Competent and Versatile: How professional Accountants in Business Drive
Sustainable Organisational Success
CIMA Response to this IFAC Consultation paper
Overview:
The PAIB is to be congratulated on this thought provoking consultation paper. The following
comments are intended to be constructive. We look forward to contributing further to this
important work. Before addressing the questions posed, we would make the following points:

This paper seems to have two very different objectives. Firstly, it is addressed to
management accountants and exhorts them to make a greater contribution to their
organisations’ success. It is also addressed to business leaders as employers and
makes the case for accountants in business being engaged as management
accountants to contribute much more than the production of accounts. The terms
used to describe the roles they could play and the drivers of sustainable
organisations may be better suited to the first objective than the second.

An implicit third objective could be to raise the profile of management accountants
among the wider stakeholder community so that society, other management
disciplines and regulators look to management accountants to ensure that there is
greater accountability in business.

Business leaders might find the case for engaging management accountants as
proposed more compelling if their roles were described in terms with which they
would be more familiar. Evidence could be presented of how accountants in these
roles can help to save them more money, make them more money, protect their
money and ensure that they will still be making money for years to come.

The matrix which “summarises the expectations placed upon professional
accountants in business” may not be exhaustive but it is an interesting framework.
However, it seems to suggest that there are roles where accountants create value
and other roles where they enable value creation, preserve value or report value.
This does not make clear how accountants are actually deployed in a business, nor
how versatile they can be in that they can often be an enabler, creator, reporter and a
preserver of value within the one role.

An organisation’s management accountants can contribute professional objectivity,
integrity and ethics internally, long before a matter need be considered by external
auditors or regulators. This can be seen as preventative and require them to be
prepared to be unpopular through saying no or even to be whistle-blowers. However
these qualities must be complemented by analytical, presentation and influencing
skills. Often, the challenge is to articulate values and present evidence that provides
transparency to inform decision makers before actions are taken. This enables
managers to question potential actions and helps them to reach right decisions
without unnecessary confrontation. Applying ethical standards might be presented as
a positive contribution which management accountants are well placed to make. It
helps to sustain the organisations’ success, for example, by protecting its reputation
and enhancing its brands’ attraction to consumers.
Responses to the questions posed:
1. Does the paper fairly and usefully represent the diverse roles and domain of professional
accountants in business? Please suggest ideas on how we can enhance the paper to
become a useful tool in (a) creating awareness of the important roles professional
accountants play in creating, enabling, preserving, and reporting value for organizations and
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stakeholders, and (b) identifying how IFAC could assist its member bodies and associates in
enhancing the competence of their members.
Finance Directorate
Expert
Services
(audit, tax,
treasury...)
Information
Systems
(data capture
and access)
External
Reporting
(statutory
accounts,
compliance...)
Management
Accountancy,
information
and analysis
Planning &
Control
incl. performance
& risk
management
Accounting Operations
(Transaction processing , recording and basic reporting including
the ‘purchase to pay’, ‘order to cash’ and ‘record to report’
processes)
Professional accountants in business or management accountants perform a wide range of
roles as illustrated above. It is a team game. Some perform high profile roles where they
have the opportunity to be as influential as this paper describes. Many more perform support
roles but they ensure the integrity of the management information. Some may aspire to
achieve career progression to more high profile commercial roles. Others may progress to
become expert in more technical roles. Some accountants’ contributions may only be
hygiene factors but these are important too.
Creating, enabling, preserving, and reporting value for organizations and stakeholders are
not terms used in advertisements or role specifications. It may be useful to relate the terms
employers actually use to the potential benefits to the business if accountants are
developed, engaged and challenged to contribute more as management accountants.
This paper encourages accountants to supply a greater contribution to the success of their
organisations. It could be inspirational for accountants. However, if so, it could also be
aspirational for some accountants. Many business leaders have not experienced how
management accountants can contribute in this way. So, they do not demand this from their
accountants. Perhaps this work should be published as two papers: One addressed to
accountants to stimulate supply and another addressed to business leaders and the wider
stakeholder community to stimulate demand for management accountants?
2. What additional tools could IFAC develop to assist its member bodies and associates to
promote and communicate the roles of professional accountants in business to various
audiences, including employers, governments, and regulators?
A business case that demonstrates the value of accountants’ contribution would be difficult
to prove as there are many other variables (e.g. timing, sector, relative scale, competitive
position and chance). However, it could be shown that there is (a) a high correlation between
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engaging accountants in these roles and success and (b) that leading organisations,
potential competitors, already do this.1
At CIMA, we like to describe a management accountant as the navigator rather than the
captain of the enterprise. They support business leaders with information and analysis about
the organisation’s position and course. They may not determine its strategic direction but
they contribute to decision making and are prepared to challenge constructively when
necessary to ensure the business is managed in the long term interests of stakeholders.
Business leaders may be confident in their own ability to create value and might not be keen
to employ accountants to police their ethics. The benefits that might convince them to value
management accountants’ potential contribution might have to seem more tangible:
 Monies due must be collected Suppliers must be paid. Records must be kept. Reports
must be produced. These may be hygiene factors but they are of fundamental
importance and management accountants take care of them. The use of technology,
business process improvement and shared service centres are increasingly important in
this area of Finance Operations. Business leaders can rely on management accountants
do these things correctly, ever more efficiently and to ever higher standards of service.
The integrity of the information they produce is the often the basis of their credibility.
 There is evidence that business leaders feel they have to make decisions without the
information they need, even though the necessary data is often captured by the
business’ systems. Management accountants can provide better management
information. Financial metrics are about outcomes. Decision makers need reliable
information about the drivers of cost, risk and value including leading indicators about the
organisation’s competitive position, performance, risks and opportunities.
 In most organisations management accountants provide the formal strategic planning
framework. They can ensure a long term view is taken to ensure the business addresses
risks and opportunities to ensure its success is sustained. They can provide the
information and analysis necessary to inform strategic decisions.
 Management accountants can provide cost leadership. The disciplines which leading
organisations have applied to reduce the costs of their finance function can be applied
across all business processes. These disciplines include systems standardisation,
centralisation of expertise and process improvement (e.g. Lean, Six Sigma and Kaizen).
 Management accountants can also provide the metrics, analysis and insights necessary
to manage operational risk and performance. These can help the business to address
risks, exploit opportunities and innovate.
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For example, Deloitte in Finance Masters: How Finance is Quietly Emerging as a Key to Business
Transformation, Deloitte, 2008 or Accenture’s High Performance Institute
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Future
Business
Model
Strategic
Decision
Making
Current
Position
 Management accountants play an important control role which requires more emphasis.
It is firstly about ensuring the integrity of financial and management information metrics.
This gives business leaders confidence in the view presented of the organisation’s
financial situation, its competitive position, its performance and management’s
accountability. This confidence in the current position is essential before plotting the next
leg of the organisation’s journey. This control role is also about analysing the data or
other evidence that should be considered to apply due diligence to strategic decision
making so as to ensure it is grounded in financial reality. This constructive interrogation
of strategic rhetoric is necessary to assess the financial viability of the organisation’s
strategic direction and its future business model. A further benefit is that this helps to
determine the funding and resources required, the actions to be taken, the risks to be
managed and the metrics or milestones that can be used as KPIs (Key Performance
Indicators) to manage progress towards the achievement of strategic intent. This form of
control is very important as it helps to ensure the organisation’s long term success.
 In addition to tracking how the business is performing, management accountants can
track how it is transforming to ensure the sustainability of its business model. And they
also ensure it is conforming to not only regulatory requirements but also the expectations
of stakeholders and its brand values.
 Management accountants have a vital role to play in filtering the financial and other
management information, including leading indicators and analysis, about position,
costs, performance, risks and opportunities that is provided to decision makers including
the board. They can also help to implement strategy and cascade performance and risk
management throughout the business. This ‘percolator effect’ is essential to link the
board and the business. It helps to ensure not only good governance but also the proper
management of the organisation in the long term interests of shareholders and other
stakeholders.
 In all these roles, particularly in performance and risk management and when engaged in
strategic decision making, management accountants can apply professional objectivity,
integrity and ethics to both support and challenge business leaders so as to ensure the
business is managed in the long term interests of shareholders with due regard to other
stakeholders.
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3. Do you agree with the drivers of sustainable organizations that lead to long-term
sustainable value creation, as identified in Part 2 and described in Appendix 2? If not, what
alternatives would you suggest?
The eight drivers are valid but they may not be familiar to business leaders. This could be
seen as accountants’ rhetoric for fellow accountants rather a compelling proposition for
business leaders. Balanced scorecard and Value Chains would be more familiar and these
could be used to make the same points.
The challenge always is to balance improving current performance with investing to develop
the organisation’s competitive position so as to sustain its success.
In order to manage risk and performance, management need to be able to understand how
the business is performing along its value chain in operational terms as well as in terms of
financial metrics. They need to understand the drivers of cost, risk and value to manage how
the business is performing, transforming and conforming.
4. Would IFAC member bodies and associates find it useful for an international competency
framework to be developed, covering the roles and domain of professional accountants in
business defined in this paper?
We understand that the IAESB is currently reviewing IES2 on Professional Accounting
Programme content with the aim of moving towards competency maps in accounting
qualifications. We trust that any work by the PAIB in this area would be coordinated so as to
minimise any potential duplication of effort or divergence in views presented.
A competency framework would be helpful but it should not be static. Business leaders look
to their finance functions to be more efficient, to provide better management information and
to be more influential. In addition to describing the knowledge and competencies required to
perform each role today, it would be useful to identify the trends in the expectations of each
role so that management accountants can future-proof their careers.
5. How would a competency framework be best structured? Could the competences be
usefully structured using the eight drivers of sustainable organizations, and would it be
practicable to use the description of the key expectations placed upon professional
accountants in business in Part 4?
Best practice seems to be to have Knowledge Skills and Competency frameworks that
reflect the job families in the finance function (as illustrated above). These frameworks
specify the levels of up to ten attributes expected to perform a role. The attributes required
are usually described in an attributes dictionary which explains the value of each attribute
and sets out how it is evidenced at four or five levels of attainment.
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