Management accountants are the conscious keepers of an organisation, says Charles Tilley, chief executive officer, Chartered Institute of Management Accountants (CIMA), UK. In conversation with Rayana Pandey, he highlights how the profession of a cost accountant has evolved over the years to be known as management accountancy:
How has the role of a management accountant changed over the years?
We, within CIMA, have devised a series of succinct definitions that describe a management accountant today. The simplest one is one who turns management issues into insight to create sustainable value in a business.
It is expected of a management accountant to be able to provide the company any kind of management information that it needs. They are expected to carve winning strategies, manage risk and set high professional standards, adding to the companys integrity.
How many mutual recognition agreements (MRAs) does CIMA have? Is one with India in the pipeline?
Accounting bodies have pathways into each other and it is very important for them to work together in public interest. CIMA is a large organisation with a global presence in over 160 countries.
As of now, we have one MRA with the Society of Management Accountants of Canada, also known as CMA Canada, meaning, there is parity in training and education of management accountants.
We will be looking at an agreement with India soon. The Institute of Cost and Works Accountants of India (ICWAI) is just launching a new syllabus, benchmarking it with the international pattern. So that should help in formalising the MRA. Even apart from MRAs, CIMA, India works on many research projects where there is scope for partnership with ICWAI.
ICWAI has been asking for a name change of the institute from cost and works to management accountants. You think this will strengthen their position while working out an MRA with other countries?
Yes. We are now talking of cost accountants as management experts. Look at how brands have evolved in todays time. Even Tatas, who would traditionally focus on cost and have many factories by virtue of being an industrial conglomerate, would focus on creating value.
In such a scenario, the concept of works is no longer applicable. Therefore, ICWAI asking for a name change is definitely understandable.
Do you think the International Federation of Accountants (IFAC) is giving sufficient attention to the profession of management accountants or is there a need to come up with a federation of management accountants?
IFAC focusing more on financial accounting is understandable because all over the world, governments and regulators are comfortable in addressing public interest through audit.
But at the same time, our concerns are adequately addressed. We do not need another federation of equal infrastructure but management accounting bodies should definitely work closely. IFAC provides the best standards in education, training and practices for the profession of management accountants and oversees it very well.
Why is it that the profession of management accountants is not as hyped as financial accountants?
As I said, financial accountancy gets much more attention due to audits but when it comes to a company, an expert is needed who can keep the consciousness of the management alive and ensure the companys integrity.
That is where the role of a management accountant comes into play. Organisations that do not have good quality information given by the management accounting, undoubtedly suffer.