How to Prepare for the Future of Management Accounting and Control

The field of management accounting and control is undergoing significant changes and disruptions due to factors such as technology, globalisation, regulation, and social expectations. These changes pose both challenges and opportunities for management accountants and their organisations, requiring them to adapt and evolve their skills, competencies, and roles to cope with the new realities and to provide more value to their stakeholders.

In this article, we suggest a possible priorities roadmap for the next 3 to 5 years for companies and professionals in management accounting and control. The roadmap comprises four main areas: technology, reporting, ethics, and partnering. We will explain each area and provide some examples of actions that can be taken to achieve them.

Technology: Embracing and Leveraging the Digital Transformation

Technology is one of the main drivers of change in the accounting and business environment. It offers new possibilities and challenges for management accounting and control, such as data analytics, integrated reporting, sustainability, blockchain, artificial intelligence, cloud computing, and cybersecurity.

To embrace and leverage digital transformation, management accountants need to invest in data analytics and digital literacy skills, such as learning how to use advanced tools and techniques to collect, analyse, interpret, and communicate data from various sources and platforms. Data analytics can help management accountants provide more accurate, timely, and relevant information to support decision-making and performance evaluation. A recent study by ACCA found that data analytics skills are among the top priorities for finance professionals in 2023. The study also highlighted some benefits of data analytics for finance functions, such as improving efficiency, enhancing quality, reducing costs, increasing insights, and creating value.

Management accountants must also explore and adopt emerging technologies, such as artificial intelligence, blockchain, cloud computing, and cybersecurity, and understand their implications for accounting and business processes, systems, and controls. These technologies can help management accountants automate routine tasks, improve security and transparency, enable collaboration and innovation, and generate new business models and opportunities. A report by the IFAC described how artificial intelligence could transform the accounting profession by augmenting human capabilities, enabling new services, and creating new roles. The report also provided some recommendations for accountants to prepare for the impact of artificial intelligence on their work.

Finally, management accountants need to develop a technology strategy that aligns with the organisational goals and objectives and that supports innovation and value creation. A technology strategy can help management accountants plan, implement, monitor, and evaluate the adoption and use of technology in their organisations. An article by CIMA suggested some steps for developing a technology strategy for finance functions, such as assessing the current state of technology maturity, identifying the desired future state of technology capabilities, prioritising the technology initiatives and projects, and measuring the technology outcomes and benefits.

Reporting: Adopting a Holistic and Strategic Perspective on Business Performance

Reporting is another critical area of change in the accounting and business environment. It reflects the increasing demand for more comprehensive and integrated information on business performance, considering not only financial but also environmental, social, and governance factors.

To adopt a holistic and strategic perspective on business performance, management accountants need to implement integrated reporting frameworks and standards, such as the International Integrated Reporting Framework or the Global Reporting Initiative Standards, to communicate the value creation story of the organisation to internal and external stakeholders. Integrated reporting can help management accountants provide more coherent, consistent, and concise information that links strategy, governance, risks, opportunities, and outcomes. A study by the ACCA found that integrated reporting can improve stakeholder engagement, enhance accountability and transparency, support decision-making and strategy execution, and foster long-term thinking and sustainability.

Management accountants must also enhance the quality, reliability, and relevance of the information provided using data analytics, assurance, and verification methods. These methods can help management accountants ensure that the information is accurate, complete, timely, and trustworthy and that it meets the needs and expectations of the users. A recent report by the IFAC described how assurance can add value to integrated reporting by increasing confidence, credibility, and trust in the information. The report also guided assurance practitioners in applying assurance standards and principles to integrated reporting.

Finally, management accountants need to engage with stakeholders to understand their needs and expectations and to provide insights and recommendations that support decision-making and value creation. Stakeholders include internal parties, such as managers, employees, and board members, and external parties, such as investors, customers, suppliers, regulators, and society. A CIMA article suggested ways for management accountants to improve stakeholder engagement, such as identifying and prioritising the key stakeholders, understanding their interests and concerns, communicating effectively and transparently, and building trust and relationships.

Ethics: Upholding High Standards of Ethics and Professionalism

Ethics is another crucial area of change in the accounting and business environment. It reflects the increasing pressure on management accountants to uphold high standards of ethics and professionalism in their work, especially in complex and uncertain situations.

To uphold high standards of ethics and professionalism, management accountants must follow the ethical codes and principles of professional bodies, such as ACCA, IFAC, or CIMA, and apply them in practice. These codes and principles guide management accountants on how to act with integrity, objectivity, competence, confidentiality, and professional behaviour. A publication by ACCA explained the importance of ethics for finance professionals and how to apply the ACCA Code of Ethics and Conduct in different scenarios. The publication also provided tips and tools for developing ethical awareness and judgment skills.

Management accountants must also demonstrate their commitment to public interest, social responsibility, and sustainability by considering the impact of accounting and business activities on society and the environment. This can help management accountants contribute to the achievement of the United Nations Sustainable Development Goals and other global initiatives that aim to address the social and environmental challenges facing the world. A report by the IFAC highlighted the role of accountants in advancing sustainability and supporting the public interest. The report also provided some examples of how accountants can integrate sustainability into their work, such as measuring and reporting on sustainability performance, giving assurance on sustainability information, advising on sustainability strategy and risk management, and promoting sustainability education and awareness.

Finally, management accountants need to develop ethical awareness and judgment skills, such as identifying ethical dilemmas, analysing ethical issues, evaluating ethical alternatives, and making ethical decisions. These skills can help management accountants deal with the ethical challenges that may arise in their work, such as conflicts of interest, fraud, corruption, whistleblowing, or human rights violations. A recent article by the CIMA provided some steps for making ethical decisions in management accounting, such as defining the problem, gathering the facts, identifying the stakeholders, considering the options, applying the ethical principles, weighing the consequences, making the decision, and reviewing the outcome.

Partnering: Collaborating More Closely with Other Functions and External Parties

Partnering is another critical area of change in the accounting and business environment. It reflects the increasing need for management accountants to collaborate more closely with other functions and external parties, providing insights and advice that support decision-making and value creation.

To collaborate more closely with other functions and external parties, management accountants need to expand their role from being information providers to being business partners by using their skills and knowledge to help solve problems, improve processes, optimise performance, and create value. Business partnering can help management accountants add value to their organisations and stakeholders by providing strategic insights, facilitating innovation, enabling change, and supporting growth. A study by the ACCA identified some key competencies for finance business partners, such as business acumen, communication skills, influencing skills, relationship-building skills, and analytical skills. The study also provided some best practices for finance business partnering, such as aligning with the business strategy, understanding the business needs and drivers, delivering actionable insights and recommendations, and measuring and demonstrating value.

Management accountants also need to develop leadership skills, such as vision, innovation, influence, and resilience, to lead change initiatives, manage projects, inspire teams, and foster a culture of learning and improvement. Leadership skills can help management accountants drive transformation and performance in their organisations and functions by setting direction, mobilising resources, engaging stakeholders, and overcoming challenges. A report by the IFAC described how leadership can enhance the value of finance functions in public sector organisations. The report also provided some guidance for finance leaders on developing and applying their leadership skills in different contexts and situations.

Finally, management accountants must build relationships and networks with other functions and external parties, such as operations, marketing, finance, suppliers, customers, regulators, etc., to understand their perspectives, needs, challenges, and opportunities. Relationships and networks can help management accountants collaborate more effectively and efficiently with others by sharing information, knowledge, ideas, and resources. A study by the CIMA suggested ways for management accountants to build relationships and networks with other functions and external parties, such as identifying and reaching out to key contacts, establishing common goals and interests, providing mutual support and feedback, and creating value for each other.

The future of management accounting and control is uncertain and challenging but also exciting and rewarding. Management accountants and their organisations need to prepare for the future by following a priorities roadmap that covers four main areas: technology, reporting, ethics, and partnering. By doing so, they can enhance their skills, competencies, and roles and provide more value to their stakeholders.

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