Has anyone ever told you that being a CPA is just about crunching numbers? If they did, you surely told them they were dead wrong. Right? Around the world, organizations are racing to keep up with global competition and the increased risks surrounding day-to-day operations. It’s no surprise that now, more than ever, organizations are relying on management accountants to apply knowledge of financial analysis and understanding of non-financial, qualitative information to help make vital business decisions.
CEOs need help getting a clear picture of the organization’s performance and where future business opportunities are. CPA-management accountants are the key players in shaping leadership decision-making and driving success across the organization.
What is Management Accounting?
Management accounting is a mix of financial analysis and business strategy. It combines quantitative and qualitative data analysis to influence decision making and drive long-term business success.
The financial accounting part includes responsibilities, such as:
- Reporting financial performance
- Understanding the impact of financial laws, standards and regulations
- And providing perspective on compliance issues.
The strategy piece includes:
- Exploring new and existing business opportunities
- Providing solutions to potential obstacles
- And influencing best practices in decision making.
This means management accountants are equipped to shape both short- and long-term business plans, provide insight throughout the decision-making process and maintain oversight and control of what funding and resources comes in and out of an organization.
The CPA-Management Accountant
Organizations have always leaned on CPAs to help provide financial information to stakeholders. Many CPAs performing management accounting functions build upon their financial prowess with additional expertise in areas like research and development, production, marketing, human resources and logistics. Industry-specific knowledge of regulations, markets and common business tactics are often added to the mix as well. This wide knowledge base combined with the ability to clearly communicate information to stakeholders (a.k.a. not financial experts) positions the CPA to be extremely effective as a management accountant.
The CGMA Designation
Yes, another acronym. But this one could be the difference between you and the other guy (or gal) applying for your dream management accounting gig. The new Chartered Global Management Accountant (CGMA) designation is now being offered to those that have the experience, skills and expertise to provide organizations with the guidance needed to optimize their long-term performance.
The CGMA was created by the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA) through a joint venture that collectively represents more than 627,000 accounting professionals and students throughout the world.
“Leveraging the strength of CPAs and expanding awareness of their role in organizations worldwide, the CGMA will showcase designation-holders’ management accounting expertise and serve as a complement to the knowledge, skill set and commitment to the code of conduct CPAs already have,” said Barry Melancon, CPA, CGMA, president and CEO of the AICPA.
The two organizations are working together to increase international awareness of management accounting and what those with the CGMA designation will do to drive successful business performance. The designation is available to regular (voting) members of the AICPA who meet the qualifying requirements.