The Chartered Institute of Management Accountants (CIMA) and the American Institute of Certified Public Accountants (AICPA) have proposed a comprehensive framework to bring consistency to management accounting practices around the world and help organisations to make smarter, faster decisions for the long-term amidst growing complexity and change.
The draft framework, entitled "Global Management Accounting Principles: Driving Better Business Through Improved Performance," is now out for consultation with feedback sought from businesses and institutions across the world – public and private, small and large.
Charles Tilley FCMA, CGMA, Chief Executive of CIMA, said: "Over the last few years, we’ve all seen how globalisation and the break-neck pace of technological progress are making change harder to predict and organisations more vulnerable.
"We may now be seeing encouraging signs in the global economy, but we cannot afford to be complacent. We must learn the lessons of the last six years. To be confident of a successful future over the long-term, organisations must adopt a robust management accounting system that encompasses their financial reporting. This in turn will provide investors, customers and the general public with a greater confidence."
Tilley noted that management accountants have the ability and judgement to make objective, ethical decisions that consider the public interest. But the quality of management accounting remains varied.
"Our principles will enable organisations to leverage both financial and, importantly, non-financial data. They will provide the forward-looking focus and link different parts of an organisation in a way that many still lack," said Tilley.
The draft principles outline the values and qualities that represent best practice management accounting on a global scale. They include guidance on preparing relevant information, modelling value creation, communicating with impact and establishing the professional values of management
The framework will include a diagnostic tool which will help businesses and institutions to ensure that they are making the most efficient use of key information.
"We are asking businesses and other relevant organisations across the globe to tell us how our draft framework can best meet their fast-changing needs. By working together, we can contribute to a comprehensive system fit for our era of uncertainty that will, put simply, make business better," continued Tilley.
The consultation will reach across CIMA and the AICPA’s network of 177 countries. The two institutes joined forces to launch the Chartered Global Management Accountant (CGMA) designation in 2012 and are working together to highlight the importance of management accounting in today’s economic climate.
A series of national and international events is planned, including local employer roundtables and meetings with leading business thinkers from all sectors and all geographies.