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Accountancy bodies launch management accounting principles for better decision-making
THE Chartered Institute of Management Accountants (CIMA) and the American Institute of CPAs (AICPA) on Monday launched new global management accounting principles designed to improve decision-making as organisations struggle with data overload, dispersed workforces and the speed of change.
CIMA and AICPA, two of the world's largest accountancy bodies, developed the principles with inputs from CEOs, CFOs, academics, regulators and other professionals in 20 countries on five continents during a public consultation this year.
The four principles:
* Focus on breaking down silos through influential communication;
* Identify the most relevant and reliable data for examination;
* Drive analysis that reveals impact on organisational value and
* Promote integrity and trust that protects long-term sustainability.
The framework also lays out how each principle is applied across 14 practice areas, ranging from investment appraisal to treasury and cash management.
Research commissioned by CIMA and AICPA found that organisations are rethinking how decisions are made. Globally, 73 per cent of those surveyed said successful companies will increasingly empower workers to make autonomous decisions; in the Asia-Pacific, the figure was 75 per cent.
Just 36 per cent of organisations claimed that quality decisions were consistently being made at all levels, versus 41 per cent in the Asia-Pacific. This suggests that these companies lacked a framework to ensure quality.
The research also found that organisations needed to make better use of available information; 91 per cent globally and 94 per cent in the Asia-Pacific said they wanted a process to pull more insight from financial and non-financial data to shape decisions.
Organisations are looking to the finance function for help: 89 per cent globally said a stronger partnership with finance in the decision-making process would enable them to better manage their organisations in the coming years; 97 per cent of respondents in the Asia-Pacific said they wanted to strengthen this partnership - the highest percentage of any region.
The global survey was done in August by Longitude Research; it covered 1,100 senior executives, including 231 in the Asia-Pacific.