yes – mostly agreed. I would like to
see ethics incorporated into each
13
With Principle 2 - there should be more
emphasis on understanding the
business as opposed to building
computer models.
14
Yes - There is a nice fit between the
three principles and the three levels of
what management accountants do .
16
Yes – suggested changing title of
“Communicating with Impact” Principle
to “Influencing and Improving Decision
Making
6
Response Do you agree with the
Number
suggested principles?
17
Yes – with minor changes to wording of
objective for principle 3
20
Suggests changing the objective of
principle 3 ,Communicating with Impact
, "to improve decisions about strategy
execution cascading down to all levels”
21
Suggests changing the wording of
Principle 3 to "influencing and
improving decision making"
22
Prefers” Influencing with Impact “ to
“Communicating with Impact” for
principle 3
25
Suggests changing the objective for
Principle 3 - to "to integrate strategy on
all levels" and wording of 3.1 – to
“promote strategy in day to day role”
27
Are there others which
should be considered?
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
There possibly needs to be
another principle/ sub principle
to cover business partnering???
- highlighting the need for
increased business acumen
and closer working relationships
with other businesses or
operations.
31
Yes – these principles will be valuable
across all types of organisation
32
Yes - The principle s are "spot on" and
are interlinked because if you are to
"communicate with impact" you need
relevant information and solid options/
simulations
33
Consider changing the term "relevant"
in the title of Principle 1 as it is not
derived from behavior but from outputs.
Suggested Suggests alternative
objective for Principle 3 - "to improve
decisions about strategy execution ,
review and adaption"
7
Response Do you agree with the
Number
suggested principles?
35
Yes
36
Yes – Principles are ok
37
No - Principle 2 - Modelling Value
Creation - the language is quite
technical and does not explain clearly
what is expected of a management
accountant by shareholders.
Are there others which
should be considered?
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
Principle 3 - Communicating with
Impact - is too broad. What type of
communication do accountants
specialise in - business, financial and
strategy.
38
With Principle 3 - Communicating with
Impact - to avoid stakeholder conflicts it
is important to ensure relevant and
tailored information is given to different
stakeholders.
40
Suggested change for Principle 3.2 better decisions at all levels of the
business cycle. Perhaps combine 3.2 &
3.3 to read relevant and effective
communication facilitates better
decisions.
41
No – has an issue with the term
“modelling” in Principle 2
44
No - has a problem with wording of
Principle 3. What is the link with section
A.? Language needs to be stronger.
46
The principles should cover the
strategy of decreasing risk.
48
Suggested addition to Principle 1.3 Information is conextual and timely.
Comment on definition of principle 3 insight is not always simple.
51
Yes – the principles are good – but
8
Response Do you agree with the
Number
suggested principles?
Are there others which
should be considered?
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
detailed guidelines on minimum points
to be covered in reports should also be
provided.
52
Comment on Principle 2 Communicating with Impact communication should be two way and
unbiased.
53
Comment on principle 2 - process
creation and validation can create
value for an organisation. Comment on
Principle 3 - should include
communication channels - how the
communication occurs
54
Comment on Principle 1 - Preparing
Relevant Information - information
should be cost effective Comment on
Principle 3 - Communicating with
Impact - communication should be two
way.
55
Comment on Principle 3Communicating with Impact communication should be timely.
58
Comment on Principle 2 recommended changing title to
Modelling Co-value Creation. Change
wording of objective to demonstrate the
integrated relationships between inputs
and outcomes.
59
Suggested new title for Principle 3 Communicating with Impact "Providing Decision Useful Information"
62
Yes – Principle 3 – Communicating
with Impact is of key importance if
management accountants are to
remain relevant.
63
No - Principle 2 - Modelling Value
Creation- is too ambiguous.
9
Response Do you agree with the
Number
suggested principles?
64
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
Yes
Yes. When reading the principles set out in this
document, I felt that it was a good description of
much of what my colleagues and I do.
Suggested changes to titles of Principle
1 – this should be Providing Relevant
Information, Principle 2 should be
Championing value creation.
65
68
Are there others which
should be considered?
Would like to see the areas of
governance, compliance and
accountability highlighted in a
principle.
Yes – I will be able to assess the
management capabilities in my
organization against these
69
No, principles are described
broadly enough that there
shouldn't be any matters that
can't be classified within them
72
With Principle 2 -Modelling Value
Creation - a broader verb than
modelling should be used.
73
Principle 3 - Communicating with
Impact - should relate more to
actionable decisions.
79
Yes – especially with Principle 3 - you
cannot have impact unless you
communicate.
82
Yes - the proposed Management
Accounting Principles are an excellent
benchmark against which to assess
current management accounting
practices and processes in both the
public and private sector. They provide
an excellent basis for enhancing
management accounting practices
across the public sector.
84
Yes – they are very well drafted and
logically connected.
85
No. Comment on Principle 1 – should
mention accounting and nonaccounting information. Does not like
10
Response Do you agree with the
Number
suggested principles?
Are there others which
should be considered?
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
Communicating with Impact as a
phrase.
87
Would welcome the inclusion of
a Principle covering regulatory
compliance
88
Yes – though Principle 1 and Principle
3 could apply to any profession.
89
Yes
90
Yes – they provide a good grouping.
92
No. Do not fully understand what the
GMAP are trying say- let alone how
they are supposed to be used. Do they
“outline the fundamental values and
qualities that represent best practice
MA”? I
They are activities rather than
principles. It is not obvious what
qualifies an activity such as “Preparing
Relevant Information” as a “principle”
and why these principles” have been
organized into a pyramid.
Believes there are more than 3,
but doesn’t suggest any
additional.
The additional/alternative
principles that come to mind
would be: “Trust through
transparency”, “Insight through
analysis, control through robust
processes” or “Compliance
through integrity/governance
The overriding principle for an effective
management accounting system is
probably to drive better decisionmaking.
95
Yes – simple but comprehensive
97
Yes -
100
Comment on Principle 2 – Modelling
Value Creation is a jargonistic and
should be rephrased.
102
No
I'd also like to see a principle
around 'risk and innovation
opportunity management”
11
Response Do you agree with the
Number
suggested principles?
105
Yes - A core set of values should be
universal while others are applicable in
certain circumstances.
106
No – would remove Principle 1 – the
information is already there and
Management Accountants are
examining it from a different
perspective
107
Are there others which
should be considered?
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
Yes
No – but this is because my business already
has a dedicated finance professional who
operates according to them.
The Principles should also
cover the area of compliance
with the law and the
organisation’s code of business
ethics – especially in relation to
information collection. This
should also cover those key
attributes or activities that drive
the sustained success of a
business.
109
Yes – fully agrees with the 3 Principles.
As a development and non-profit
professional, these principles would not
only make management accountants
more desirable but exposed to more
opportunities
111
Yes
Yes – believes the principle of
strategic alignment should be
included. Management
Accountants need to be seen as
strategic instruments in meeting
corporate governance
standards as a way to further
compliment the functions of
Internal Audit and Risk
Management. This principle
could also ensure that
environmental, stakeholder and
value-driven initiatives/projects
are integrated in the profession.
12
Response Do you agree with the
Number
suggested principles?
Are there others which
should be considered?
Do you think its possible to
have a single set of
principles?
112
Greater emphasis should be
given to the integrity of
individual management
accountants and their
responsibility to communicate
such behaviour upwards.
Yes – with a pragmatic mind-set
and the ability to apply them
selectively where appropriate.
Yes
Do you believe the principles will
have a positive impact on the way
you run your business?
We can hardly attempt to position
management accountants to
provide strategic management at
the most senior level if they do not
have the wit to work through a set of
principles and determine how best
to apply them in their own
organisations.
114
Comment on Principle 2 – it implies
that the business model is something
which is fixed when in reality most
businesses will have a number of
business models which may vary from
each other and can change over time.
115
Yes – broadly agree
Yes - if that single set of principles
encompasses all aspects of a
business management accounting
system. However, in practice, the
extent of application of the
Principles to various organisations
may differ depending on the
industry/sector, geographical
location and size of operation. n.
116
Yes – I think that these principles
address the core of what management
accountants do
Yes. I think they are broad enough
to be universally utilized.
119
Yes – at the Macro or strategic level of
the organization.
I do not believe guiding principles will impact a
business unless the upper levels of
management adopt them.
13
Response Do you agree with the
Number
suggested principles?
Are there others which
should be considered?
120
Proposes additional principles
or sub-principles covering –
The Principles have been defined
correctly but do not fully capture the
essence of management accounting.
122
Yes
123
Yes
125
Yes-publishing of such principles by
widely recognized professional bodies
will help to strengthen the role of
management accounting within
organizations
126
Yes.
127
Yes – they will definitely support my
consulting work
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
engaging all of the
organization's staff in
collecting information,
so that this process is
integral to all of the
organization's
activities.
collecting relevant
information in a timely
manner,
documenting all the
relevant management
information because
information that is
recorded either
digitally or on paper
has the most value.
improving on
management
accounting methods
and practi
14
Response Do you agree with the
Number
suggested principles?
Are there others which
should be considered?
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
128
The other principles which
should be considered are:
No
Yes – they will provide a guidance for business
They will need to be adapted for the
public sector - for public sector
organisations the use of terminology
such as “value creation” can be a
difficult one to grasp. They often
refer to their deliverables as
outcomes, many of which are
difficult to quantify or translate in a
consistent and recognised way to
an economic value.
The Principles relate well to how the
management accounting team would see its’
role. However, not all senior managers are fully
bought in to the concept of transparent decision
making, choosing selectively information that
backs their argument or position, or struggle to
make difficult choices between options. Gaining
acceptance to the principles more widely across
senior executives will be a challenge.
Yes
Gap Analysis on the
current situation and
target outcome (Past,
Present and Future)
Predictability of
potential solution or
impact
129
Yes – they have covered almost all
aspects of management accounting
130
Suggests a sub principle for
Principle 3 – Communicating
with Impact – covering
leadership
131
Yes – but suggests rewriting them in
the format of an IFRS standard
132
Yes – they encapsulate the core
themes of MA and have been well
derived from the definition.
133
Yes – they articulate well and cover the
key management accounting functions.
I think we should add a principle
of Cost to Effect - in my opinion
every analytical and
performance measurement
activity should be cost effective.
No – none that add materially to
the existing three
15
Response Do you agree with the
Number
suggested principles?
134
No - In contrast to the broad range of
finance activities the three
management accounting principles are
quite narrowly defined. This results in
problems when the attempt is made to
classify disparate management
practices under individual principles in
section five. Problems include detailed
practices not really fitting under a
particular principle, inconsistencies in
classification and repetition.
136
In their present state they are activities,
rather than underlying principles and
we recommend that they are expanded
to make it clearer what is expected. For
example “Communicating with impact”
could be replaced with “Communication
should be clear, accurate and relevant”
and similarly, “Modelling value creation”
could be renamed “Stress and scenario
testing, and evaluation should be
integral to the decision making
process”.
137
Yes
140
Yes – they capture the core values of
management accounting.
I think the second principle could be
enhanced by reference to the risks
involved in the value creation model,
e.g. “Modeling Value Creation,
Identification and Assessment of
Associated Risks”
141
Yes – the principles are relevant and
formulated in a manner that
encompasses all stages of contributing
to a sound business decision making.
However it does not seem to give
sufficient emphasis to the role of an
appropriate, sufficient and at the same
time easy-to-use reporting system.
Are there others which
should be considered?
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
Yes. The only caveat to this is the
definition of “Value” which may well
be different in a charitable or nonprofit making organisation
compared to a commercial
organisation.
I think the overall impact of the Principles will be
positive in most businesses, as they provide a
clear and succinct message to management
accountants which they can use in most
situations.
There is an opportunity to apply
these principles in different
conditions and adjust to specific
situations. However, it must be kept
in mind that, as international
standards, they cannot fully capture
regional variations in beliefs,
practice and tradition.
16
Response Do you agree with the
Number
suggested principles?
Are there others which
should be considered?
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
The principles will help within our business as
we try to better define the role of the finance
organization, as we are currently going through
a restructuring of the finance function. They can
also help better assist us as we revisit our
training and development and the 12 principles
can help us define core competencies in a
consistent way.
142
They are adequate - but caution is
required with principle 2 – “modelling
value creation”. The emphasis should
not be on building computer models but
rather to understand the business.
There is no doubt that appropriate
simulation models can aid analysis and
forecast but it will be problematic, in
practice, if they were to be central
focus of the principle.
144
Yes -the principles are appropriate and
at the highest level encompasses the
core elements of management
accounting
Yes - they are sufficiently broad so
that they can be applied across all
organisations.
145
Yes - I like the idea of the three
Principles and I feel they are not too
narrow or too vague in expressing the
real core of what we do
Yes – I think these principles should
be applicable universally, regardless
of sector, size and geography.
146
147
They reflect the 'spirit' of
management accounting and are
therefore relevant and applicable
regardless of these differences.
It is possible to have one set of
principles for different sectors but
there should be more prominence to
factors that affect the not for profit
sector.
Yes – they are good.
My only concern is the principles
suggest prepare-model-communicate.
It might be worth to think about the
following: collect and analyze data,
evaluate opportunities and risks,
provide guidance for decisions, provide
solutions.
Yes
Yes - if they drive proactive behaviour and
forward looking picture. No if they support
reactive, passive behaviour.
17
Response Do you agree with the
Number
suggested principles?
149
Yes - these three principles in my
experience cover the key expectations
of management accountants.
150
Recommends reviewing and refining
the 3 headline principles already
formulated to reflect the wider roles and
domain of Management Accountants,
that go beyond the informational role,
to being part of the value creation and
strategic decision making process.
152
Yes - The three core principles would
seem to cover both the necessary
processes and the associated
capabilities that are required to support
the business to make robust decisions,
whilst managing risk and building a
sustainable future for the company.
154
Yes - In general, we agree, with the
following reservations.
Are there others which
should be considered?
Sustainability should also be
taken into account as it is an
essential ingredient for a
company's long-term success.
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
Yes - as defined, these principles
would appear to be widely
applicable across sectors,
geographies and organisational
scale.
Yes - they are helpful in broadly clarifying the
role and expectations of a management
accountant.
It may not be feasible to adopt a
'one size fits all' approach to
developing a single set of principles
which can be applied universally
across different roles and domains
of management accounting,
geographic regions, jurisdictions
and sizes of organizations.
The language of the second principle
should be clarified. The statement
“Modelling value creation” is too
general, and also applies to managers.
Furthermore, the principle fails to
indicate who is to create value.
155
Engaging with the business (or
business
understanding/acumen) and
Business Partnering should be
part of the principles – and
possibly be added as separate
principles.
18
Response Do you agree with the
Number
suggested principles?
157
Are there others which
should be considered?
Do you think its possible to
have a single set of
principles?
Do you believe the principles will
have a positive impact on the way
you run your business?
Yes – agrees with the Principles but
disagrees with some of the wording.
Principle 3 – Communicating with
Impact - might want to broaden this to
define the management accountant as
an active participant in decision
making. A phrase to consider in
replacement is " Making an Impact"
With Principle 1 – “Preparing Relevant
Information" the document describes
the need for both relevant and accurate
information. I think it might be helpful to
discuss the fact that these two
concepts at times may be at odds with
each other.
19
Question 3 – Is the “Pride” mnemonic appropriate? Are the values the right ones on which to focus? Are there others which
you think should be considered?
Response
Number
Is the “Pride” mnemonic
appropriate
Are the values the right ones
on which to focus?
Are there others which you think should be considered?
03
No - the words have been chosen to
make the mnemonic work
Diligent is too boring. Integrity may be
a better choice than ethical
Suggests a value for fact or evidence based.
04
Yes – its very good
07
No
08
No – pride comes before a fall!
12
45
IT Skills or expertise
No – the term “professional” is too
common and does not differentiate
67
68
independence & impartiality are also important
Yes – its is appropriate and
memorable
77
81
Suggests a value relating to taking a collaborative approach.
No – it could be seen to be pretentious
Yes – they are all must have values
84
88
No – it fails to set management
accountants apart from any other
profession.
89
Yes – it is excellent
Suggests adding an S to represent focussing on business specifics
92
Should be formulated as nouns rather
than verbs.
.
95
Would like to see something representing objectivity and working as a team.
97
Yes
100
No – it is too inward looking
102
No
It would be better to use a mnemonic that is more outward facing, such as
"DRIVE" (i.e., Diligent, Relevant, Innovative, Value-enhancing, Ethical).
20
Response
Number
Is the “Pride” mnemonic
appropriate
105
Yes
106
No – it may come across that we are
proud rather than proud of what we do
107
No – it is dated and some cultures do
not see pride as a virtue
Are the values the right ones
on which to focus?
Are there others which you think should be considered?
Communicating with impact should also be one of the values
Would like to see some emphasis on being responsible and speaking up and
taking action if you see something not right.
Also suggests Curiosity/inquisitiveness – management accountants should be
asking lots of questions and not taking yes for an answer.
109
Yes – it is appropriate and relevant
111
No – may leave the Profession open
to ridicule and parody. These values
are too important to be reduced to a
mnemonic.
112
Yes -
113
Innovation is more of a collaborative
activity than an individual value.
I should represent “Integrity “rather than “Innovation”
Others might include “proactive”, forward looking”, “creative”, “balanced” and
“imaginative”.
114
No -the words have been chosen to fit
the mnemonic
115
Yes – it is highly appropriate and
representative of the professional
values of management accountants
116
Yes – is appropriate – though some of
the values appear to overlap.
Innovative seems to be the one that
doesn't fit quite as well as the others.
Should be values covering Integrity and Accountability.
120
No -
Diligence could be excluded as it is
obvious that any professional activity
requires diligence and commitment.
Suggests including the term Management to reflect the fact that, first and
foremost, the management accounting function has to help manage the
organization. This would result in a PRIME mnemonic.
127
Yes
Yes
128
Yes
Yes
130
Yes
133
Yes – it is a useful aid to memory.
21
Response
Number
Is the “Pride” mnemonic
appropriate
135
No -
Are the values the right ones
on which to focus?
Are there others which you think should be considered?
Feels the following values are most important 1)Objectivity - information based
approach to solving problems
2) Integrity/Ethicalness
3) Professionalism - adhering to the Management Accounting principles when
performing work
4) Diligence and completeness
5) Responsiveness to change and driving change (Innovative)
136
No
“Competent” would be more accurate than “Relevant” to describe the expertise
required of management accountants; and “Reliable” should replace “Diligent” to
describe the standards of work required and reliability of information.
137
No
Suggested Possessed knowledge, ethics, skill and culture of teamwork, sense of
responsibility and good organization.
138
Yes
140
Yes
141
Yes- mnemonic covers all the
necessary values to focus on
142
Yes
143
No.
Values are behaviours you choose,
not skills you acquire i.e. Innovative”
isn’t a value.
144
No
Professional value is redundant.
147
Yes
149
Yes
150
Fits perfectly with the values all
management accountants should
bring to their work.
Another essential value which could be added is “Leading and Motivating
Suggests a value for being proactive rather than reactive.
Suggests a value for effectiveness.
143
Yes
154
Yes
22
Question 4 Does the performance management cycle resonate with you? Does Figure 10 helpfully represent the cycle?
Response Does the performance management cycle resonate with you?
Number
If not, please provide an explanation
1
Does Figure 10 helpfully represent the cycle?
The key role of a CFO is to use the performance management cycle to support
decision making, highlight risk and opportunities and evaluate investment options.
3
No – it is too complex? The diagram appears to lack flow as the arrows double
back on themselves and it looks like a question mark which is a bit odd
4
Yes – it is a very good representation
7
Is not sure how this framework differs from the plethora of existing performance
management frameworks.
8
The point of an illustration/figure is to clearly and succinctly impart knowledge,
figures 10-13 are completely the opposite. They basically need to be scrapped.
12
Yes
25
Suggested changes to the how to apply the principles to the performance
management cycle:
a)
Yes
Strategy :
Principle 1 - Are we emphasising longer term, non financial and external
information?
Principle2 - Do we understand -operating environment? -Long-term availability of
resources? -How we create value for our customers?
Principle 3 - Did we conduct strategic level discussions based on scenario
analysis? Did we communicate on a high level with an emphasis on required
outcomes?
b) Plan:
Principle1 - Are we emphasising shorter term, financial and internal information?
Principle 2 - Do we prioritise and resource options based on impact on required
outcomes?
Principle 3 - Did Management receive more detailed information? Did we agree
on targets? Did we record initiatives in the business plan to deliver targets?
c)Execute:
23
Response Does the performance management cycle resonate with you?
Number
If not, please provide an explanation
Does Figure 10 helpfully represent the cycle?
Principle 1 - Do we have access to real-time information about internal financial
and non-financial results?
Principle 2 - Which initiatives can be deployed? What are the early warning
indicators for quick corrective actions?
Principle 3 - Has timely feedback been provided across the organisation on
results against targets? What is the impact on required outcomes?
d)Review:
Principle 1- Do we analyse historic information based on internal and external
data? Do we use financial and non-financial data?
Principle 2 - Did we conduct a variance analysis to highlight differences between
actual outcomes vs planning? How can we facilitate continuous improvement?
Principle 3 - Has actual results been communicated across the organisation? How
can we refine and improve the results?
31
The diagram is generally ok
32
Framework is good and highlights how the principles are embedded in the
performance management cycle
41
The Performance Management Cycle model is narrow and should be expanded
to discuss/ define measuring and managing value
45
Management Accounting involves numerous short periods of execute review this is not captured in the Performance Cycle Diagram
68
Suggest s that plan validation (the use of a feed forward control loop -Ishikawa
and Smith 1972) be included within the “Plan” step of the performance
management cycle”
69
Yes - the description of the performance management cycle does resonate.
Suggests that the term 'performance management' is more of a HR term and
might be replaced by “Business Management”
Figure 10 is a bit busy - perhaps the governance areas do not need to be listed
around the circle.
80
Yes - the performance cycle is how a business should operate
Recommends that Figure 10 also brings out the importance of the data planning
feed to the process.
84
Yes – the cycle is very well represented and it is same as put in practice by
organizations
Yes – the cycle is very well represented and it is same as put in practice by
organizations
88
There is nothing on variances leading to corrective action?
24
Response Does the performance management cycle resonate with you?
Number
If not, please provide an explanation
Does Figure 10 helpfully represent the cycle?
89
No – it is very difficult to comprehend
95
It is not a very intuitive diagram. Data planning does not come out as strongly in
the figure as strongly as it does in the text
97
Yes
99
Suggests that the section on strategy should place more emphasis on external
information as a starting point. This is often overlooked and management can
become too internally focused.
100
Recommends that the document be more explicit as to how management
accounting can contribute to developing, refining, defining/ crystallising the
business model?
Feels that wrapping the Finance department’s activities around the performance
cycle adds little. Suggests that the expression ‘Opportunities/Threats’ be
reduced to ‘External changes’ and that an ‘outer ring’ (outside the Finance
activities) is shown representing all the other functions in an organisation and
their role in evaluating and assessing external (as well as internal) changes
through their unique ‘functional filters’ Also suggest that there should be a third
ring representing external advisors and significant influencers
102
106
No – reveals nothing new.
It is too static and not interactive
107
Yes
Yes
109
Yes -
111
Yes – it constitutes an excellent model. However there appears to be an inherent
assumption about the size and maturity of organisations.
112
Yes
114
No. A management accounting system does not lie at the heart of the business
model. The product/service offerings, the organisation and the strategy lie at the
heart of the business model and it is the management information system which
reports and validates the model. References throughout to “management
accounting system” should be to “management information system
115
The last of the four elements of the management cycle (control) seems to be
missing from the performance management cycle. ‘Strategy’ and ‘Plan’ should go
hand-in-hand as a plan originates from a strategy. Remove ‘Strategy’ to make
way for ‘Control’. Another shortcoming is that the performance management cycle
does not address any remedy or resolution in respect of dealing with the external
environment’s threats.
Yes - Figure 10 is very complete, encompasses most major practice areas of
management accounting and is relevant to any organisation.
116
Yes – it is refreshing to see the Performance Management Cycle included
The diagram is very complex and appears to focus on very large organization.
25
Response Does the performance management cycle resonate with you?
Number
If not, please provide an explanation
119
Does Figure 10 helpfully represent the cycle?
Yes
120
Overall, the diagram is accurate. However, the internal environment appears to
be isolated from the external one, where the diagram should show that the
external environment affects organization’s internal processes at the stages of
strategy and execution, and leads to changes in the initially developed plan and
business model..
122
Yes
127
The definition of strategy needs to be clearer.
128
Yes. Suggest that “political climate” be part of Governance
130
Yes
131
It was too simplified. For the phases: Strategy, Plan, Execute we have different
periods
Figure 10 is trying to deal with too many things:
This should be drawn as a set of separate cycles operating at different speed
(like in an analog clock).
• Strategy is usually defined once per couple of years (and may be revised and
refine once per two or more years)
• Plan is usually defined once per year - however the design process may be
divided into several phases;
• Execution is monitored once per month (or quarter) - and on the basis of an
execution we may refine the Plan or the Strategy.
However more often a Forecast is prepared and compared to the Plan.
So as was stated above the Review and Refine is addressed both to Strategy and
Plan separately. Additionally there should be included as a separate phase:
Forecast.
132
Environmental factors often set the 'context' in which organizations and
Management Accountants function. These could vary in terms of regional,
economic, political, legal, technological and other environmental factors. For e.g.:there are clear differences in the operating and professional environment of
'developed' versus 'developing' economies.
Management Accountants in developing countries face different challenges to
their counterparts in developed countries and the practice of management
accounting would consequently differ. Just as much as environmental factors,
differences in organizational factors also impact on how Management
Accountants perform their roles in organizations. While it may be argued that
irrespective of whether small or large etc and whether operating in developing or
developed countries, today's organizations have to compete in an increasingly
interconnected and an international market, the fact remains that the
environmental and organizational factors would shape the practice of
management accounting worldwide (in other words, 'what' and 'how' depends on
26
Response Does the performance management cycle resonate with you?
Number
If not, please provide an explanation
Does Figure 10 helpfully represent the cycle?
'where').
In this context, it may not be feasible to adopt a 'one size fits all' approach to
developing a single set of principles which can be applied universally across
different roles and domains of management accounting, geographic regions,
jurisdictions and sizes of organizations.
Therefore, it is recommended that the diversity in the role and practice of
management accounting worldwide is recognized either through a fourth MA
principle or in some other form.
133
The processes described in the diagram are a good reflection of the activities
and approaches that govern many of the roles and responsibilities of
management accountants. It is comprehensive and detailed.
Where it perhaps confuses is that the inner circles describe activities in a
clockwise sequential process of strategy, planning, execution and review.
The tendency is then to read the activities in the outer circle in a clockwise
sequential way, and imagine that these are placed where they are in the outer
ring because they have some link to the quadrant of strategy or planning or
execution, or review. This is not what is intended, but it may be worth
considering if each of the 12 activities “fit” to a quadrant. E.g. Resource
Allocation in the Planning Quadrant; Project Management in the quadrant
between Execute and Review and Refine.
There are also some activities in the outer ring, which while part of the role of
the wider finance function typically are not the realm of management
accountants, most tenuous being Strategic Tax Management. However, this is
perhaps more a reflection of specialism in larger organisations. For a document
which is aimed at management accountants, there seems to be a little “scope
creep” in the diagram to cover all activities of the finance function.
134
The business model in figure one, despite the inclusion of some feedback loops,
presents a fairly linear representation of business, which is often not the case in
reality. Indeed in CIMA’s publication Management Accounting: Retrospect and
Prospect (2010), the authors Bhimani and Bromwich argue that ‘the traditional
and conventional view that comprehensive planning and decision making should
precede operational action may falter as there is evidence from firms today that
decision objectives often emerge during the process of operations and that
decisions may be made whilst operational actions and production activities evolve
in practice. It is thus the case that action is at times subsumed in assessments of
information.’ The CDGMAP do not really reflect this depth of thinking and the
significance of uncertainty, change and emergent strategies.
135
The performance management cycle as described in the draft does not resonate.
The figure 10 is very helpful in representing the cycle. The model should not
27
Response Does the performance management cycle resonate with you?
Number
If not, please provide an explanation
Performance management cycle should cover:
1) Operational performance management and
2) Strategic performance management
Does Figure 10 helpfully represent the cycle?
aim to demonstrate the generic role of Finance but the specific role of
Management Accountants in the process of Performance Management. It is
important to differentiate and highlight how Management Accountants are
different from others.
The strategic approach taken by an organisation defines the kind of business
model that gets created. A business model comprises of a series of repetitive
value creating activities performed to obtain an output and outcome. Once the
business model comprising of inputs-activities-outputs-outcomes is finalised then
efficiency standards can be set up for the activities and outcomes of the business
model or its components. This is referred to as Operational Performance
Management.
The strategic performance is characterised by seeking a major change in the
business model as a result of a review of the components of the business model
or its environment, which has the potential to improve significantly the value
created by the business or reduce the risk inherent in a business process to make
the business more sustainable.
Strategic performance management cycle relates to measuring the long term
sustainability of the business in the light of strategic changes/plans.
Strategy usually involves major changes, which usually (not always involve)
significant outlay of resources and the plans once initiated are difficult to alter or
reverse in the short run.
140
The “Performance Management Cycle” shown does capture the different stages in
a typical cycle. I think most management accountants will recognise this.
141
The performance management cycle presented in Figure 10 reflects the process
of value creation and its relationship with Strategy, Plan, Execution and Review.
The value creation process is situated in the center of the model, as the heart of
the organization, at the same time the link is shown that it is a consequence of
Execution and the base for further development. The cycle also illustrates the
feedback loops properly.
142
We agree with the performance management cycle which is comprehensive
144
Yes although the PDCA cycle (Plan, Execute, Review and Refine) does not
always lead back to strategy
145
Have experienced this cycle in all of the organisations I have worked in. Have
found that organisations apply their own weight to elements of the cycle. One
organisation gives greater weight/importance to planning and another to
execution. The reviewing/refining stage is usually a knee-jerk reaction to
The visualization would be more complete if the business model part would
constitute integral string with other stages of performance management (i.e.
strategy, plan, etc.) which brings the diagram to be more consistent with PDCA
approach.
The figure implies that each PDCA cycle can lead back to review of strategy.
Much of the management accounting work is much more involved in tactical
and operational reviews that do not lead to strategic reviews.
28
Response Does the performance management cycle resonate with you?
Number
If not, please provide an explanation
Does Figure 10 helpfully represent the cycle?
correcting for unintended consequences of particular strategies rather than an
actual learning/feedback process.
Although the document does imply it a number of times - one crucial element of
management accounting - is a good understanding of the causal links that drive
the business model. It is a fundamental in providing scenario analysis and
modelling value creation.
Explicitly setting out the assumptions made around the business model opens is a
good starting point for communicating and (in some cases) challenging the results
of scenario/options analysis.
147
Figure 10 is a great model. I will use it myself now
149
Figure 10 is helpful, no suggested improvements.
150
The application seems stereotyped and restricted to a specific model.
Sustainability could be an area of focus, and isn’t captured.
154
In our opinion, the cycle is fine
155
Management accountants are the group within organizations that have the
broadest view of the business.
Employees turn to the CFO (and finance organization) because they have the
data and information nobody else has.
In addition, the finance organization and management accountants have built trust
within the organization – they have credibility.
Ethics also gives the accountants credibility and voice in the business.
People, process and “technology support the business
Management accountants have an important role in the area of technology –
when asked; the whole group said management accounting covers the area of
technology.
One stressed that this is especially true in smaller companies where the “finance
guy” has his fingers in every area of the business – finance, technology, HR, etc.
29
Question 5 How does Management Accounting contribute to data planning and does Fig 11 demonstrate it well?
Response How does management accounting contribute to data
Number
planning?
Does Figure 11 demonstrate this well?
3
The diagram illustrates that the management accountant is to go-to person
and that he/she will draw a specialists where necessary. Suggest showing a
range of specialists rather than just “data scientists needed
The diagram could perhaps be improved by showing a range of such specialists
rather than just “data scientists"
4
Yes but do management accountants need to develop as data scientists too?
8
The point of an illustration/figure is to clearly and succinctly impart knowledge,
figures 10-13 are completely the opposite, to suggest improvement would be to
imply that these figures can be improved by tweaking, when they basically need to
be scrapped.
12
Management Accounting contributes to data planning by helping to focus on
defining only what data is necessary to collect i.e. Asking the right questions,
assisting in refining the search criteria to ensure the quality of the data, and
ensuring the efficient and ethical use of the data.
68
It does demonstrate the contribution to data planning.
Would suggest that the diagram is flipped around (up and down) so that the
outcome of “The business” - “Impact” is at the top of the diagram and “The
business” – “Need for performance improvement” is at the bottom. I think this will
help visually show that the important outcome is the “Impact” to the business.
69
IT people/data scientists often don't have the required business and
accounting knowledge to fully understand how and why data gets summarised
and used for strategic business decision making. Their focus is on ensuring
that individual transactions are properly recorded, not on supporting business
decision making and strategic planning.
Figure 11 is ok - though it's not always about 'Big data'.
80
Management accounts can contribute the data planning feed as through the
emergence and the importance of 'big data' will have many of the KPI's to
drive the strategy and the plan. Be it with financial and non-financial data
84
88
Fig11 demonstrates the integrity of Management Accounting in overall
Performance management Cycle.
There is no mention of nothing on budget setting and forecasting
89
I do not like the figure at all.
90
Figure 11 doesn’t show much understanding of the organisational realities
management accountants find themselves in.
I would expect to see Figure 11 linked to Information Architecture, Data Modelling,
Data Warehousing and Business Intelligence Applications.
30
Response How does management accounting contribute to data
Number
planning?
Does Figure 11 demonstrate this well?
Management Accountants’ interest should be focused on the Business
Performance subject within those disciplines, ensuring that his/her stakeholders are
getting the right information ant the right time in the right place.
95
Glad to see the detail on data planning and data structure. An addition to the
diagram would be something to represent the importance of management
accountants setting the business logic for reporting and analysis coming from
the data teams. It’s not just questioning the logic that already exists.
There are many ways to define important drivers of the business
(consumers/customers themselves, consumer actions with products that drive
revenue) and it is important for the management accountant to be at the table
at the creation of those metrics in the business, not just later on. They cannot
assume the data is already set up correctly.
96
In the detailed section on Data Preparation you address the rigour of
preparation. The section would be improved by a good discussion on the role
of judgments. In the modern firm with multi-functionality and flexible
organisation and work practices, the ratio of apportioned to allocated costs
seems to be rising. Application of judgment in discussing and "allocating"
these costs for business decision making processes is a real challenge. This
area represents a gap in your coverage.
97
102
This diagram is good
The emphasis suggested in Fig. 11 is that of a scientific-methodology’. Such
a methodology may be relevant to historical information and some future data,
but it essentially excludes the subjective “commercial insights” of
understanding trends in society arising from Government actions, consumer
changes, technological developments etc.
The Management Accountants could contribute but all information sources,
opinions and insights must be considered/utilized.
The section on “organisation’s technology” is missing the task which is vital to
management accounting in its role in managing a business model.
105
The management accountant may be involved in process/systems
improvement to create the data sets needed to generate the information for
decision making
106
Data planning is the most important from all the fields, if we do not classify
data properly can we ever analyse, control, budget or forecast for the future.
109
111
Figure 11 demonstrates it well and certainly compliments Figure 10.
I am not convinced that the introduction of a data scientist as a prerequisite,
explicitly or implicitly, for data analysis is useful. We should excel at analysis
and a key part of this is the ability to understand the sources, content and
relevance of data. This is an enabler for building meaningful analysis and
31
Response How does management accounting contribute to data
Number
planning?
Does Figure 11 demonstrate this well?
scenario planning. There is too much reference to data and not enough to
information. They are very different.
112
Yes. By identifying what is the most appropriate data to gather and analyse in
the pursuit management of informed decision making.
114
Data structure should make reference to data science, analytics and crowd
sourcing
115
Management accounting contributes to data planning by reviewing and
evaluating data collected at first hand, refining and presenting them in credible
form for better decision-making to be made by organisations.
The primary concern here is the role of organisations in measuring current
data to evaluate future plans before implementation and this is where
management accounting plays a crucial role in focusing on input data to help
assess future performance outcomes.
116
Management accounting is very important in the insight associated with data
analysis and planning. Data scientists can build hypotheses based on the data
that is provided, but it's up to the accountant to own the data and know its
impact to the organization. I think the biggest contribution relates to the
identification of the data necessary for all aspects of performance
measurement. In government, do you really have commercial insight? It is not
going to resonant with government community.
Figure 11 demonstrates a plausible link between the business, the role of the
management accountant and the possible involvement of a data scientist in the
process of data planning. This is found to be reflective of the case in practice. The
definition and role of a data scientist is not provided in the draft document.
The figure makes sense but unclear who is a "data scientist" and what are his/her
qualifications?
“The business” should be replaced with organization
What other word could be used instead of “commercial impact”? Operational
Impact?
118
Yes
119
Management accounting helps to form understanding of necessary analytics
and define the cycle and ways of data collecting.
120
Figure 11 demonstrates the contribution of the management accountant
This should be represented not by separate blocks but rather by a cycle, because
collecting relevant information is an activity that needs to be performed constantly
(be it just for the sake of always having recent data for analysis).
In the figure 11 it is shown that this process is initiated by the need of improvement
as if it was a recurring event rather than an ongoing process essential to effective
management. That’s why this element can be removed from the diagram, providing
it is then added to the list of accounting management principles.
126
130
The diagram is very clear. It helps to plan, collect and process the data as well as
define the cycle and ways of data collecting. Though it is advisable to add providing
analysis-based recommendations on business improvement as a separate block.
Not clear.
We find Fig 11 rather complicated; It needs to be simplified. Non-financial data
32
Response How does management accounting contribute to data
Number
planning?
Does Figure 11 demonstrate this well?
could also be specified on the diagram
133
Management accountants have an important role to play in data planning and
data structures since these are often the bedrock for the decision support
required by managers. As handlers and users of data management
accountants often have a clearer idea of how these tasks and activities can be
performed than the business managers whom they serve, whose priority is
having the information to hand to make decisions and less concern with how it
is obtained and collated. The management accountant plays a role in
understanding and anticipating the information need of decision makers and
translating those requirements into systems and processes to deliver them.
135
Data planning in my view is fundamentally linked with the first principle.
Figure 11 describes a role of data analysis rather than the role the management
accountant plays in information strategy, i.e. helping to determine the information
that the business needs to operate, or is required to report to stakeholders, and the
design of data systems and process to deliver it.
The second principle of mapping data and information flows on to the value
creation model. This allows us to collect data on the business model and the
environment in which the business model operates.
The third principle is very relevant in the kind of data that will need to be
gathered. The decision frameworks can be around operational management
as well as strategic management. Operational Management data mainly
involves business model specific data while Strategic Management data
generally involves collecting information on the environment which could
potentially impact the operating business model.
138
Besides the fact that management accounting provides relevant data, trends,
calculations etc, I think the most important feature is the ability to
communicate between financial and non-financial stakeholders thus creating a
common platform for understanding complex business matters and decision
making without the necessity for all parties to be experts in finance.
There should be “data planning” box.
139
140
In my opinion the outputs from a data system form the basic inputs to a
management accounting system. It is therefore a pre-requisite that
management accountants play a key role in the data planning function.
141
“Data planning is the sourcing, assembling, refining, and presenting of data
needed to evaluate and prioritize plan options, set targets, predict outcomes
and measure the execution of plans.”
Figure 11 demonstrates this contribution well.
Management accounting contributes in data planning by combining the
knowledge from different departments of an organization which gives proper
understanding of the business.
Management accountants make use of past, present and mainly future
information. Their role is to:
- Collect the assumptions from operational managers
- Verify the data in context of forecasts of changes in economic, political,
33
Response How does management accounting contribute to data
Number
planning?
Does Figure 11 demonstrate this well?
social and technological environment as well as commercial conditions (what
is worth to mention is that a very significant part of management accounts
comprises of non-monetary measures (comments, advise etc.)
- Comparison and contrasting the assumptions with past and actual
performance to understand how the performance is going to change and to
what extent.
- Presentation of predicted outcomes, identified risks
144
Particularly like the separation of data scientists from the management accountants
in Fig 11. There seems to be a perception within our organisation that accountants
are data miners!
147
I would add here predictive insights for management accountants. For the
business - new business opportunities. Systems seem to be missing here.
They can be either good or bad systems but they play a crucial role how
effectively and timely this cycle works.
149
Data planning is a useful addition to the performance management cycle, and
becoming increasingly important in day-to-day management accounting.
150
153
Figure 11 generally represents this well, although experience suggests that the flow
from right to left of the diagram (i.e. from 'hidden insight' identified during
'discovery') is as important as planned analysis focused on identified performance
improvement requirements.
Figure 11 does portray an internalized view, narrowing the scope of Management
Accounting.
- Triggers information needs
- Guides on information relevance
- Compares data sources and identifies inconsistencies
- Provides out of box view on data trends
154
A “need of performance improvement” may be noticed by a management
accountant. The term “data scientists” must be fully explained or replaced by
other expression
Figure 11 is a bit unclear. It fails to explain the responsibilities of management
accountants and data scientists and does not include managers.
It must be defined which of the skills of data scientists management
accountants should have. “Handing over” the tasks such as analysis, building
hypothesis or quality control to data scientists may diminish the relevance of
management accountants.
34
Question 6 & 7 Do the 12 core practice areas cover the main elements of your finance function? Are there other areas
which should be covered? Do you agree with the way in which GMAPs are applied to the core practice areas? Does it work
or do you think it is too prescriptive? Please comment on the sufficiency and understandability of the application of the
three Principles to each Practice Area.
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
1
Regarding the 12 core areas, I think they should map to the strategic
monitoring process in figure 13 i.e. the heading of practice areas would map
to the strategy, plan execute and review cycle
3
The practice areas are not very well explained as a concept. Are they meant
to be the elements of a finance function? Certainly it would be wrong to imply
that management accounting includes all of these areas.
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
These are OK as illustrations but in practice the application will vary between
organisations.
My finance function includes Tax Compliance as well as Tax Planning. It
also includes Investor Relations and Internal Audit and responsibility for
purchased services in finance areas such as External Audit, Defence,
Broking, Corporate Advisory, Insurance, etc.
4
Yes but include system design and implementation too.
7
Are we trying to take over all functions of accounting including those areas
traditionally reserved for FA (eg: tax, treasury, regulatory). Why?
Yes
I’m concerned that revenue growth is only touched on in pricing and product
decisions. What about market segment issues, value chain etc?
8
I think budgeting, as defined in this document is somewhat limited when
many companies are interested more in rolling/evolving forecasts, an area
particularly important in businesses experience rapid change, growth,
decline, re focusing products.
I would suggest that budgeting be subsumed into a planning/core
performance group that includes forecasting and regular reporting against
suitable comparatives (prior year, budget, forecast). Defined time plans can
become out of date quickly.
A useful list of things to think about but in no way should the lists given be treated as
a prescriptive baseline we should be working to.
Overall don’t make these mandatory or prescriptive - they are good thinking points
and should be considered and applied to the strategic intent of the organisation.
These applications are a useful insight into what may be relevant to a specific
organisation and provide useful discussion points, although there are over
simplification errors
Financial controls are strongly linked to risk management and compliance.
Is Project management really a core practice area? It is heavily linked to
planning/performance and/or investment appraisal.
Different business sectors, ownership models, maturity of businesses and
the like will all affect what is necessary and desirable. With respect to
35
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
pricing and product and the modelling of value creation, it is not always the
desired plan to match price changes to perceived value nor are
product/service changes always focused on the retention and attraction of
just any customer – new products are always an opportunity to increase
prices !? No, new products are part of a strategy that may or may not
involve price changes.
12
Mostly
These are good
68
I would have expected a practice area on “contribution and margin
management”. This is the activity of understanding and communicating
drivers of change in actual and planned contribution and margin
performance. This important practice has not been adequately covered in
the current practice areas described in the draft.
The application of the three Principles to each practice area effectively shows the
usability of the Principles.
Also, I suggest that the activity of “Strategic business and financial planning”
should be more adequately covered. It is different from budgeting and
involves combining aspects of other core practices; investment appraisal,
resource allocation and risk management.
69
Comments on definitions of Practice Areas :
External Reporting - May sometimes also include forecasts and projections;
Financial Controls - Second sentence sounds more like 'resource allocation'
rather than 'financial controls';
71
Listed four additional / alternative practice areas - valuation, product costing,
people development, ethics
80
Business Partnering is missing - is this a practice area or an enabler?
Analytics - should be applied to and implicit within all of the practice areas;
Cost transformation - I would question the link between the value and the
practice area with respect to 'right first time' as I think this could be equally
applied against a number of the practices;
Budgeting - this may only apply to companies listed but the importance of
budgeting provides guidance to the business to see how it's expected results
will influence external messaging with investors etc. Would also suggest
calling it budgeting / planning as it would suggest a longer time horizon
83
Add Business partnering and shared services - these activities are much
more significant and prevalent than strategic tax for management
accountants in the real world of business.
Why are we including Tax and excluding the significant activities that
36
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
management accountants actually do?
What is the CFO is responsible for? This should be included.
84
Yes, this is quite exhaustive and it covers almost all the core areas.
88
Payroll and establishment control, Transaction processing, debtors,
creditors, grants
90
No. Treasury Management and Strategic Tax Management are included in
the cycle but Internal Audit is excluded. Some explanation of what the
interface and role is with Internal Audit will be helpful in guiding Management
Accountants asked to participate in cross functional workgroups with Internal
Audit on issues like Information Assurance and Security, Data Quality etc
92
The three Principles have been explained quite in detail for each of the practice area.
It is practical and self explanatory.
It is not intended to be prescriptive. Perhaps the wording could be tweaked to make it
clear that it is not meant to be prescriptive but tailored.
I found it hard to read. Again more on examples of tailoring more diagrams more
white space would all help.
The list of practice areas and its alphabetical order (which neither mirrors the
order of the “finance map” nor has any other meaning) appears rather
random. It might be useful to group them in a more meaningful way.
Also, the list is probably incomplete: “Budgeting” is only one activity in a
process group that includes Budgeting, (operational/strategic) Planning and
Forecasting. Also “Price and product decisions” are only a subset of a much
broader set of operational, tactical and strategic decisions that MAs can and
should be involved in. While “Financial Controls” are mentioned, “NonFinancial Controls” are being ignored. Other practice areas, such as
“External Reporting” and “Treasury and Cash Management” are not
immediately recognized as MA relevant.
The “Definitions” of the Practice Areas need to be thoroughly reviewed and
compared to the definitions used in the literature. Some of the definitions
include terms such as “lean” which have a clearly defined meaning within a
certain context which does not fit the present use.
Considering the purpose of the GMAP, it might be more relevant to define
the practice areas in relation to their role and importance for the GMAP. The
“Value of the [Practice Areas] to the Organization” is very much dependent
on the how they are being performed. For example, a budget is only useful if
done right and employed correctly (Btw: A budget does not (primarily)
“provide a detailed analysis of how the organization intends to consume
resources”.
Therefore it would be useful to describe what makes for a best practice
planning process (and what does not) – the same applies to all of the
Practice Areas. Similarly, the “Contribution of the Management Accountant
to Practice Area” needs to be reviewed, particularly when considering the
positioning of the MA at the heart of the business. Also, and this has been
37
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
mentioned before, the language – such as “Contribution of the MA” - puts us
MAs into a rather passive role.
95
I feel that Resource Allocation and Budgets are the same practice – can
these be merged? Can Tax, Treasury and Cash be merged as specialist
areas of financial value creation?
Yes, our plans, forecasts and analysis on the business go directly into board reviews.
Yes, with the challenge being to support business leaders to earn their trust, while
maintaining a healthy challenge to their views to improve them
In terms of additions, my thoughts would be Forecast and Analytical Science
– bringing machine learning and other data tools to the measurement of the
business performance and future investments / product decisions. More
mention of Revenue and Growth – I think it should be mentioned more within
these practices IT application strategy – whether data mining for analysis or
building out applications for FP&A, a core practice should be the best
practice knowledge and application of tools. Visualization and
Communication – building on the Principle of communicating with impact,
should there not be a core practice that challenges management
accountants to push the boundaries on design in dashboards, reports, plans,
presentations
97
Again overall I think the practice areas are good, although I do think there
are a couple of areas missing:
Budgeting - make clear this applies over multiple time horizons albeit with
different approaches for a short term operating/tactical budget versus a
longer term strategic plan.
Cost management - I'd add something regarding taking a holistic approach
to managing costs so the whole is optimised even if that means sub-parts of
the enterprise aren't as efficient as they could be. In addition, I'd include
something around life cycle costing, as again this is about maximising cost
efficiency over time rather than in a single time period.
Investment appraisal - I'd like to see more on ensuring key variables or
suitable proxies for them are factored into appraisals, estimating the
probabilities of key variables and the calculation of a range of possible
outcomes over time (cf., sensitivity analysis).
Price - although implied I'd like to see 'discount management' explicitly
referenced.
Resource allocation - this should be expanded to cover resource allocation
decision making in both the short operating/tactical term as well as in the
longer strategic term. Furthermore, there should be something on str
, which of course could change over
time as circumstances and stakeholder expectations/requirements change.
Risk management - this needs to have 'opportunity and innovation' more
38
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
explicitly tied into it, as jus
I'd either
add these as separate practice areas or expand the existing to explicitly
cover them: Strategic procurement and the importanc
at a specific point in time.
Stakeholder management and particularly the stakeholders in the local
communities in which the enterprise operates.
99
The section on Risk Management is very thorough and I would only add two
comments from my experience.
Firstly, Internal control should be separate from Risk Management. Business
Managers view the two activities in a very different light. They have a view
that internal auditors are there to catch them out and Risk Managers are
there to help them identify risks.
Secondly, I do not agree that it is the role of the Risk Manager to identify
risk, rather that they help through facilitation for the line manager to identify
risk. More ownership of the actions required than results.
102
a. The above list falls in to the trap of believing that ‘Management
Accounting’ is about what Management Accountants do! In my opinion, only
Budgeting in the above list forms part of the ‘Management Accounting
function’ – as distinct from a Department within the Finance & Accounting
‘group’ entitled say, Management Accounting. That is not to say that the
“typical” qualified CIMA member is not capable of handling such activities!
I do not accept the so-called “three Principles”
b. These ‘core practices’ relate essentially to a Finance & Accounting
function, and not just Management Accounting – but they are ‘situation
specific’. My duties as CFO (part of my total remit as Business Planning
Manager) also incorporated Company Secretarial, Finance & Administration
systems’ functionality requirements, Transfer Pricing documentation, and
perhaps an area which is traditionally related to management accounting,
namely Balance Sheet ‘fixed and current assets’ valuations which require
substantiation from future projections (such as asset lives, inventory usage,
etc.).
c. My instinct would be to publish the ‘core practices’ as a separate
document which would be referenced to by a “Principles” document, but
please temper the details so that certain skills are not seen as suggesting
that the Management Accountant is the only professional to hold skills such
as: ‘cost transformation and management’, ‘pricing and product decisions’,
‘resource allocation’, ‘regulatory adherence and compliance’ in general, ‘risk
management’; or that the ‘management accounting’ is either the most
important or only perspective – a common mistake with Investment
39
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
appraisals! d. I have deliberately avoided commenting on their contents.
This means neither agreement nor disagreement with the abridged
descriptions.
105
Data integrity and converting data to meaningful information is a major part
of the management accountants’ work.
106
Can one management accounting person do all of these core practice
areas? If yes, then we are cutting waste, otherwise we are introducing extra
levels that will make the organization incur extra cost. We forget the tender
process for the costs (this is an important part of the cost drivers).
I think it is too prescriptive.
Please add forecasting and variance analysis.
107
An assurance function seems to be missing, whether it be Internal Audit,
internal control or even HSE. I think I saw strategic financial management
inside Treasury, maybe deserves its own slot.
Slightly prescriptive
I am not sure how you see corporate governance in this model, particularly
for overseas subsidiaries, related companies and joint ventures
109
Yes, the 12 core practice areas cover the main elements of the finance
function of my organization. I do think that the core areas might create
confusion with the role of finance and internal audit functions.
Competence is essential in all of them, but for a manager to ensure that
there is great value for money, each and every management accountant
would be expected to execute or contribute to all functions. This could result
in encouraging pressure and strain on management accountants, and within
the context of Botswana – where we already experience such - it could be
worse for us. On the other end, I fully agree with the set of skills required and
expected, especially for SME businesses.
111
I agree with the application of the principles. I do not think they are too prescriptive,
but rather see them as guiding principles for not only keeping Management
Accountants accountable, but also enhancing their scope within an organisation.
This enables common understanding as opposed to general statements/clauses that
encourage different articulation within and outside the profession.
In Botswana, Internal Auditors, Financial Accountants, External Auditors and
Management Accountants are seen as the same or similar professions. The
application of the principles could reinforce the latter’s profession as adaptable. A
need for management accountants has not been created and this could highlight the
need for such a specific role in any organisation. There are large organisations and
there could be a detrimental assumption that one management accountant would be
capable of executing activities in all these core areas.
The core practice areas do cover the main areas of my finance function, but
they are a bit high level. More focus on forecasting and less on budgeting.
Budgets are static and do not reflect the current understanding of an
organisation, forecasts are key tools for determining management activity.
Internal reporting of actual performance vs planned should be a specific
practice area. This is probably the key requirement of management
accounting in most organisations since it drives operational and tactical
decisions.
112
To an experienced accountant with the advantage of working in a highly
educated and sophisticated economy, it is largely stating the obvious in great
Seems clear enough to me.
40
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
detail. However, to aspiring managers without ready bench marks in a
developing country, the document provides an aspirational framework to
work towards and a useful information tool to inform senior management of
the importance and value of management accounting.
113
In addition to the 12 practice areas, I would like to add 'Negotiation' as an
additional area. This is becoming an important profit lever in both
procurement and sale. Considerable proportion of the value-add of an
organization's product / service is done by vendors and hence negotiating
the right procurement price and payment terms has a favourable impact on
profit and cash flow. Similarly negotiating the best price from customer
based on the cost to serve of the customer segment and finalizing the right
volume discount policy has a favourable impact on realization and profit. And
finally announcing the right cash discount schemes for the customer has a
favourable impact on cash flow. Management Accountants can play an
important role in all the above areas by being a part of the negotiation
committee and ensuring that the process is data-driven and not emotion /
sentiment-driven.
The additional scope of application of principles can be considered in the
practice areas given below:
Budgeting - The area of profit modelling can be included. The management
accountant should arrive at a profit model for the division / company which
incorporates the relationships between revenues, costs and profits. This
should form the basis for arriving at the forecast P&L of a division / company.
External Reporting - This practice area can be renamed simply as
'Reporting' to include both external and internal reporting. The role of
management accountant in reporting to investors and regulatory bodies can
form part of external reporting and the role in reporting to top management
and the board of directors can form part of internal reporting.
Financial Controls - Management Accountants should also play an important
role in defining the internal controls in various areas in organisation- revenue
recognition, resource consumption and accounting, asset acquisition and
disposal, liability recognition and extinguishment including the definition of
approval limits for various levels of management in the organization.
Price and product decisions - Management Accountants can use Activity
Based Costing (ABC) and Activity Based Management (ABM) techniques in
informing top management on products /services to produce and sell /
discontinue and also in determining the selling prices of products / services.
114
It looks as though some of the practice areas are included for completeness
rather than being included in the role of the management information
41
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
professional. The starting point should be “what it is the management
information professional” within an organisation. Also planning and
forecasting are more appropriate than “budgeting”.
Financial controls are really the more relevant to a “financial accountant”.
Price and product decisions should be “economic decision making”. Should
include “strategic financial management”.
Strategic tax management is more relevant to the role of a tax professional.
There should be reference to “risk mitigation”. Strategic tax management (if it
is to be included) should refer to cash tax.
Treasury and cash management is more the role of the treasury
professional. There should also be reference to strategic financial
management including balance street structure, cost of capital, dividend and
buyback decisions.
115
As mentioned above, the 12 practice areas are very complete and
comprehensive and cover the main elements of my finance function.
However, the degree or extent of application of these areas is not in equal
proportion so that more emphasis is given to certain areas at the expense of
others. Again, as mentioned above, Systems design and control or
Information technology management, and Internal audit and controls are the
two (2) major ones identified so far. Less significant ones include Corporate
responsibility and Sustainability management which may be classified under
‘Project management’.
The three Principles are applied correctly to the 12 core practice areas. The
application seems appropriate on paper; however, the management
accountant should exercise caution, judgement and logic in their application
in consideration of the situation in place. There may, occasionally, be a
need to deviate from the Principles if such an act produces better outcomes
and results than would otherwise be the case. Unlike financial accounting
which is objective, static and prescriptive, management accounting tends to
be subjective, open-ended and unstructured. Although the three Principles
may sound a little prescriptive, they are designed to be applied and used
only as a basis by the management accountant with an inquiring mind and
subjective approach, having given sufficient weight and consideration with
regard to its practicality, suitability and appropriateness.
The extent of application of the Principles to various organisations may differ
depending on the industry/sector, geographical location and size of operation.
The eventual outcome or effect of applying the guiding Principles may have a
different or unexpected impact on the way managers run a business.
These Principles are merely guidelines and not laws; they are subject to personal
interpretation and cultural influence from those applying them in running the
organisation.
Also, the choice of practice areas to focus and selection of tools and techniques to
be applied is highly judgemental on the part of those implementing the Principles.
The degree of adherence, level of understanding of the Principles and approaches to
execution all contribute to the success or failure of achieving organisational success.
My comments on the ‘sufficiency’ of the application of the three Principles to each
practice area are as follows: - Generally, there is a tendency to describe more on the
three Principles to practice areas that are more established and familiar to the
writers, such as ‘Investment appraisal’ and ‘Risk management’ but less so in discrete
and subjective areas such as ‘Financial control’ and ‘Project management’ there is
no benchmark to gauge which practice area should be written more on a particular
Principle, as long as what was written is enough to provide the reader with sufficient
knowledge
There is also a lack of suggestion as to what management accounting tools and
techniques deem necessary and suitable for application to resolve an issue in a
given situation
It may also be useful to list down examples for each of the 12 practice areas to
provide a more comprehensive understanding to users of this document. To avoid
42
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
criticism and to go in line with other international professional accountancy bodies, it
is strongly advised to include Internal audit and control as one of the 12 practice
areas in the performance management cycle.
116
Could Budgeting and Resource Allocation be combined? They almost seem
one in the same. One should be a subset of the other. For Financial controls,
consider changing the wording for "correctly" and "accurately" because these
controls are meant to provide reasonable not absolute assurance. However,
if these words continue to be used, consider including "help" before the word
"ensure" on pp. 8 & 33 and wherever else applicable in the Consultation
Draft.
Should the core practice areas include "Internal Control"? The development,
implementation, and assessment of Internal Controls? Is Internal control part
of Financial Controls? The areas that I am familiar with seem to work very
well. In the areas that I am not exposed to within my organization, it could
seem to prescriptive.
Clear and logical.
Modelling value creation seems to be the most difficult component to incorporate in
to each of the practice areas. For example, the external reporting area and
regulatory adherence and compliance area seem to have a difficult time
incorporating a model. Initially I was unsure how certain practice areas (i.e. project
management) fit within the three Principles, however, I think pages 30-43 of the
guide did an excellent job providing clarity in demonstrating the relevance. Liked the
overall set up of this section of the document.
Very well written and quite thorough. Well organized. It comes across as very
professional and explicit. If needed to be calibrated it can be done in the course of
time.
Price and product decisions, Strategic tax management, mad Treasury and
cash management, as described, are not generally relevant in the
government sector. Consider revising to include concepts for these
principles that would be relevant. ‘Price and product’ - these kinds of
concepts are business oriented. The definition discusses selling price.
Governments don’t identify with that. Tax management is described for
business. Are we saying that all organizations will have all 12? Maybe it is
okay if you don’t have something for all of them.
There needs to be a glossary. Business should be “entity or organization”.
More areas like cost accounting and cost audit are critical. Further some key
areas like dividend policy decisions and project financing
118
Suggested additions: Adjustment of business-model in the context of macro
and micro environment to ensure financial advantage of the company
119
Yes.
120
No new areas should be included, but one that could be removed is
‘Financial Controls’ because it is already included in Treasury and Cash
Management (Control is one of the functions of management).
Consider removing the practice area 9 (Resource Allocation) because
resource allocation based on the organization’s strategic objectives is a part
of budgeting, which is designated as the practice area 1 (Budgeting). This
would allow avoiding confusion regarding the meaning of each of the
practice areas because each area represents a commonly known term, and
splitting such whole elements into parts would just raise unnecessary
In my opinion, the Global Management Accounting Principles are applied correctly
and they do indeed work even though it is just a set of formal rules. However, this is
not bad because exact and consistent execution of a set of formal rules can be the
very basis for building an effective management accounting function. Moreover, the
generality of the principles’ definition makes them universally implementable thus
justifying the very development of such standards.
43
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
questions.
121
Budgeting should be enhanced to read “Budgeting and Forecasting”.
This is because in every set of management accounts I have witnessed in
the last twenty years or so have required future periods to be input as the
latest forecast with a 'Bridge' included in the management accounts pack
that explains the variances from budget and previous forecast.
There is also a process in place in many companies for 'Rolling Forecasts'
on a quarterly basis. This does not necessarily replace the Budget for the
calendar year reporting to shareholders but it adds a dimension that
management and stakeholders need to understand.
In this connection Cash Flow, Capex, and Working Capital changes are
more visible on a regular basis for review.
122
The majority of these core areas of practice would certainly resonate with the
day-to-day activities of professionals working across BIS and its Partner
organisations.
However, there will be some areas of practice where public sector members
will have specific perspectives to bring, recognising that public sector
organisations are subject to complex and high standards in proper conduct
and use of public money. For example, pricing decisions in Government
involve consideration and understanding of State Aid regulations. Also
strategic tax planning is an area where Government must take great care not
to encourage or facilitate tax avoidance. Whilst I recognise that a
comprehensive set of core practice areas should include these to be relevant
to the majority of members, it may be valuable to recognise this in the
consultation and final document.
124
It appears that the definition of Budgeting (Page 28) is relatively narrow and
limited. We suggest adding some key elements and features of budgeting
and forecasting to reflect and emphasize the “dynamic nature, rolling
forecast and comprehensiveness of budgeting management”
125
The following practice area can be shown separately:
New product / market alternatives evaluation including assessing of
acquisition / merger option as a quick solution.
126
I think it is necessary to give remarks to some areas. E.g. we need to take
into account the size of business and regional aspect when we talk about
Risk Management (#10).
127
- There is a lot of valuable guidance and direction provided on Budgets.
44
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
- There is no mention of managing the core transaction processes –
i.e. Order-to-Cash and Purchase-to-Pay. Essential and nearly always the
responsibility of Finance, even if via an outsourced operation or a shared
service centre.
- Investment Appraisal should refer to the organisation’s strategic goals
and assure there is a clear understanding of each project;
should make some reference to situations where a whole series of
proposals are considered alongside and have to be prioritised; and refer to
decisions to invest in new businesses, including acquisitions and/ or
joint ventures. Also decisions about divesting activities, whether via sale or
closure.
- Resource Allocation feels like it overlaps with Budgeting and Investment
Appraisal
- There could be some further useful detail about the type of roles in a typical
Finance function.
128
Yes, they cover the main elements of our finance function. Yes, one
important area would be Talent Development
129
In my work environment, management accounting has been involved in not
only strategy aspects but detail performance control. Apart from the fields
the principles have listed, I think management accounting contributes to
internal auditing as well. For example, they involved in inventory
management, including amount control, performing statistical analysis and
supervising procedure according to the relative regulations or rules. If there
are some errors, a report of requiring adjustment would be presented to
management team.
As a whole, management accounting have assisted in setting up system and
building procedure and program in production, pricing, inventory, and sales
management, coaching relative employees from financial management
respect, and conducting supervising, driving performance according to the
plan.
130
Missing: management control and reporting and Board Reporting
131
We should combine: “Regulatory adherence and compliance” and “Financial
control” - both address the same goal to reduce the risk of error and fraud
and the likelihood of financial loss. However the first perceive it from the
point of internal stakeholders and the latter - from the point of external
stakeholders.
“Risk management” - in my opinion should be redefined. Management
Currently the application is too general. Having practical problems I would like to
have some practical guidance. In my opinion we should prepare a separate set of
applications for different industries, such as banking, production, commerce, real
estate, mining, ship-building.
Additionally I have some detailed remarks addressed to some of the practices:
• Budgeting: Only Driver-based budgets mentioned. But in reality we have plenty of
45
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
accounting (as it was defined) is focus on understanding financial and nonfinancial data and translating them into valuable information. I suggest
rewriting the definition into “The process of understanding, measuring and
proper reporting of risks that the organization is exposed to in attempting to
achieve its corporate objectives.”
notional costs that are contractual based and have very low, or no direct connection
to drivers. I agree that we should aim to have all costs driven by sales; however in
many cases, it is just impractical or even too costly. It should be also mention other
budgetary techniques; like-for-like comparisons between departments - in my
opinion it is wishful thinking, take the Sales Department and Accounting Department
(completely two different worlds);
I think that managing and controlling the risks are processes under
supervisions of CEO or specialized entities of each organization. The CFO
role should be rather proper presentation of the risk in the financial
statements and management reporting.
In my opinion “Project management” should not be included as one of core
practice areas. Project management is well described by other
methodologies (Prince2, PMI, other) and it is rather CEO role to ensure that
projects are executed under well-defined methodology and process however CFO should took active part in any of the project by taking care of
proper “Investment appraisal” practice.
I would add “Forecasting” as a separate practice. We should differentiate
budgeting from forecasting. The first should tell us how much we should earn
and how much we may spent to achieve expected result - budgeting is a
mechanism to translate business plan into figures. The latter tells us where
we are during operational period in regards expected execution of approved
plan (compare to budget). However, considering the informational and value
creation role and given the forward looking nature of management
accounting, the practice areas to which MA principles apply should go
beyond the traditional role of finance and maybe enhanced by the addition of
a practice area that would provide an assessment of 'business value'.
• Cost transformation and management: Cost drivers are known and recorded - as I
mentioned above - that is a wishful thinking. Additionally given examples may
indicate that the author does not feel the subject of costs’ drivers. On the other hand
the cost drivers are a whole one subject that I suggest to treat as a separate
practice.
• External reporting: In my opinion, it should be included in the definition of this
principle with additional suggestions of how to use each communication media
channel.
It is equally important that the issue of MA principles (and the proposed diagnostic
tool), is followed up by the issue of 'Management Accounting Guidelines', which
would serve as best practice on topics that are of relevance to Management
Accountants worldwide and on key MA techniques (e.g. budgeting, ABC analysis,
strategic scorecard etc). This would contribute to enhancing the practical application
of management accounting, while also serving as a 'tool kit' for use by management
accountants.
However, considering the informational and value creation role and given the forward
looking nature of management accounting, the practice areas to which MA principles
apply should go beyond the traditional role of finance and maybe enhanced by the
addition of a practice area that would provide an assessment of 'business value'.
132
The 12 core practice areas cover the typical finance function mapped in
terms of the performance management cycle.
It is noted that the MA principles would be accompanied by a diagnostic tool that
would enable companies to benchmark the quality of its management accounting
function. Availability of practical application guidance in the form of MA Guidelines
would be important to realize the full value of the MA principles, and will also help
organizations to realize the potential of management accounting to contribute to
improved performance.
133
Considering the informational and value creation role and given the forward
looking nature of management accounting, the practice areas to which MA
principles apply should go beyond the traditional role of finance and maybe
enhanced by the addition of a practice area that would provide an
assessment of 'business value'.
These are comprehensive and understandable. They are a useful tool to provoke
discussion as to whether the management accounting function performs these tasks
to the right quality, frequency and cost. A useful checklist, which provides the layer of
detail that begins to “ground truth” the principles in operational activities.
The 12 core practice areas start to move the reader away from management
accounting to the wider role of the finance function in general. While the
46
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
consultation document elaborates on the management accountant’s role in
respect of each of the 12 core practice areas, which is useful, tax is one area
where the management accountant is likely only to have knowledge of the
principles rather than the detail. The contribution of the management
accountant to many tax issues will be the awareness to seek specialist
advice. Indeed the CIMA syllabus covers tax to a far lesser degree than
other accountancy institutes.
The descriptions of the contribution are not too prescriptive, especially if
used as a road map or framework. It is clearly a useful tool to (self) assess
capability and competency of management accountants and help identify
training and development or CPD requirements
134
The GMAP does not seem to draw on CIMA funded management
accounting research that highlights the difficulties of establishing rigorous
evidence for the effectiveness of particular accounting practices. This
problem is exacerbated when trying to generalise across different countries,
different industry sectors and organisations of varying size.
Again in our report on the finance function we emphasise that finance
activities have to be tailored to the needs of the organisation and the
business environment. In particular, start-ups and smaller entities may find it
impractical, costly and counterproductive to implement the long lists of
practices in section five, some of which have the potential to create unhelpful
bureaucracy.
The CDGMAP do mention the need to adapt and refine tools and techniques
(P1) and state that the practices ‘are not intended to be prescriptive or
exhaustive’ (P27). However, given the level of detail and prescriptiveness in
the practices themselves these points could get lost. Moreover the
acknowledged lack of comprehensiveness leads us to question how the
practices in section five should be used and what evidence supports the
privileging of certain practices over others. How do the practices discussed
help people weigh up the pros and cons of different approaches if they are
not comprehensive? To mention just two of many examples why is
budgeting (practice one) preferred to ‘beyond budgeting’ and rolling
forecasts; why do detailed practices such as ‘resource maps’ and ‘risk
registers’ (see practices nine and ten) warrant a mention yet balanced
scorecards and competitor analysis do not?
While the CDGMAP do refer to forecasting and future oriented processes,
we believe the forward looking nature of finance practices needs to receive
greater emphasis. It should also be noted that the continued development of
innovative practices will make it difficult for the detailed advice in section five
to keep pace.
47
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
135
The answer is probably “Yes they do”. But the more important question is
whether all these functions are the core functions for Management
Accountants or are we trying to be everything to everyone and as a result
not adequately differentiating ourselves from the other accountants and
finance managers?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
Practice areas such as External Reporting and Regulatory adherence and
compliance are usually more fundamental to the practice of Chartered
Accountants. The general purpose reporting and regulatory requirements do
not require the adherence to the principles of management accounting
enunciated earlier:
• Modelling value creation
• Mapping data and information flows to the value creation model - using a
combination of accounting, operational and strategic information
• Communicating or providing information on the value creation model in
terms of decision frameworks.
My approach to building the practice area of Management Accounting would
involve:
1) Understanding and optimising business models (operational performance
management)
2) Transforming business models (strategic performance management)
Operational Performance Management refers to being able to perform the
following functions in the context of a steady state business model to
improve its efficiency:
1) Pricing and Product Decisions
2) Measuring Productivity and Costing
3) Investment appraisal
4) Commercial Management
5) Budgeting
6) Risk Management
7) Cash Management
Strategic Performance Management refers to the area of practice around
mapping of data and information surrounding the environment in which the
business model is operating. It involves translating the external and internal
48
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
data into strategic management frameworks.
a) For example in the field of strategic marketing management providing
information for developing marketing strategies using Ansoff’s Matrix or
Porter’s 5 Forces model.
b) Or in the field of Strategic Financial Management understanding the Life
Cycle of a Product and Cash Flows and financial management issues
surrounding the same. CIMA Material on Strategic Financial Management
has some excellent guidance in this regard.
c) Or in the field of Strategic Information Management providing information
to take decisions around this major strategic spend area.
d) Providing information around major transformational projects intended to
change the way we do business and linking strategy with operations.
136
A number of other practice areas 9 should be added or integrated with the
existing core practice areas e.g. “internal reporting”, “business partnering”,
“transaction processing”, “procurement”, “purchase and sales invoicing”,
“investigations” for example into fraud, and “cost over-runs on contracts”. In
addition, we recommend that the existing practice areas are expanded and
emphasised for example, the definition of “financial controls” should clarify
the purpose of controls and include some consideration of monitoring;
“budgeting” should include forecasting/rolling forecasts; “risk management”
should include escalation and contingency planning; “investment appraisal”
and “price and product decisions” should include modelling and strategic tax
management should include (financial) strategy.
138
The principles form a framework that can be applied in virtually all areas of
management accounting (and not only); naturally each particular activity
needs further clarification of what exactly they mean in a given context and
that is provided. I would only reiterate on the need for learning principle as
mentioned above
140
The 12 practices described are very comprehensive. My only comment is
that in many organisations the traditional budgeting process has been
replaced by more dynamic rolling forecasts. Also budgets usually relate to
just one year, whereas most organisations require 3 or 5 year forecasts. The
preparation of both short-term operating forecasts and medium to long term
strategic forecasts are also key practices for management accountants
141
The practice areas presented seem not to cover an important element of
finance function – internal reporting which is information presented to board
of directors (it would it better to put this point here rather than in “External
reporting”), senior management and operational managers in the context of
We find the proposed application well explained, covering all fundamental roles of
management accounting in practice areas.
49
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
planned targets. This area by its definition should cover all the sensible data
which for obvious reasons are not presented externally.
The other practice area which we suggest to add is “Motivating” –
Management accounting motivates by adopting the participative approach to
budgeting and achieved results. It assists in the process of Management by
Objective – where individual goals are integrated with the corporate plan.
Management accountant can also motivate individual performance by
regularly producing performance reports. The attitude to work of individuals
makes great contribution to success. We have following remarks to the core
practice areas:
- External reporting: We have found little attention paid to the standardisation
of reported data within large capital groups. Different cultures, habits,
accounting systems could reduce the quality of the information or extend the
time for delivery of expected data.
- Financial controls: We see the potential to put more emphasis on nonfinancial information obtained from managerial reporting systems.
Quantitative indicators and business comments could be equal or even more
useful than pure numerical data expressed in value terms.
- Pricing and Product decisions: We noticed that in this area management
accounting (or more broadly Finance) is responsible for making pricing
decisions. We believe that management accounting is capable to provide
appropriate tools and analysis to support pricing decisions. In our opinion
final pricing decisions shall be therefore treated as the responsibility of the
business.
- Regulatory adherence and compliance: This area is described wider than it
is expected of finance function. The organization maintains and documents
legislative and regulatory requirements for all markets it operates in,
including penalties for non-compliance and compliance deadlines.
- Strategic tax management: This area is described wider than it is expected
of finance function. The principal types of taxation the organization is
exposed to in each of the jurisdictions in which it operates are known. The
regulatory frameworks of the taxing authorities in those markets are
understood and documented.
142
We agree with the core practice areas.
The application of the principles is what will determine whether they will have an
impact or not. It is perhaps critical to sustain the momentum of MAP going forward.
We suggest that CIMA considers summarizing these principles into a pocket booklet
that can be made available as an e-book, an app or any other affordable means of
distributing content. We make this recommendation with the appreciation that not all
management accountants are formally trained in the discipline of management
50
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
accounting.
143
Avoid ‘alphabetical order. Consider routine versus non-routine. The
definitions are useless. If people do know what it is, the definition isn’t
needed. If they don’t know, the definition isn’t helpful; it would shed no light
on the matter to those unfamiliar with it.
144
Generally yes although I miss a final all-encompassing role of management
accountants "knowing how it all fits together". I think this is the greatest step
in competence of management accountants in moving beyond simply the
"number cruncher". The management accountant is skilled to provide an
oversight of the entire organisation as we also have awareness of many
other functions through the training.
145
These are the main elements of our finance sections. There is an element
that we are increasingly becoming involved in - that I could not find on pg 2829. (This may have been covered in the table and I may have missed it - if
so, apologies). We are playing a bigger role in ensuring that the
organisation has timely access to financial resources by working with the
respective programme teams to provide support for identifying and
generating sources of income/resources and ensure this will adequately fund
our investment plans and internal resource allocations.
146
The 12 principles do broadly reflect the elements of finance for me and I
don't believe they are too prescriptive. I had some comments:
Very useful, thorough and comprehensive. This is something I would be able to
apply as a framework within my organisation and I think this will help to get a feeling
for where an organisation is in terms of management accounting maturity (e.g. if an
organisation is primarily involved in 'preparing relevant information' activity - it still
has a lot of potential to grow). It would also be very useful in generating KPI's to
measure the effectiveness of performance both at a departmental level and at an
individual (staff) level.
- Budgeting (page 28) should help to manage variances; overspends may be
avoidable and therefore need to be mitigated in other areas of the
department or business. Equally under spends may indicate that some key
business objectives are not being met
- External reporting: this should also be seen as a way of celebrating
success by illustrating organisational achievements
- Resource allocation: I wasn't sure about this as this may be part of the
budgeting process. Continuous improvement and lessons learned should
permeate across some of the other principles
- Risk management should also look at taking advantages of opportunities
on the assumption that not all risks are negative
- Project management: whilst this should focus on controls, the nature of
some projects or their timeframe may mean that they could be modified to
encompass other cross organisational working or opportunities, albeit whilst
being mindful of scope creep.
147
It's a great summary of all 12 areas, and very comprehensive. One area I am
Applying the principles to each of these areas is probably over engineered. I would
51
Response
Number
150
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
clearly missing is Mergers & Acquisitions. This is from identifying a ‘target’,
preparing and presenting business case, to decision making, execution and
post-merger integration (go to market and legal integration). We absorb a
significant amount of the management accountancy skills in this area.
not do it to avoid confusing things. I believe Figure 13 is sufficient to cover the
application of the principles.
- Intangibles to represent a company’s real values (ex: brand valuation,
intellectual capital, etc)
The Performance Management Cycle practice areas narrows the scope to MI, and
has limited the applicability in terms of implementation. Thereby also limiting the
scope of career development to MAs
- Sustainability (e.g. Business Models to measure Carbon Foot print etc.)
- Consider addition of a practice area that would provide an assessment of
'business value' to the twelve core practice areas identified, with a view to
emphasize the value creation role and forward looking nature of
management accounting.
- Practice areas seem very old school and basic.
151
The practice area number 8 can be removed because “Regulatory
adherence and compliance” is largely a function of financial accounting.
Practice area number 3, “External reporting”, should be renamed into
“Coordination with external reporting” thus underlining the fact that the ways
and frameworks of external accounting are not a subject matter of
management accounting, but that the management accounting information
can be actively used for external reporting purposes.
An additional practice can be added. This is «Controlling business
processes», which, in essence, stands for operational internal control and
monitoring of the business environment in order to ensure sustained value
creation by implementing principles of deviation control and disturbance
control. This area has its own set of problems (day-to-day management),
methodological tools and professional competencies required from the
employees.
People are the company’s most important non-financial value-creating factor,
which has its financial equivalent – the cost of labor. In practice,
management accountants take part in developing motivation programs for
operations managers or prepare relevant information when motivationrelated decisions are being made. The aim of motivating company’s staff
(both financially and non-financially) is to meet business’s strategic
objectives. The KPIs should be measured and strong performance should be
rewarded. So when designing a motivational program, it is important to strike
a balance between employee’s personal interests, those of his department
and of the company as a whole. I think that this aspect of management
accountant’s work is not covered by these 12 practice areas.
52
Response
Number
Do the 12 core practice areas cover the main elements of
your finance function? Are there other areas that should
be covered?
152
The 12 core practice areas do address all of the main areas of activity in
relation to the broad remit of Finance that play a key role in the overall
financial management processes that operate within a company. Applying
the principles to each of these core practice areas could provide a way of
assessing whether an organisation is focusing on the right things but also
looking at how well the activities are being performed. Of course, the
document is pitched at a very high level so in order to be able to use it would
require a considerable amount of effort, depending on the size of the
organisation to work through this systematically to make it relevant to the
specific organisation.
154
The core practice areas do not include an indication that management
accountants engage in performance measurement / strategy realization
measurement.
Their tasks fail to mention internal reporting, either.
Descriptions of the core practice areas:
Do you agree with the way in which GMAPs are applied to the
core practice areas? Does it work or is it too prescriptive?
Further comments?
They are understandable and sufficient. The detailed presentation of the Principles
prevents them from being interpreted in an incomplete or incorrect way, especially in
countries or businesses with less developed management accounting cultures, and
given the fact that the understanding of the role and objectives of management
accounting differs among management accountants and managers, as does their
experience in the field.
• fail to clearly emphasise a future-oriented stance (especially in a long-term
perspective);
• put too much emphasis on the internal perspective, failing to observe the
importance of market information and benchmarking.
Do they operate in this way or are they too prescriptive? The Principles, as
any principles, are prescriptive by nature.
157
In the document one of the 12 areas of management accounting practice is
identified as budgeting. I agree that this should be one of the areas but
question if the title should be reconsidered. In today's environment there is
more and more discussion and movement to going away from a historical
concept of budgeting, which usually connotes an annual process. More
companies are experimenting with rolling forecast and other methods than
an annual budget process. You may consider using a term like forecasting or
planning as an alternative. This encompasses budgeting but can also be
broader in context.
Another area of management accounting practice is financial controls. It
appears that much of what is now evolving as shared services would fall into
this area. With so much happening in this area you might want to consider
breaking it out separately or possibly talking about it more specifically in the
document.
53
Question 8 What was the current role of the management accounting in your organisation? (a) Do you agree with the view
that management accounting helps your board of directors to make decisions which are more long term in nature than
would otherwise be the case? (b) Do you agree with the view that management accounting is based on empirical analysis
and largely avoids conjecture?
Response
Number
What was the current role of the management accounting
in your organisation? Do you agree with the view that
management accounting helps your board of directors to
make decisions which are more long term in nature than
would otherwise be the case?
3
Yes
4
Yes
8
Budgeting and estimation parts of analysis are always subjective and it is
necessary sometimes to debate the assumptions and have plans that are
not fully supported by all the players, obviously the Management Accountant
must listen and act objectively, but sometimes you will be guessing or
working on someone else’s guess.
12
Management Accounting in my organisation provides reliable information in
a robust control environment supporting sound decision making by
management
68
I strongly agree that management accounting helps the board make more
effective short-term and long-term decisions. I also agree that management
accounting promotes a greater evidence based approach to decision-making
69
On the question of MA helping the board to make decisions - yes
85
Most business identify finance and accounting functions with numbers and
number crunching - is it the intention to engage the business, a set of
professionals or lay down the perimeters of the function or all or any of the
above? This is not clear from the document.
Do you agree with the view that management accounting is
based on empirical analysis and largely avoids conjecture?
On the view that MA is based on empirical analysis - yes.
In contrast financial accounting and cost accounting are clearly delineated by
CBOK and functional expertise. They also deliver different perspectives on
numbers from the same set of financial transactions. Management
accountants legacy began by refocusing cost accountants as entity specialist
and same cannot be left out at this juncture.
88
Management accountants prepare a picture of the current financial position
and what it might look like in the future if the business continues as it has.
54
Response
Number
What was the current role of the management accounting
in your organisation? Do you agree with the view that
management accounting helps your board of directors to
make decisions which are more long term in nature than
would otherwise be the case?
Do you agree with the view that management accounting is
based on empirical analysis and largely avoids conjecture?
Management accountants need to be like clairvoyants. They can use
empirical evidence as a starting point but have to make assumptions based
on future
89
I would suggest the Financial Accountants present the “strategic goals” of
the business and the Management Accountant delivers the journey.
Management Accountants deliver the way the goals can be achieved what
steps will be undertaken and is very useful at delivering the message to the
business. I believe MA’s can deliver on both fronts. Some MA’s get to a
point within the company that they know the business like their clothes,
therefore “gut feel” can be quite accurate and successful. Obviously comes
with time.
90
It is called Performance Reporting and only covers a fraction of what it could.
It is limited by the understanding and skillsets of the management
accountants. Some professional judgment is required which some people
may see as conjecture. What it is depends on the level of professional
judgment.
102
Understanding ‘management accounting as the ‘function’ and not the
‘department’, it is to provide the basic data and produce the necessary
figures, reports and documentation (amongst other things) to support a
planning process orchestrated by the CORPORATE PLANNING function.
The same ‘reports/numbers’ are also used in the regular and routine,
monthly management accounting reporting system. A full response would
take us in to epistemology, which is not addressed in the Draft document –
but most longer-term forecasts are inevitably subjective and not empirical
(nor ‘evidence-based solutions’ [p. 5]). A discussion of this sort could very
easily become a semantic debate!
105
To provide most of the areas covered in figure 10 and to give confidence to
the board about the information that decisions are being based upon. Other
parts of the business hold more influence as the company is very sales
driven and while the good times last then all the strategic focus is on the
sales pipeline and nothing else really matters. Conjecture plays an important
part of influencing strategic decision making and should be an area in which
management accounting plays an important part.
111
Management Accounting has a direct supporting and guiding role for our
board. The analyst has a role all management meetings. Management
Accounting is based on data produced by the ERP system or published
information on competitors and the market. Conjecture is avoided and there
55
Response
Number
What was the current role of the management accounting
in your organisation? Do you agree with the view that
management accounting helps your board of directors to
make decisions which are more long term in nature than
would otherwise be the case?
Do you agree with the view that management accounting is
based on empirical analysis and largely avoids conjecture?
is a gap analysis between what is known or surmised.
112
Whilst it is largely based on empirical data, the majority of management accounting
is forward looking, extrapolating and guesstimating. To improve the quality of the
modelling the management accountant has to apply an informed “interpretation” of
certain events, if for nothing else that to identify the most appropriate scenarios to
model. The better the management accountant’s understanding of the business, the
better this interpretation and the greater their value to the organisation. Any such
interpretations should always be highlighted and may well come under scenario
planning so that decision makers understand strict empirical scenario and more
conjectured scenarios.
In my experience the smaller the organization, the greater the conjecture by the
management accountant, either because there is less or poor quality empirical data
to use or because the management accountant has a more general role and is
therefore closer to the business.
115
The current role of management accounting in my organisation is diverse.
Traditionally and routinely, budgeting, external reporting and regulatory
compliance are three (3) of the most common practices found in most
organisations, including mine. Infrequently, pricing and product decisions,
risk management and project management are practised in my organisation.
Other areas may be practised to a great extent or otherwise depending on
the nature of the industry and the functions delegated to me. I personally
believe that management accounting helps an organisation to make
decisions which are more long-term in nature than would otherwise be the
case. However, in my case, the situation is different.
My board of directors are completely ignorant of the importance of the
finance function, not to mention appreciating the role of management
accounting. They are also extremely cost-conscious and believe that a
business can sustain its operations without the need of a management
accountant; hence their view on short-term profit-taking decisions as
opposed to long-term business sustainability and survival decisions.
Management accounting is based on empirical analysis and largely avoids
conjecture. The role of any accountant is to base its actions and decisions
on hard information, evidence and knowledge. This principle serves as a
guide in driving an accountant towards providing credible and reliable
information which a business uses to make decisions, and this is no
exception to the case of a management accountant. However, given the
subjective and future-oriented nature of this area of accounting, there are
often cases where management accountants have to utilise incomplete
56
Response
Number
What was the current role of the management accounting
in your organisation? Do you agree with the view that
management accounting helps your board of directors to
make decisions which are more long term in nature than
would otherwise be the case?
Do you agree with the view that management accounting is
based on empirical analysis and largely avoids conjecture?
information to make recommendations to management of organisations.
Despite having to use scientific tools and techniques to assist them in
arriving at reliable decisions, yet the role of management accountants is not
perceived as being significant and relevant in the minds of organisations.
116
Agree that this should be the role in organizations but sense that it usually is
not. That is, US organizations typically have a short-term view and will use
conjecture to inform decisions; this is purely speculative (isn't that ironic).
I feel that management accounting can let the Board make prudent decisions
today which may have long term implications. Concomitantly, the Board
must realize that as management accounting evolves and changes, prior
decisions and conclusions must be re-evaluated.
Yes, but it is important to recognize that the use of data to speculate or
brainstorm is valid. But the data itself should not be conjectural unless it is so
identified.
Management accounting can help boards think more long-term in decisionmaking, but the pressure for short-term performance for publicly traded
organizations may take priority. We hope the second bullet is true. It is not
unusual for management to request data to support a favoured project.
Management accounting aids in decision making through our annual
budgeting and planning process. But, this influence is often limited to this
time frame. The remainder of the year, management accounting is focused
on short-term decisions. This often leads other areas to drive long-term
decisions through project or system needs, rather than the health of the
financial system. Management accounting's role in my organization varies
greatly due to our size. There is a significant emphasis on budgeting,
financial controls, external reporting, and regulatory compliance. However,
lately there has been greater emphasis on cost transference. Yes,
management accountants play a key role in decision making. I do agree that
management accounting is based on empirical analysis.
Agree with the role as described.
yes that seems reasonable, but a Cost and management accountant can
never take a lead role in decision making because of CPA's and tax
attorneys get more recognition in the organization.
125
Definitely yes. Management accounting plays the decision support role and
is one of the main sources of information for management including strategic
decision-making.
57
Response
Number
What was the current role of the management accounting
in your organisation? Do you agree with the view that
management accounting helps your board of directors to
make decisions which are more long term in nature than
would otherwise be the case?
128
In our organization management accounting plays a role in all the following
areas: pricing/costing, cost management, group investment appraisal,
business control, business reporting and analysis, project management,
enterprise risk management, treasury and cash management, continuous
improvement that drives value creation and improves productivity
133
The finance function in our organisation plays three roles. It ensures
compliance with accounting standards which goes beyond the boundary of
international reporting standards to include the requirements of Managing
Public Money. It seeks to ensure compliance with the legislation that confers
powers on the organisation to perform certain types of financial activity, e.g.
What and how much it can charge customers for, whether it can provide
grant, or whether activities are compliant with State Aid rules. And it seeks to
drive performance, improve transparency and efficiency and support
decision makers to use resources as effectively and efficiently as possible.
The finance function has traditionally provided most value in the two
compliance areas with less emphasis on performance management and
resource allocation. This has been largely supported by a planning function,
populated by staff from a business rather than a management accounting
background. The organisation has begun to professionalise its management
accounting function over the past few years and made huge strides, a
process which has required and continues to demand cultural change from
managers to accept and use financial information to fully inform their
decision making.
Do you agree with the view that management accounting is
based on empirical analysis and largely avoids conjecture?
If we did not agree with (a) and (b) it would call into question the strategy of
the organisation to embed financial management skills and capabilities into
the organisation and to develop and enhance the role played by
management accounting within it.
135
The current role of management accounting is mainly focused on Project
Accounting and Infrastructure Asset Maintenance Accounting.
I agree with the view that strategic management accounting could help our
board to make decisions that are more long-term in nature.
140
The role of management accounting in my organisation is to provide a clear
picture of the current financial position of the company, and to provide
forecasts to senior management. These will then form the basis for decisions
which may affect both the short and longer term direction of the company.
Yes I agree that management accounting is based on empirical analysis and largely
avoids conjecture. This does not mean that the information has to be extremely
accurate all the time. It may be approximate but should be an adequate reflection of
reality so that they can be relied on with reasonable confidence for taking decisions.
I certainly agree that management accounting is based on empirical analysis. This is
necessary to give as high a degree of confidence as possible in the information
provided.
58
Response
Number
What was the current role of the management accounting
in your organisation? Do you agree with the view that
management accounting helps your board of directors to
make decisions which are more long term in nature than
would otherwise be the case?
145
150
Do you agree with the view that management accounting is
based on empirical analysis and largely avoids conjecture?
I absolutely agree that management accounting should be evidence based rather
than anecdotal. I have worked in organisations which embrace both. Unsurprisingly,
an organisation leaning more towards evidence based decision making, understands
and respects what a management accountant does.
Quite limited in the Sri Lankan market. Financial Accounting takes more
precedence in many organizations. The need to align management
accounting with the skills set of financial accounting is becoming a standard
requirement. Advancements of IT have made decision cycles shorter despite
the long term nature of management accounting.
In the modern times one also need to carryout research on future trends,
(changes in technology, environment) and conjectures to the future may also
be required in the ever changing dynamic business world.
153
Role of management information in my organization:
- information on progress in achieving strategic goals
- trigger for process improvement
- information to key stakeholders on realization of their agenda
- benchmarking
- Guides on information relevance
- Compares data sources and identifies inconsistencies
- Provides out of box view on data trends
154
Yes, it helps in long term decision making (which includes, for instance,
taking decisions regarding new study programmes, strategic partnerships).
We agree that in principle management accounting is based on empirical analysis. In
our organisation, management accounting is still in development – not all information
is generated in a timely fashion, so sometimes managerial decisions are based on
conjecture.
59
Question 9 How do you currently assess the quality of your management accounting capability? (a) Do you believe that a
set of Global Management Accounting Principles would help you to benchmark and thus improve your capability? (b) Do
you believe that it is right to pursue the route of principles rather than rules? (c) Can principles work without some form of
accreditation system? (d) Would you find it useful to have a diagnostic tool to enable the chief finance officers and their
finance teams to assess the quality of the management accounting in their organisations and identify areas that need
improving? (e) To what extent does your organisation develop skills and talents within its finance function?
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
3
Yes
4
Yes
8
No - don't agree it’s a pretty intrinsic thing,
you are either getting the information you
want or not. That said a report in regards of
how an organisation performs against
section 5 of this document would be useful,
certainly in larger organisations, to ensure
that all the angles are covered.
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
To what extent does your organisation
develop skills and talents within its
finance function?
Yes a tool is always helpful, but so is the understanding
that its use would be optional not mandatory, to be used
when required.
Very small transactions based accounts team, so not
relevant, other than for myself and I follow the CPD
rules.
Principles are definitely superior to rules in
all things, having come out of financial
services the rules based approach
completely failed to stop ill principled
decision takers. Principles also allow faster
adaption to changing realities and allow for
many voices to be heard. Rules are often
subject to amendment and confused
complexity as they fail to deal with various
scenarios, e.g. should a hotel chain that
60
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
To what extent does your organisation
develop skills and talents within its
finance function?
undergoes constant renovation/improvement
have to depreciate their buildings? Is it
murder when you act in self defence?
Should you always increase prices to
customers in a monopoly? Surely the
accreditation system is CIMA membership,
cpd and complaints/disciplinary.
12
By using CIMA's online CPD planner/the professional
development cycle
68
Yes, principles are considerably more
effective and enduring than rules, in this
context. However, there is value to the
business in having periodic objective
assessment of adherence to any such
principles. In my organisation we have a
finance “capability framework” for managing
people development. There are three core
areas of capability; control, insight and
influence. There are three levels of
assessment; core, experienced and
mastery. The Principles can be used to
inform a review of the framework and also
validate it.
69
(a) Don't know.
(b) Yes.
Don't know.
Staff are encouraged and supported in pursuing
appropriate professional qualifications.
(c) One of the things implied by an
accreditation system is that people not
accredited are not capable of following the
principles. This is not the case as there are
many competent professionals performing
management accounting functions, many of
whom may be accredited in some way
61
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
To what extent does your organisation
develop skills and talents within its
finance function?
through other organisations or professional
institutes.
84
As rightly explained in the paper that
effective Management Accounting Practices
would be an integral part of sustainable
success of the organization. It is imperative
that an organization assesses the maturity of
its MA function.
88
I assess the quality when comparing
budgets to actuals and revised forecasts to
out-turn, because it is not empirical it has to
be principle based, but within the regulatory
framework. The management accountant
can’t agree a budget for something which
would be ultra vires or in breach of funding
agreements etc. Principles are intrinsic. Any
principal could be evidenced by an outcome.
How could this be accredited? I think
accreditation would give assurance to users
of finance but what benefit would it actually
give the finance profession? The focus in
the public sector is still about streamlining
and workloads are at record highs. Adding in
another layer of assurance would not help.
The annual performance appraisal combined
with the team objective setting is a good
enough tool.
89
The Principles is a fresh approach and is
more reflective of real business. Setting
rules will never satisfy whereas principles
can be moulded to cover all business
workings.
62
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
90
(a) We don’t. If they had the ability to take
into consideration whether certain
capabilities were required and the ability to
assess the level of maturity that is required.
However, a growing field in IT is the
Information Systems Auditor (CISA). The
importance of Information is exceeding the
importance of IT and we may see a new field
emerge, the Information Management
Auditor (another kind if CIMA) or perhaps
more importantly Information Governance
Auditor which provides assurance of
Information Governance. Just as boards are
realising the need for IT Governance they
may find that Information Governance is
even more important than IT Governance.
Our organisation now considers Information
more important than IT. I suspect many
others are experiencing similar paradigm
shifts.
To the extent of CPD requirements, our organisation
understands the need for more training in IT. It doesn’t
yet understand the importance of investing in
Information Management
95
In organizations I have worked on, we have
used consultants like Hackett, CEB and
Deloitte. There is value in these 3rd party
approaches and the depth of their panels,
but often the action list boils down to generic
reporting v analysis and spans of controls,
rather than the deeper nature of value
adding activities I would expect the practices
and tools that are the implementation of the
principles, are core to the CGMA/CIMA
accreditation.
Support career development through role and job
definitions across our organization. Utilize resources
from consultants and organizations like CEB for
courses and materials. Utilize sharing within the
organization
102
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
To what extent does your organisation
develop skills and talents within its
finance function?
The results from a diagnostic tool are bound to be
contingent on the character and needs of the organisation.
63
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
To what extent does your organisation
develop skills and talents within its
finance function?
No one set of techniques and skills will meet the needs of
all organisations
105
(a) We don’t really do this in a meaningful
way.
Yes, I believe principals can be applied
universally in a constructive way – it is more
pragmatic in a chaotic world. Principals can
be demonstrated and measured – it is for
each CFO to determine what is appropriate
for the business need. The main focus is on
partnering and building relationships and
influence as a priority. Technical skills are a
given.
107
I looked at Risk Management, seems ok and
Compliance. Being transparent about
weaknesses is to be applauded but probably
a step too far for most organisations. A
valuable source of information about noncompliance is employees (and third parties)
and they need to be encouraged to report.
The essential value is that everyone knows
their responsibilities and everyone complies
without exception. Consistently applied
discipline is also essential. The Management
accountant collects relevant information to
assure the effectiveness of the compliance
process
109
Yes, certainly. I think, from the context that I
am in. These could improve the professional
standing for management accountants.
111
Benchmarking against principles would be
useful. But would have to be adjusted for the
A diagnostic tool is not required if an organisation has a
properly constructed reporting framework that has internal
We have a full developmental plan for all members of
64
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
To what extent does your organisation
develop skills and talents within its
finance function?
importance of forecasting and internal
reporting. Principles are more useful than
rule because they are applicable across all
types of organisations and operational
environments. Principles need accreditation
to give practitioners independence, status
and objective rules to apply regardless of the
organisational environment they work in.
and external reporting focused on key targets
the Finance Team.
112
Management’s confidence that the data
used in forward modelling is sufficiently
accurate and robust that they are can make
decisions on an informed basis, so far as
possible. Hindsight provides a good
measure to the quality of past modelling and
decisions i.e. monitoring.
Wouldn't personally find a diagnostic tool useful
We are a small team working for a fast growth
organisation where all members of the team are
constantly adapting and thinking on their feet. Training
is on the job and talent attracts further responsibility
and authority.
115
Currently, my management accounting
capabilities and skills are relatively
commendable although I do not always have
the opportunity to practise every area of this
subject. Sometimes, the working
environment could contribute towards your
ability to show out as an effective
management accountant and this may affect
the quality of your capability.
Caution must be exercised as a diagnostic tool is a typical
application of a rules-based system of assessment of a
particular situation. Anything not included in the checklist
may be exposed to manipulation or omission by the
respondent, although this deficiency can be resolved
partially by the use of a preferential system of response.
A set of Global Management Accounting
Principles would help a management
accountant to benchmark his quality of
management accounting capability.
However, as mentioned above, the presence
and use of this set of Principles cannot
guarantee all those that make use of it will
improve their management accounting skills
Also, questions must be prepared diligently to ensure they
are able to bring out the response needed for the purpose
they were designed. Despite this point, a diagnostic tool
remains static and rigid, and its ability to assess subjective
and intangible issues, such as quality of management
accounting or level of satisfaction remains questionable.
A diagnostic tool is also unable to identify areas in a
business that need improvement as it cannot include all
items in its checklist for easy box-ticking by the respondent.
Expression of ideas and opinions requires a descriptive
and narrative approach in its implementation and in this
65
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
and capability.
case, a principles-based approach is more likely to achieve
this purpose.
Principles encourage exploration of the
mindsets in determining what is wrong or
right. Rules are rigid and discourage the
development or expansion of capability of a
person. In reality, there are many business
situations that do not fall entirely under one
side of the circumstance. This requires a
person to exercise judgement based on the
condition of the situation at the time. In this
regard, the ultimate step or decision taken
may be influenced by that person’s previous
experience, state of mind or pressure from
external sources (peers, colleagues, friends,
family members, etc). .
116
To my knowledge, we currently do not
assess the quality of our management
accounting capability.
Yes, a diagnostic tool would be helpful.
I believe some form of accreditation system
is needed to make the principles legitimate,
authoritative, and stronger.
Any organization should welcome an opportunity for
continuous improvement that a diagnostic tool can provide
In my opinion, developing general principles
rather than rules is the only option.
Developing specific rules that apply
generally to all organizations is very difficult.
In attempting to go across a diversity of
sectors, geography and organizations a
principle based approach is the only choice.
A diagnostic tool would be very helpful and could point out
to our finance staff what areas are most crucial to improve
our organization's quality of management accounting.
To what extent does your organisation
develop skills and talents within its
finance function?
We tend to develop skills through participation in
special projects and some training. But, generally,
skills are developed through doing the work, whether
being trained by the supervisor or following developed
procedures. These principles would seem to further
assist staff in developing skills by expanding their
horizon and encouraging them to learn more about
how others apply these principles.
This set of Principles would be very helpful
to ensure that our organization is modelling
66
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
To what extent does your organisation
develop skills and talents within its
finance function?
its roles and responsibilities on best
practices. In reviewing the principles, our
organization follows some, but there is
definite room for improvement in adapting
these principles.
117
There should be a diagnostic tool to enable chief finance
officers and their teams to assess the quality of the
management accounting. The finance team should always
be utilizing the latest tools to fine-tune their skills and
talents.
122
As we progress through these fundamental changes, I can
see a place for applying the proposed diagnostic tool,
amongst other tools, to assess our progress and identify
gaps for further improvement. The ability to adapt this tool
to the public sector environment would assist us in this.
125
Generally yes. However detailed guidance
for some practice areas (financial control,
risk management) would be valuable.
Yes, diagnostic tool will be very helpful. It may be in a form
of ICQ (Internal Control Questionnaire) with sets of precise
questions for each area. This will enable organizations with
limited resources to make audit of current processes in the
most efficient way.
128
The quality of our management accounting
capability is effective. However, there is
room for improvement particularly for
stakeholder value chain contribution.
Yes, diagnostic tools, such as process mapping and gap
analysis, would be definitely helpful to enable chief finance
officers and their finance teams to assess the quality of
management accounting in the organisation and identify
areas that need improvement
130
Our management accounting capability is
not really assessed
131
I currently do not assess my management
capability, so I think that it would be great to
We also have 1 – 2 soft skills trainings per employee
per year. The organization supports technical skills
development trough regular controllers (=management
accountants) conferences and financing of additional
professional education (local accounting seminars,
CIMA).
I would suggest differentiating the tool from the Principles.
67
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
To what extent does your organisation
develop skills and talents within its
finance function?
Yes. Where we have used these, they have focused and
driven improvement measures. However the diagnostic
tool provided in Figure 15 feels very focused on private
sector, manufacturing organisations.
Staff is encouraged to qualify, and maintain CPD and
to learn continuously. All staff have development
actions in their Individual Performance Plan. We run
both hard skills and soft skills training and
development programmes.
A diagnostic tool to assess the quality of management
accounting in an organisation and identify areas that need
improvement would be great. Though developing a tool that
could apply to every business and business situation is
likely to be very challenging given the range and diversity
of issues addressed by management accounting. But one
could begin with identifying some of more obvious areas
where a diagnostic tool could be helpful.
The organisation that I work for is a listed company
and has an HR department supporting learning and
development within the finance team. The
performance development and review process of the
company ensures that there is a continuous process
of development of talent within the company. The
performance development and review process is
managed by the Line Manager with his direct reports
have tool for such an assessment.
133
We have independently assessed our
finance function capabilities using a CIPFA
model on more than one occasion,
developing action plans and seeking
improvements across timeframes of two to
three years before repeating the exercise.
We have also used various techniques to
evaluate our business finance (management
accounting) function for example customer
questionnaires which evaluate information
provision, business knowledge and
relationships or TIPAR (Timeliness,
Information, Professionalism, Attitude,
Result) analysis.
(a) Yes
(b) Yes
(c) Yes and an accreditation may not be
helpful. BS or ISO are often seen as tick box
exercises rather than processes that really
drive improvement.
135
It is unlikely that principles will work without
some kind of accreditation system that
involves acquisition of theoretical knowledge
of the principles of management accounting
and experience in the application of the
same.
The diagnostic tool could potentially comprise of:
68
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
To what extent does your organisation
develop skills and talents within its
finance function?
a) Questions on strategy of the company
b) Questions on business model
c) The type of information needed for managing the
operations and strategy of the company
140
We don’t formally assess the quality of our
management accounting capability.
141
In general, route of principles seems vastly
superior to the fixed set of rules but such
solution would only work in certain
organizational business areas, i.e. project
management, management accounting, etc.
The introduction of a set of global principles and a
diagnostic tool would enable us to do approach this in a
considered and scientific manner.
On the other hand, official accreditation (e.g.
from a board) for a conduct based on
principles (which ought to be compiled in an
organization’s dedicated document) is a
must in order to outline generally accepted
practices and assign certain responsibilities.
142
CIMA should look at the GRI training model
where accredited trainers are provided with
training content and training certificates are
issued by GRI. It standardizes practice, rid
the market of unscrupulous trainers and
create a global brand just like the CIMA
brand.
145
I think a set of principles and its application
to management accounting practices would
definitely provide benchmarking
opportunities. Although these would provide
As an internal tool, however, I think this is a big,
revolutionary step in the right direction!
69
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
To what extent does your organisation
develop skills and talents within its
finance function?
Yes, a diagnostic tool would be very helpful, particularly in
the implementation of management accounting theories of
Balanced Scorecard etc.
Sri Lankan organizations send in their staff to
Accounting workshops and also allow them to mix with
other multi functional project teams in marketing/HR/
manufacturing etc. providing them a broader
understanding of the organization
some good internal KPIs, I am not really
sure what value a formal accreditation
system would add. There is a risk that any
accreditation system would re-direct the
focus towards a 'box-marking' exercise
rather than embracing the spirit of what this
is trying to accomplish.
150
It is good to have an accreditation system,
similar to the Global Reporting
Initiative(GRI) under Sustainability reporting
153
I assess the management accounting
capability as high. However there are areas
for improvement identified:
- higher integration of existing tools
- more in depth analysis on data available
154
As far as the University’s own management
is concerned, management accounting is
still in the development phase and
management accountants are being trained.
Our institution offers high quality management
accounting education and the Department’s staff have
extensive practical experience and theoretical skills.
They can, provided that they are not only
appropriately publicised and promoted by
CIMA/AICPA experts and academics
professionally involved in management
accounting, but also endorsed by business
managers actively participating in the
promotion process. The Principles must be
properly translated into national languages,
70
Response
Number
How do you currently assess the
quality of your management
accounting capability? Do you
believe that a set of Global
Management Accounting
Principles would help you to
benchmark and thus improve
your capability? Do you believe
that it is right to pursue the route
of principles rather than rules?
Would you find it useful to have a diagnostic
tool to enable the chief finance officers and
their finance teams to assess the quality of
the management accounting in their
organisations and identify areas that need
improving?
To what extent does your organisation
develop skills and talents within its
finance function?
including Polish.
71
Question 10 Any other feedback that you believe would help us improve the Global Management Accounting Principles
Response
Number
Further Feedback
1
Figure 15 regarding checklist, I think this would be very useful but need to map the principles, behaviors and core areas of practices.
5
Encompassed in all this would be risk analysis, current and emerging, cost of entry, sustainability and more!! This is where Management Accountants working with
Marketing executives can be invaluable
8
Figure 1 is very unclear and steals the thunder of figure 3 (or 7 for more detail) which is what the document is supposed to be about
12
Whilst Figure 11 does make sense, it is very basic. Due to the vast amount of data available, it would be preferable to rename 'Management Accountant' as
'Management Accounting', and ‘Data Scientist’ to 'Data Science,' which demonstrates the need for more than one individual's involvement. Ideally, data will be
channelled through the whole organisation in a structured way, leading to the involvement of all departments to varying degrees; this could be incorporated into the
diagram. Data science and management accounting would be the co-ordinators of data mining.
13
Opportunities for Big Data
14
(1) It will be difficult to implement these principles in smaller enterprises due to constraints on resources
(2) People managing these processes don't actually know how to manage - they do not understand.
18
Management accounting bases its foresight on historical, financial accounting
22
Communication skills are increasingly important for- interacting with non financial specialists, influencing, challenging and cutting through complexity.
27
Should provide an additional glossary for terms like outputs, outcomes, KPI's as these are often used interchangeably in business
29
Need to clarify foresight - does it include forecasting.
39
The pursuit of stakeholder value is a continuous process which cannot be aligned to a specific time period. MAP's need to include the capture of this continuous
value creation.
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Value can be created (or destroyed) in different ways. The issue of consistency vs relevance is important - MA needs to be adaptable. The role of the MA varies
across and within organisations.
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The MAP's seem to portray the MA as too much of a spectator or observer.
45
Some of the principles are outside the management accounting space - i.e. tax, compliance, price & product decisions.
46
A definition of MA is very important for Russia as we are still in the process of changing our system to be closer with the international one. The Soviet Union had a
very different system of accounting.
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There is a need to include the role of the MA as forward looking and to include GAP analysis.
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Information presentation is very important - there should be guidelines on the presentation of information. Standards / codes of conduct should focus on Board and
Senior Management roles and responsibilities and on objectivity and independence.
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CIMA can play an important role in promoting ACMA in developing countries by utilising MA tools through CIMA qualified professionals.
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The costs vs benefits of obtaining information should be considered.
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Response
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Further Feedback
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There should be a greater focus on the triple bottom line and corporate social responsibility.
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The term "Business Model" must mean the same to all. One definition is "ownership, governance, stewardship, talent, capacity, integrated value system”
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MAs represent the finance specialism. We need to take into account the cultural differences in the USA where MBA's don't necessarily have finance skills.
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There are some who would disagree with the statement “The core practice areas of the finance function should be performed within the guidance of best practice
Global Management Accounting Principles" (in Section 5). Stating that there was nothing before may come across as arrogant - these principles have always
existed but may not have been capture in a single document like this before. Many finance professionals have followed these principles for years, not because
they were following some published set of principles, but because it made sense to do so. These principles describe what good management accountants do - be
careful of insinuating that without a published set of principles, it is not possible to do the right thing.
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For a non -profit (NFP) organisation the role of financial and management accountants overlap
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The CPA is not responsible for companywide people development but should have an input to companywide development philosophy.
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Interesting and potentially very useful framework
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Why not capitalize “Management Accounting” throughout the document? Care should be taken to use language consistently. For example “Strategy” is a noun
while “Execute” is a verb. Use either “Strategy”, “Plan” and “Execution” or “Strategize”, “Plan” and “Execute” (see GMAP map).
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Once again an excellent document. The challenge now is how to implement this.
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Figure 8 -“The journey to effectiveness” (page 19): I am not sure that this is a good representation. The IFAC PAIBC stresses in its paper, The Role and
Expectations of a CFO, the importance of commercial and communication skills for professional accountants who want to take up senior financial leadership roles.
To describe and depict this as management accountants moving out of their comfort zone may not be helpful.
Under the code of ethics, professional accountants should not take up roles for which they do not have the necessary competence. The principles should be more
closely reconciled with financial reporting standards – although it should be recognised that FRS are looking at past information, whereas the principles are more
forward looking.
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Since we are global, English will not be the first language of many intended users. You need to be mindful of this and cut out, let’s say, the phrases that will be hard
to translate, e.g. 2nd sentence on page 8 seems like a clumsy way of saying that the principles guide Management Accountants in what they do and how they do it.
Cost transformation is a bit of jargon that probably hasn’t made its way around the world. Appears to be about eliminating waste, so why not say that. In
“Stakeholder expectations” on page 15 - Suggestion would be to delete the word “ambiguous”.
Is there a definition of what is meant by “sustainable success”? I think you are referring to minimised societal and environmental impacts resulting from business
activity but maybe you simply mean for a long time. I presume that the principles and values must endure for a long, long time.
I think it would be helpful to say whether CGMA members are obliged to follow these principles and values. I think it would be useful to say this so that users of this
document know that if they employ a CGMA to do this work (as opposed to a planner, economist, etc.) that this is what they can expect. The section on
Relationships is slightly concerning for me as it suggests that scarce resource and access to markets are allocated to those with the relationships and not to the
most efficient producers on the basis of competitive bidding. It also suggests thoughts of corruption. The section about value sharing – not sure why this is
included.
Figure 6 – doesn’t do justice to the notion of the diagnostic tool. Lastly, quality, timely information can create value when it leads to consistently forecasted
outcomes. Then the weighted average cost of capital is likely to be lower and thus value of the organisation will be higher.
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Community should be included as one of the stakeholders at the beginning of the second paragraph under the heading “Stakeholder expectations”.
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Response
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Further Feedback
Page 14 - “Relationships” should include regulators and “Resources” should include intellectual property.
Figure 12 – For people unfamiliar with Integrated Reporting Framework the diagram has inadequate explanation. If it is to be used, it should be included in an
Appendix or should have more narrative to explain it and the relevance.
What is interesting in the document is that there is no reference to the international or global dimension. I would also suggest that rather than use the expression
driving better business through improved performance, you should use the expression driving value creation through information for decision making. In the
preamble to the document, reference should be made to big data, predictive analytics, crowdsourcing, real time decision making and mobile technology and the
impact and usefulness of information and the impact they are having on business decision making. The role of the modern management information professional
should be set in this context.
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When describing the Relationship (Page 14) in the Value Creation section, the document shows an organization’s relationships with suppliers, customers,
investors, employees and the community, but it does not explicitly mention the relationship between the organization and regulatory bodies (i.e., Ministry of
Finance, Ministry of Commerce, Taxation Bureau, and Banking Regulatory Commission). Since maintaining and improving such relationships have become
increasingly important in the business operations, we suggest adding the relationship with “regulatory bodies” into the Relationship sub-section.
Also, on the same page, when describing the Resources, the document indicates raw materials, technology, financial and other resources, but it does not explicitly
mention human capital. Although human capital is not presented as an asset in the financial statements, it is the most fundamental resource to implement an
organization’s strategy, execute business plans and create shareholder values. Nowadays, more and more organizations emphasize on the alignment of personal
professional development needs with the company’s strategic objectives in order to motivate employees and achieve a win-win situation for both the company and
the employees. Therefore, we suggest adding “human capital” into the Resource sub-section.
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