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PACE Academic IG

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Stream of consciousness thread...

As we move past Profits+ 2024, I find myself thinking about what exactly defines management accounting/corporate finance. Who are we as a discipline? Yes, we are about supporting decision making inside the organization, but is that enough to demark a discipline? How does this collection of myriad and disparate tools come together to define something distinct?

I keep coming back to the DuPont model (which needs to be put back into CMA testing) and breaking down the components. Understanding each component to the point we can model how resources are generated and consumed to make confident predictions and understand risk impacting the firms ROI seems to be in the ballpark.

I will admit, from my background I probably lean toward what today we call Financial Planning and Analysis; although, I'm more of a "lumper" than a "cracker" (borrowing from biological sciences a bit, but probably messed up the terms) in that I think FP&A, management accounting, corporate finance, cost engineering, forecasting, risk management are really aspects of one larger discipline and while there are some secondary distinctions, the various pushes to demark separate disciplines are likely more harmful than helpful.

Enough for now. Maybe more in later weeks.

Gary Cokins

JP ... I like what you have written and agree with you. I have a different angle on management accounting. Regardless on how it is defined, I believe that management accounting does not necessarily provide answers.

What it does is generate questions (e.g., from its visibility and transparency to provide insights). Many are needed questions (e.g., Why is our customer with the highest sales volume unprofitable?) This initiates the actions to address problems that may have been suspected, but management accounting provides the facts,



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