PERFORMANCE MANAGEMENT
RESEARCH UNIT
IS THERE AN EXPECTATION GAP
OF MATHEMATICAL SKILLS
BETWEEN ACCOUNTING EDUCATION
AND PRACTICE?
GRAHAM FRANCIS, CLARE SPENCER AND JACKIE FRY1
98/6
1
The Authors would like to thank Roland Kaye, Matt Hinton and CIMA for their help with
this project. The opinions expressed are the authors’ own and should not be seen as
representative of CIMA.
2
ABSTRACT
Within the accountancy profession, there has been a steady move away from the detailed
technical side of the profession and towards the more strategic, business orientated approach.
This has been partly in response to the advent of new information technology making a
number of previously difficult calculations straightforward, but also due to a repositioning of
the accountant as a ‘business adviser’ rather than a purely technical accounting and finance
expert. This paper examines the dilemma faced by the professional accountancy bodies. Are
we training accountants in the use of outdated and redundant computational techniques?
Conversely, can accountants fully understand and interpret the results of calculations if they
have never studied the process from first principles? By removing them do we risk losing
potentially valuable differentiating skills in the drive to make accounting qualifications more
strategic and business orientated?
This working paper investigates the use of quantitative skills by accountants and addresses
two main questions:
1. What quantitative techniques are accountants using in their work?
2. Is current accountancy training providing adequate coverage of appropriate quantitative
techniques?
The paper reports the findings of two questionnaire surveys carried out in conjunction with
the Chartered Institute of Management Accountants (CIMA) as part of their ongoing syllabus
development work. The first questionnaire was distributed to over 7000 CIMA employers,
both in the UK and overseas. The questionnaire explores the techniques employed by the
CIMA members and their accounting staff and also their views on the importance of
quantitative techniques in the role of a modern accountant. Lecturers on professional
accountancy courses were asked to complete a second adapted version of the questionnaire to
3
allow comparison of the views of representatives from the training and practitioner
perspectives.
An analysis of the syllabus content of the main international accounting bodies was carried
out with respect to quantitative techniques. The analysis was not restricted to the syllabus, but
guidance notes, teaching materials and past examination papers were all used to determine
both the breadth and depth of coverage. The result of this analysis was compared with the
results of the questionnaires discussed above to identify inconsistencies between the work of
modern accountants and their current accountancy training programmes.
4
1.
Introduction
Quantitative techniques underpin much of the day to day work of a modern accountant. But
how much actual knowledge and understanding of these various techniques does the
accountant need? Is an awareness of the techniques available sufficient or should accountants
demonstrate proficiency in applying them as a right of passage into their profession? With the
growth in the ease of use and sophistication of modern software are we coaching accountants
in obsolete and unnecessary skills? Are business skills more important? Is the time needed to
teach some of these techniques unjustified given the minimal use made of them by a large
number of accountants in practice? Conversely is the profession in danger of losing its one
vital differentiating factor from the hordes of MBA graduates flooding into business? As one
respondent put it ‘if the accountant does not have any mathematical skills, no-one else will’.
This paper reports on the actual scope and content of the quantitative technique elements of
accounting programmes world-wide, as well as the views of qualified accountants and
professional accountancy course lecturers on what that content should be. We look at whether
there is a difference between what is being taught and assessed and the skills used in practice.
Additionally, we will examine what skills employers expect from a qualified management
accountant and to what extent they are required in the role of a modern accountant compared
to being a professional expectation.
2.
Literature review
There is a fairly wide body of research on the application of quantitative techniques by
managers (such as Juritz et al, 1988; Naudé et al, 1997) but much less specifically on their
use by accountants. An abridged summary of relevant survey findings is shown in Table 1,
(See Appendix A for unabridged version). Naudé et al (1997), showed quite a consistent
pattern of the usage of quantitative techniques by managers, between the UK, South Africa
and New Zealand.
There is evidence that the nature of quantitative methods used, is contingent upon
organisational characteristics. Drury et al (1993) found larger organisations making more use
of mathematical methods. Juritz et al (1985) found a similar trend in South Africa.
5
Table 1 – Percentage of respondents who use techniques (based on yes or no)
Naudé et al 19971
Drury et Østergaard Wisniewsk Coccari Juritz et Kathawala Forrester Wegner Green et
Alpander 1976
al 1993
19932
i 19903
1989 al 19884
1988
19845
19836 al 1977
n=36
n=639 n=408 n=172 n=288
n=900? N=65
n=226
n=164 n=78
n=75(total, breakdown between groups not
given)
Lecturers UK
South New
UK
Denmark EU
USA
South
USA
UK
South USA
Expatriates Expatriates Expatriates Expatriates
UK
Africa Zealand
Africa
Africa
in DCs
in DCs
in LDCs
in LDCs
(USA)
(Not USA) (USA)
(Not USA)
100
20
22
15
94
97
94
This study
n=296
Employer
s UK
Fractions, percentages and ratios
Index numbers
Powers and roots
Annuities and perpetuities
Formulation and solution of linear
equations
Break-even analysis
Inventory control/analysis
Formulation and solution of
polynominal equations
Learning curves
Calculus
Logarithms
Probabilities and expected value
Simulation techniques
Bayesian statistics
Game theory
Markov chain
Queuing theory
Decision trees
Linear regression
Forecasting
Moving averages
Econometric models
Multiple regression techniques
Time series analysis
Correlation coefficients
Standard deviation
Basic stats and graphs
Analysis of variance
Normal distribution
Sampling
Quality control
Hypothesis testing
Confidence intervals
Chi square testing
Contingency tables
Nonparametric tests
Linear programming
Non-linear programming
100
47
71
57
67
25
58
19
14
84
58
42
94
63
45
67.6
30
65
38
29.3
20
91
68
50
27
78
32
68
26
23
22
39
60
35
65
20
50
40
40
15
30
22
30
9
8
3
15
10
15
30
40
15
64
8
10
11
51
17.6
70
48
94
97
29
31
20
60
44
72
84
36
31
24
46
77
96
16
32
54
38
36
44
55
89
94
13
25
11
35
37
30
75
65
80
87
16
54
25
52
81
59
15
28
88
86
72
84
7
4
7
14
5
13
16
7
9
12
3
12
4
11
2
54
25
91.2
20
40
78
89
89
85
32
48
37
29
20
Note 1 Based on a 5 point scale of no-little-moderate-frequent-extensive use. Reflects percentage replying to frequent or extensive.
7
23.5
20
64
45
48
12
83
37
Note 2 Based on a 4 point scale of not available-never-occasional-frequent. Reflects percentage replying occasional or frequent.
Quoted in Naudé et al 1997.
Note 3 Percentage indicating high frequency of use. Quoted in Naudé et al 1997.
Note 4 Percentage indicating routine usage.
Note 5 Based on a 4 point scale of none-peripheral-much-extensive. Reflects percentage replying to much or essential. Quoted in Naudé et al 1997.
Note 6 Based on a 5 point scale of no-little-moderate-frequent-extensive use. Reflects percentage replying to frequent or extensive.
8
Kathawala (1988) again found large firms in the USA made more use of quantitative
techniques and that there was a different pattern of techniques used for service and
manufacturing firms. In terms of functional areas, Coccari (1989) found that ‘production
managers’ made the greatest use of Operational Research techniques and ‘Accounting’ and
‘Finance’ made the greatest use of forecasting methods.
Coppinger and Epley (1972) examining the non-use of advanced mathematical techniques,
found, with the exception of discounted cash flow, little use of other techniques. Kathawala
(1988) considered lack of knowledge to be a significant barrier to the use of techniques.
Where as Stray et al (1994) cite both time to collect and process data as well as lack of
knowledge. Naudé et al (1997) sought to differentiate between an awareness of the techniques
and their usage.
Whilst this paper focuses on underlying quantitative skills as well as application, much of the
research has focused simply on the applications. The survey by Drury et al (1993) mainly
concentrated on management accounting practice but also included a section on ‘Other
Aspects of Management Accounting’ that included questions on quantitative techniques.
Their findings also revealed mistakes in the treatment of inflation.
One area, which has been extensively researched, is Capital Investment Appraisal, with
studies by Drury et al (1993) and Sangster (1993) amongst others. Pike’s studies (see Pike
and Wolfe, 1988; Pike and Neale, 1993 for summaries), have shown a changing pattern of
techniques, but this can not be put down to the training of accountants as Capital Budgeting
techniques and their relative merits have long been included in the syllabuses.
In recent years, particularly following Johnson and Kaplan (1987), there has been much
emphasis on the need for changes in management accounting practice (see Scapens, 1991;
Bromwich and Bhimani, 1989) This has inevitably led to discussion about the changing roles
of management accountants. CIMA’s 'Standards of Competence in Management Accounting'
(1994) also seeks to define the key roles of a professional management accountant.
Kaplan (1995) (cf Francis et al, 1998) argues that management accountants should:
9
•
become part of their organisation’s value-added team,
•
participate in the formulation and implementation of strategy,
•
translate strategic intent and capabilities into operational and managerial measures,
•
move away from being scorekeepers of the past to become the designers of the
organisation's critical management information systems.
Cooper (1996) argues that management accountants role must evolve:
“Look out, Management Accountants. To survive, you must develop skills
in systems design and implementation, change management, and strategy
as well as cost management and management accounting.”
Developments in information technology have also had a profound effect on roles of
accountants and their required skills. However an over reliance on computers can be
problematic. Ward (1997) points out that there were mistakes in as many as 90% of
spreadsheets, highlighting the importance of having an understanding of what is going on
inside the computer. (cf Earl and Hopwood, 1981)
“Organisations…and business schools…are investing significantly in
computational hardware and software…On the other hand the same
institutions are increasingly turning their backs on ‘Bean Counters’.”
Dhebar (1993)
These pressures have led to a need for syllabuses to develop to reflect the needs of students.
As Hanno and Turner (1996) state:
“The accounting profession is clearly a dynamic and changing field. The
future will demand a more fluid and adaptive approach to delivering
accounting education.”
Whilst the changing environment faced by management accountants has placed new skill
demands on them, their traditional need for quantitative skills remains. Spencer and Francis
(1998a & b) found there were expectations of what a qualified accountant should be able to
do. Yet whilst quantitative skills were necessary, they were not sufficient in themselves to
make a ‘good’ accountant. Communication and computing skills were two other important
10
facets. Simons and Higgins (1993) claim that both practitioner and academics see a need for
more attention on communication and problem solving skills.
In terms of syllabus development, there have been several studies on the quantitative method
content of MBA programmes; (see for example Borsting et al, 1988; Rose et al, 1988 and
Easton et al, 1988). Coccari (1989) concluded that Universities place too much emphasis on
teaching techniques, which are little used in practice. Carver and King (1986) found that most
practitioners want input into accounting syllabuses.
Siegel and Kulesza (1996) (cf Benke, 1996) also consider there to be a gap between theory
and practice in the US. Tyrrall and Wrighton (1997) suggest a lack of congruence between the
expectations of academics, practitioners and students. Bain (1992) argues for a more
integrative approach to teaching quantitative methods rather than compartmentalising into
distinct disciplines.
Tony Mock’s (1996) article, questioned how good accountants need to be at Maths and what
their background knowledge to meet expectations:
“Isn’t it time we look through the veil of mystery surrounding
mathematics, admit what we do and don’t understand and seek to
distinguish between what is of practical relevance and what is
not?”…Mock also requested… “Can management accounting academics
and practitioners get together to ensure that the areas of research being
followed and exam syllabuses set are of practical relevance. Can those
responsible for setting exam syllabuses and teaching them ensure students
are given the tools necessary to do the job.”
3. Methodology
In order to collect data for this project two questionnaire surveys were undertaken. The first
was designed to determine the current practice of accountants in business and their views on
the role of quantitative techniques in the work of an accountant. This questionnaire was sent
to over 7000 CIMA employers, responsible for overseeing the training of the accountants
within their organisation training for the CIMA examinations. Replies were received from
296 employers who represent a comparatively large sample for this type of survey (see Table
1). These questionnaires were enclosed as part of CIMA’s employment group newsletter. This
11
method of distribution is likely to have contributed to the response rate. CIMA commissioned
the survey and chose this method of distribution to enable the employers to contribute to
CIMA’s Syllabus 2000 review.
The second smaller survey was of accountancy lecturers who attended a CIMA lecturer’s
conference. Although only 36 responses were received this does represent a high proportion
of those teaching in the areas of the syllabus which involve quantitative methods. The
purpose of the second questionnaire was to compare and contrast the views of these two
stakeholders in the accounting profession. The differences between the expectations of these
groups has been suggested by Siegel and Kulesza (1996), Benke (1996) and Tyrrall and
Wrighton (1997).
In order that comparison could be made between them, the questionnaires contained virtually
identical questions with only slight changes made to reflect the contexts of the two groups.
The questionnaires are included with results in Appendices B and C. The questions include 3
tables of Likert scales. These are suitable for attitude measurement (see Robson, 1993)
questions and also allowed other questions to reflect the frequency of use. Previous studies of
managers (rather than specifically accountants) have used a variety of scales. We have
reclassified these and our results are in Table 1 and Appendix A for purposes of comparison.
The 7 point Likert scales were labeled in order to help define the ranges. The use of such
scales in accounting education research is advocated by Hartman and Ruhl (1996) who
criticise the methodology used by some previous studies into syllabus requirements. The
questionnaires also asked an open question to provide scope for respondents to add their
comments and collected some data on the respondents’ backgrounds.
To gain a complete picture of what is currently required for professional qualification, the
quantitative method syllabus content of many of the main international accounting bodies was
analysed. A wider review of the whole of these syllabuses has also been carried out by the
Open University (Lewis and Kaye, 1997) The syllabuses examined included the main UK
bodies and countries such as Canada, Australia, South Africa and New Zealand. This analysis
was carried out using the BAAEC (Board of Accreditation of Accountancy Educational
Courses) assessment grids. The BAAEC supervises the process through which academic
courses in the United Kingdom and Eire are recognised by the Institute of Chartered
12
Accountants of England and Wales (ICAEW), the Institute of Chartered Accountants of
Scotland (ICAS), CIMA and The Chartered Institute of Public Finance and Accountancy
(CIPFA). These grids provide a comprehensive list of indicative content of Foundation and
Professional stage accountancy qualifications. The analysis was not restricted to the syllabus;
guidance notes, teaching materials and past examination papers were all used to determine
both the breadth and depth of coverage. The result of this analysis was compared with the
results of the questionnaires discussed above to identify inconsistencies between the needs of
modern accountants and their current accountancy training programmes.
4.
Results
This section first considers the results from the Employers questionnaire. It then compares
these with the results of the similar questionnaire completed by the accountancy lecturers, to
draw conclusions as to both the similarities and differences between their views on the role of
quantitative skills for the modern management accountant.
4.1
Employers questionnaire
From the 7000 questionnaires sent to CIMA employers a total of 296 responses were
received. The majority of the respondents were in senior management positions within the
finance function of their organisation (see Table 2).
Table 2 – Position of Employer respondents within their organisations
%
Chief Executive/ Director
7.8
Finance Director/Deputy/Controller 60.4
Accountant/Assistant Accountant
13.0
Manager
9.2
Other
9.6
The respondents came from across the full range of business sectors although, as one might
expect given that these organisations are training CIMA students, there was a bias towards the
manufacturing sector (see Table 3).
13
Table 3 – Business sectors of organisations covered by Employers
Manufacturing
Public sector
Service
Financial
Other
%
44.0
18.1
13.0
6.5
18.4
Respondents also came from the full size range of organisations, although the majority was
from medium sized organisations, as defined by the number of employees (see Table 4).
Table 4 – Number of employees within Employers’ organisations
Small
Medium
Large
(less than 100 employees)
(100-2500 employees)
(over 2500 employees)
%
9.9
57.0
33.1
We found some evidence that quantitative techniques were in greater use in large
organisations. This supports previous studies by Drury et al (1993), Juritz (1988) and
Kathawala (1988).
The Employers were asked a range of questions about the role of quantitative skills looking at
what quantitative techniques are used, what skills they expect of an accountant and how that
role has changed with the advent of new technology. A copy of the full results from the
questionnaire is include in Appendix B. They were also asked to comment freely on their
opinions of any of these areas. Of the 296 respondents 107 added written comments to their
questionnaire, a content analysis of which is included in Appendix D.
14
4.1.1
The importance of quantitative skills
Employers view technical skills as being crucial to the role of a modern management
accountant. 68% of participants agreed that management accountants need strong
mathematical skills and that the day to day role of an accountant requires something more
than basic numeracy skills (see Table 5). As one employer commented:
“A high level of numeracy is essential, irrespective of the use of complex
mathematical techniques. If a qualified accountant is not able to draw
conclusions from a set of numbers he is useless, and this ability depends
on being highly numerate.”
This view of the importance of a high level of numeracy was expressed by 25% of the
respondents who made written comments.
Table 5 – Employers’ responses to the role and skills requirements of today’s
management accountants
Disagree
1,2,3
%
Neutral
4
%
Agree
5,6,7
%
27
25
48
12
20
68
The modern role of a management accountant requires business
skills more than technical skills
13
28
59
Today’s management accountants do not make full use of the
mathematical techniques available to them
13
22
65
The day to day role of the management accountant only requires
basic numeracy skills
68
10
22
New technology has dramatically reduced the mathematical skills
needed by a management accountant
34
13
53
Newly qualified management accountants have weak mathematical
skills
37
41
22
27
52
21
In the modern role of a management accountant, concepts are more
important than detailed calculations
Management accountants need strong mathematical skills
Mathematical ability in newly qualified management accountants
has fallen over the last 5 years
15
When employers were asked to comment on the importance for newly qualified management
accountants to be able to carry out specific quantitative applications, very few felt that any of
the techniques presented were unimportant. An extract of these results is shown in Table 6.
Table 6 – Importance of ability in quantitative areas for newly qualified management
accountants
Unimportant
%
0
Useful
%
12
Essential
%
88
Formulating and solving problems as simple equations; for
example Price variance =Actual Qty ( Std price - Actual price)
2
30
68
Solution of problems with constraints; for example an optimal
production plan given scarcity of labour and materials
2
54
44
Estimating straight line relationships between variables; for
example the relationship between variable costs and volume
2
42
56
Compounding and discounting ; for example in discounting
cash flows or to find a monthly interest rate
4
53
43
Formulating and solving problems as more complex equations;
for example y=axb for the learning curve effect
26
65
9
Analysing data looking for trends and patterns
However in today’s environment employers saw these quantitative skills as lying along side
business and communication skills. 59% of employers agreed that the normal work of a
management accountant requires business skills more than technical skills. This is consistent
with the findings of Simons and Higgins (1993). As one employer noted in their written
comments:
“A good basic knowledge of mathematical skills is needed, but more
importantly management accountants need to be able to understand the
business needs of their organisation, and have an all-round business
knowledge.”
4.1.2 Use of quantitative skills
In contrast to some of the findings above, the survey revealed a low level of actual use of
quantitative skills. Employers were asked how often they saw certain mathematical and
quantitative techniques being used. Table 7 summarises the results; techniques have been
16
reordered from the original questionnaire by frequency of use. Naudé et al (1997) also found
a difference between the awareness of techniques and their use.
Table 7 – Use of mathematical techniques in the workplace
Fractions, percentages & ratios
Probabilities and expected value
Annuities and perpetuities
Decision trees
Normal distribution
Formulation and solution of linear equations
Standard deviation
Linear regression
Powers and roots
Correlation coefficients
Linear programming
Formulation and solution of polynomial equations
Calculus
Chi squared testing
Logarithms
Often
Daily, weekly,
monthly
%
100
40
23
31
17
28
18
15
25
11
8
7
5
4
2
Occasionally
Quarterly,
annually
%
0
44
48
39
42
29
37
33
22
33
20
18
14
11
12
Never
%
0
16
29
30
41
43
45
52
53
56
72
75
81
85
86
This lack of use of mathematical techniques was reinforced elsewhere in the questionnaire
where 65% of respondents agreed that management accountants do not make full use of the
mathematical techniques available to them (see Table 5). Kathawala (1988) considers a lack
of knowledge to be the major inhibitor of use of quantitative methods, whereas Stray et al
(1994) also consider the time involved to be a constraint. The written comments from
employers cited both of these as inhibiting the use of quantitative techniques.
Therefore, although in Table 6, 98% of respondents viewed ability in the use of simple
equations as useful or essential, in practice only 57% ever encountered their use. The contrast
can also be seen if we look at the use of a more advanced idea such as compounding and
discounting. 96% of employers felt it was a skill that management accountants should have,
but 29% never saw annuities or perpetuities being used and 54% never saw the use of powers
or roots.
17
4.1.3
Specialist skills
At first sight the findings of the survey appear to indicate that accountants rarely use
quantitative skills but expect students to acquire them as a ‘right of passage’. However as a
number of respondents stressed, knowledge of and ability in applying quantitative techniques
is a crucial and differentiating skill for accountants. This skill helps to maintain the
accountant’s expert and positional power and provides them with an important underpinning
for wherever their accountancy career takes them. As Hoecht and Willet (1998) suggest
competence and knowledge can be assessed, certified and credentialled. It is at this point that
a professional group can score in both economic and social order, if it manages to determine
the nature of the knowledge to be examined, and gains the offered recognition from this state.
This was emphasized in the comments from one employer, who was not a qualified
accountant:
“We are a small company and our knowledge of management accountants
is very little. Our trainee is the only one in our organisation to try for this
qualification. However, we are impressed by CIMA and although we do
not use quantitative techniques, we fully expect our trainee to qualify and
be able to use mathematical skills to improve our organisation’s
effectiveness.”
There is the expectation that accountants, as specialists, are able to do more than their day to
day tasks in the organisation when necessary. A thorough grounding in the range of
quantitative techniques available ensures that they have the expertise to identify what
techniques to use in a given situation. As one employer put it:
“On a day to day basis, the role of the management accountant does not
require a high level of mathematical skill. However, I have found that
periodically, a problem will arise where an awareness and ability to
supply a particular mathematical tool has proved essential. We should
continue to educate CIMA students to a high standard in maths to ensure
they are equipped to do the job.”
So, although many mathematical skills are not required on a day to day basis, the knowledge
of the range of quantitative techniques available to help a business is still seen by the
Employers as being a crucial part of the role of a management accountant. It can also be
18
viewed as a way of convincing the public that claims for professional privilege are based on
technical expertise, (Neu, 1991).
4.1.4
New technology
New technology also appears to have played its part in reducing the day to day use of
mathematical techniques. Often the necessary calculations are being carried out by software
packages and the accountant is being presented with the analysed data. This view was
reinforced by the fact that 53% of respondents agreed that new technology had dramatically
reduced the mathematical skills needed by management accountants. But as a number of
respondents stressed in their written comments, the ability to interpret and question results
can only really come from a fundamental understanding of how those results have been
generated. As one employer commented:
“Technology does away with much of the detailed knowledge of how to do
calculations, but it is essential to understand what you are doing, why and
how to interpret the results.”
Within the accountancy profession, there has been a steady move away from the detailed
technical side of the profession and towards the more strategic, business orientated approach.
This has been partly in response to the advent of new information technology making a
number of previously difficult calculations straightforward, but also due to a repositioning of
the accountant as a ‘business adviser’ rather than a purely technical accounting and finance
expert, (see Cooper, 1996; Francis et al, 1998 and Kaplan, 1995).
In the view of the majority of the Employers, the modern management accountant need to be
multi-skilled with a good knowledge of the range of quantitative techniques available, but
also with strong business and communication skills to support the technical skills.
4.2
Lecturers’ questionnaire
From the Lecturers attending the CIMA Lecturers conference a total of 36 completed
responses were received. The majority of the respondents were involved in teaching the
quantitative papers for the CIMA examinations, which are Cost Accounting and Quantitative
19
Methods (CQM) at Stage 1, Operational Cost Accounting (OCA) and Management Science
Applications (MSA) at Stage 2, Management Accounting Applications (MAA) at Stage 3 and
Strategic Financial Management (SFM) and Management Accounting Control Systems
(MCS) at Stage 4.
A detailed breakdown of the papers taught is shown in Table 8 below. Quantitative papers are
highlighted in bold
Table 8 – Subject specialisms of Lecturers (quantitative subjects shown in bold)
%
%
%
%
FAF
22
ECN
11
BSN
22
CQM
36
FNA
8
LAW
6
OCA
39
MSA
36
FRP
8
OMD
17
TAX
3
MAA
42
SMM
25
IFM
6
SFM
33
MCS
25
The Lecturers came from a mixture of public and private sector colleges (Table 9) and were
predominantly of Senior Lecturers or Director status (Table 10).
Table 9 – Type of organisation for which Lecturers teach
Public sector
Private sector
Freelance
%
51
37
12
Table 10 – Position of Lecturers within their organisations
Director
Principal/Senior Lecturer
Lecturer
Professor
%
40
31
26
3
The lecturers were asked a similar range of questions to the Employers about the role of
quantitative techniques, looking at what skills they expect of an accountant and how they
believe the role has changed with the advent of new technology. A copy of the full results
from the questionnaire is included in Appendix C. They were also asked to add written
comments relating to any of these areas. Of the 36 lecturers who responded, 19 added written
comments to their questionnaire, a content analysis of which is included in Appendix D.
20
4.2.1
The importance of quantitative skills
The Lecturers saw the role of the management accountant as being increasingly business
orientated (66% felt the role requires more business skills than technical skills, see Table 11).
This view was reinforced by the result that 63% agreed that concepts are more important than
detailed calculations, noticeably higher than the 48% of Employers.
Also 64% of the
lecturers felt that new technology had reduced the level of mathematical skills needed by a
management accountant, compared with only 53% of the employers.
Table 11 – Lecturers’ responses to the role and skills requirements of today’s
management accountant
Disagree
1,2,3
%
Neutral
4
%
Agree
5,6,7
%
17
20
63
14
22
64
The modern role of a management accountant requires business
skills more than technical skills
6
28
66
Today’s management accountants do not make full use of the
mathematical techniques available to them
16
25
59
The day to day role of the management accountant only requires
basic numeracy skills
54
9
37
New technology has dramatically reduced the mathematical skills
needed by a management accountant
30
6
64
Newly qualified management accountants have weak mathematical
skills
20
37
43
18
28
54
In the modern role of a management accountant, concepts are more
important than detailed calculations
Management accountants need strong mathematical skills
Mathematical ability in newly qualified management accountants
has fallen over the last 5 years
When Lecturers were asked to comment on the importance for newly qualified management
accountants to be able to carry out specific quantitative applications, their views were similar
to those of the Employers. Figure 1 and Figure 2 show the results from the two groups for
comparison.
21
Figure 1: Employers responses to the importance of ability in
quantitative areas for newly qualified managment accountants
Figure 2: Lecturers responses to the importance of ability in
quantitative areas for newly qualified managment accountants
Formulating and solving problems as more complex
equations
Formulating and solving problems as more complex
equations
Determining maximum and minimum points of functions
Determining maximum and minimum points of functions
Estimating straight line relationships between variables
Estimating straight line relationships between variables
Evaluating the reliability of results forecast by a model
compared to actual results
Evaluating the reliability of results forecast by a model
compared to actual results
Essential
Useful
Unimportant
Calculating the possible range of, and expected or
average results from projects
Essential
Useful
Unimportant
Calculating the possible range of, and expected or
average results from projects
Formulating and solving problems as simple equations
Formulating and solving problems as simple equations
Solution of problems with constraints
Solution of problems with constraints
Selection of appropriate sample size
Selection of appropriate sample size
Compounding and discounting
Compounding and discounting
Analysing data looking for trends and patterns
Analysing data looking for trends and patterns
0%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
0%
Percentage of respondents
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of respondents
22
4.2.2 Use of quantitative techniques
The Lecturers were asked to indicate what level of ability a management accountant should
possess in applying the mathematical techniques as shown in Table 12.
Table 12 – Lecturers’ opinion of the level of ability a management accountant should
possess
Fractions, percentages & ratios
Powers and roots
Annuities and perpetuities
Formulation and solution of linear equations
Formulation and solution of polynomial equations
Calculus
Logarithms
Probabilities and expected value
Decision trees
Linear regression
Correlation coefficients
Standard deviation
Normal distribution
Chi squared testing
Linear programming
Minimal ability
1&2
%
0
6
3
6
42
42
58
6
6
3
11
6
6
22
11
Moderate
ability 3,4 & 5
%
3
50
37
64
44
46
36
51
56
58
54
58
64
52
56
High ability
6&7
%
97
44
60
30
14
12
6
43
38
39
35
36
30
26
33
Figures 3 and 4 show the comparison of these results against the actual use of these
techniques in practice as indicated by the Employers. Here there can be seen to be
considerable mis-match between the techniques that Lecturers view as requiring a high level
of ability in, and the frequency of use of these techniques in practice. For example, Chisquare testing is never used by 85% of Employers, whereas 78% of Lecturers felt that a
moderate or high ability in ability in applying the technique was necessary. However these
views are not incompatible as the Employers indicated that ability in quantitative skills is
important, even if these skills are rarely, if ever, called upon in practice.
4.2.3 Specialist skills
The Lecturers’ views appeared to be much more polarized than those of the Employers’ on
what mathematical skills are necessary for accountants. A number of Lecturers believed that
the mathematical content was much too high and only the skills used regularly on the job
should be taught, whereas others felt that the students should be trained to a very high level of
technical competence. The Employers generally agreed that knowledge of all available
23
Figure 3: Within your organisation how often do you see the following
mathematical techniques being employed?
Figure 4: Lecturers responses to what level of ability should a
management accountant possess?
Logarithms
Logarithms
Chi square testing
Chi square testing
Calculus
Calculus
Formulation and solution of
polynomial equations
Formulation and solution of
polynomial equations
Linear programming
Linear programming
Correlation coefficients
Often
Occasionally
Never
Correlation coefficients
Powers and roots
Powers and roots
Linear regression
Linear regression
High ability
Moderate ability
Minimal ability
Standard deviation
Standard deviation
Formulation and solution of
linear equations
Formulation and solution of
linear equations
Normal distribution
Normal distribution
Decision trees
Decision trees
Annuities and perpetuities
Annuities and perpetuities
Probabilities and expected
value
Probabilities and expected
value
Fractions, percentages and
ratios
Fractions, percentages and
ratios
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0%
Percentage of respondents
10%
20%
30%
40%
50%
60%
70%
Percentage of respondents
24
80%
90%
100%
techniques was an important differentiator for the profession and therefore supported a high
content of quantitative techniques within CIMA’s examination syllabus. Tyrrall and Wrighton
(1997), Benke (1996) and Siegel and Kulesza (1996) have all noted the differences in
expectations between academics and practitioners.
As one Lecturer commented:
“Students simply need to have the skills required to meet the needs of
work.”
Whereas another summarised the opposite view that:
“Mathematical skills are generic skills which provide a framework for competent
professional practice.”
4.2.4 New Technology
Lecturers appeared to view new technology as having a greater impact on the role of
management accountants than did the Employers. Of the 19 Lecturers who commented, 5
cited the need for more training of software skills within the student-training period.
Interestingly this compares with only 9 out of the 107 employers who noted the same need.
5.
Coverage of quantitative techniques in accountancy programmes
The syllabus content for the Chartered Institutes of England and Wales, Scotland, Australia,
New Zealand, Canada, South Africa and Ireland were reviewed alongside the Chartered
Institute of Management Accountants (CIMA) and the Association of Charted Certified
Accountants (ACCA).
The inclusion of basic statistical and mathematical techniques, such as linear regression and
decision trees varied depending on the entry route into the profession. Bodies such as CIMA
and ACCA, which admit a large number of non-graduates directly into student membership,
had comprehensive coverage of these areas. Those bodies where the majority of students must
have taken a specific university programme before entering for the professional examinations,
such as Canada, Australia and New Zealand did not cover a number of these basic techniques
explicitly.
25
With more advanced quantitative techniques CIMA had the most comprehensive coverage,
reflecting its specialism within the field of management accounting. Apart from these
differences at the two extremes of the spectrum of techniques, the core of quantitative
techniques considered within our questionnaire were included by all the bodies.
None of the bodies appeared to formally examine the hands-on use of IT, although this would
be expected to form part of the professional experience requirements necessary to gain
membership.
6.
Conclusions
The findings of this survey indicate that accountants rarely use the more advanced
quantitative techniques, but expect students to study them as a ‘right of passage’. We have
found that there is an expectation that management accountants have a knowledge of and
ability in applying quantitative techniques. This was seen as a crucial and differentiating skill
for accountants. This skill is critical in maintaining the accountant’s expert and positional
power and provides them with an important underpinning for wherever their accountancy
career takes them.
There is the expectation that accountants, as specialists, are able, when necessary, to do more
than their day to day tasks in the organisation. A thorough grounding in the range of
quantitative techniques available ensures that they have the expertise to identify what
techniques to use in a given situation. Quantitative skills in themselves are often not required
on a day to day basis, because the calculations are being carried out by software packages and
the accountant is being presented with the analysed data. But, as a number of respondents
stressed in their written comments, the ability to interpret and question results can only really
come from a fundamental understanding of how those results have been generated. As one
employer commented:
26
“Technology does away with much of the detailed knowledge of how to do
calculations, but it is essential to understand what you are doing, why and
how to interpret the results.”
Within the accountancy profession, there has been a steady move away from the detailed
technical side of the profession and towards the more strategic, business orientated approach.
However a review of the syllabus content of some of the major international accounting
bodies showed that there remains a large body of core quantitative techniques within them.
This paper has examined the dilemma faced by the professional accountancy bodies. Are we
training accountants in the use of outdated and redundant computational techniques?
Conversely, can accountants fully understand and interpret the results of calculations if they
have never studied the process from first principles? By removing them do we risk losing
potentially valuable differentiating skills in the drive to make accounting qualifications more
strategic and business orientated?
It is our view that accountants can not interpret the results of calculations if they have not
been trained at some point in the underlying principles. We also believe that a knowledge and
understanding of the range of quantitative techniques available to organisations is a powerful
differentiator for the accounting profession even if the occasions upon which accountants are
required to draw upon that knowledge are few and far between.
This ongoing research project has already directly fed into CIMA’s Syllabus development. A
second questionnaire is planned to those who expressed a willingness to participate further, to
explore in more depth the way that quantitative techniques are applied and also to identify
areas where they could be applied. Additional research could further explore the differing
expectations of academics, accountants and student accountants, in terms of what
professional qualification should represent with respect to quantitative skills.
27
7.
References
7.1 Articles, reports and monographs
Alpander, G.G., (1976) ‘Use of Quantitative Methods in International Operations by U.S.
Overseas Executives’, Management International Review, Vol. 16, pp. 71-77
Bain, S.G., (1992) ‘The Future of Management Education’, Journal of the Operational
Research Society, Vol. 43 No. 6, pp. 557-561.
Benke, R.L., Jr., (1996) ‘150-Hour Programs and the Preparation of Management
Accountants’, Journal of Accounting Education, Vol. 14 No. 2, pp. 187-192.
Bromwich, M., & Bhimani, A., (1989) Management Accounting: Evolution Not Revolution,
CIMA, London.
Borsting, J.R., Cook, T.M., King, W.R., Rardin, R.L., & Tuggle, F.D., (1988) ‘A Model for a
first MBA Course in Management Science / Operations Research’, Interfaces, Vol. 18 No. 5,
pp. 72-80.
Carver, M.R., and King, T.E., (1986) ‘Attitudes of Accounting Practitioners Towards
Accounting Faculty and Accounting Education’, Journal of Accounting Education, Spring,
pp. 31-43.
CIMA, (1994) Standards of Competence in Management Accounting, Version 2.
Coccari, R.L., (1989) ‘How Quantitative Business Techniques are Being Used’, Business
Horizons, July/August, pp. 70-74.
Cooper, R., (1996) ‘Lookout, Management Accountants’, Management Accounting, June, pp.
35-41
28
Coppinger, R.J., & Epley, E.S., (1972) ‘The Non-Use of Advanced Mathematical
Techniques’, Managerial Planning, Vol. 20 May/June, pp. 12-15.
Dhebar, A., (1993) ‘Managing the Quality of Quantitative Analysis’, Sloan Management
Review, Winter, pp. 69-75.
Drury, C., Braund, S., Osbourne, P., & Tayles, M., (1993) A Survey of Management
Accounting Practices in UK Manufacturing Companies, ACCA Research Report.
Earl, M.J., and Hopwood, A.G., (1981) ‘From Management Information to Information
Management’, In Lucus, M.C., et al. (eds.) The Information Systems Environment, North
Holland, Amsterdam.
Easton, G., Roberts, H.V., & Tiao, G.C., (1988) ‘Making Statistics More Effective in Schools
and Business’, Journal of Business & Economic Statistics, Vol. 6 No. 2, pp. 247-260.
Francis, G.A.J., Hinton, C.M., Holloway, J., & Mayle, D., (1998) ‘A Role for Management
Accountants in Best Practice Benchmarking?’ Open University Business School Working
Paper, 98/2.
Green, T.B., Newson, W.B., & Jones, S.R., (1977) ‘A Survey of the Application of
Quantitative Techniques to Production/Operations Management in Large Corporations’,
Academy of Management Journal, Vol. 20 No. 4, pp. 669-676.
Hanno, D.M., & Turner, R.M., (1996) ‘The Changing Face of Accounting Education’,
Massachusetts CPA Review, Vol. 70 No. 1, pp. 8-12.
Hartman, B.R., & Ruhl, J.M., (1996) ‘What Corporate America Wants in Entry-Level
Accountants: Some Methodological Concerns’, Journal of Accounting Education, Vol. 14
No. 1, pp. 1-16.
29
Hoecht, A., & Willett, C., (1998) ‘The Price of Entry: Social Closure and Rites of Passage in
the UK Auditing Profession’ British Accounting Association Annual Conference, Manchester
April 1998.
Johnson, H.T., & Kaplan, R.S., (1987) Relevance Lost: The Rise and Fall of Management
accounting, Harvard Business School Press, Boston.
Juritz, J.M., Money, A.H., & Affleck-Graves, J., (1988) ‘A Survey of the Statistical Methods
Used in Business and Industry in South Africa’, South African Journal of Higher Education,
Vol. 2 No. 1, pp. 57-64.
Kaplan, R.S., (1995) 'New Roles for Management Accountants', Journal of Cost
Management, Fall, pp. 6-16.
Kathawala, Y., (1988) ‘Applications of Quantitative Techniques in Large and Small
Organizations in the United States: An empirical Analysis’, Journal of the Operational
Research Society, Vol. 39, No. 11, pp. 981-989.
Lewis, R., & Kaye, G.R., (with Dunn, J., Francis, G.A.J., Gadella, J., Lucas, U., &
Richardson, D.O.,) (1997) ‘Proposal for the Development of a Common Syllabus’, Report to
the Chartered Accounting Group Executive (CAGE).
Mock, A., (1996) ‘How Good do we Need to be at Sums?’, Management Accounting,
January, pp. 30-31.
Naudé, P., Band, D., Stray, S., & Wegner, T., (1997) ‘An International Comparison of
Management’s Use of Quantitative Techniques, and the Implications for MBA Teaching’,
Management Learning, Vol. 28 No. 2, pp. 217-233.
Neu, D., (1991) ‘Trust, Impression Management and the Public Accounting Profession’,
Critical Perspectives on Accounting, Vol 2, pp. 295-313.
30
Pike, R.H., and Neale, W., (1993) Corporate Finance and Investment: Decisions and
Strategies, Prentice Hall.
Pike, R.H., and Wolfe, M.B., (1988) Capital Budgeting in the 1990’s, CIMA, London.
Robson, C., (1993) Real World Research: A Resource for Social Scientists and PractitionerResearchers, Blackwell, Oxford.
Rose, E.L., Machak, J.A. & Spivey, W.A., (1988) ‘A Survey of the Teaching of Statistics in
M.B.A. Programs’, Journal of Business & Economic Statistics, Vol. 6 No. 2, pp. 273-282.
Sangster, A., (1993) ‘Capital Investment Appraisal Techniques: A Survey of Current Usage’,
Journal of Business Finance and Accounting, April.
Scapens, R.W., (1991) Management Accounting: A Review of Recent Developments,
MacMillan, London.
Seigel, G., & Kulesza, B., (1996) ‘The Coming Changes in Management Accounting
Education’, Management Accounting (USA), January, pp. 43-47.
Simons, K. & Higgins, M., (1993) ‘An Examination of Practitioners’ and Academicians’
Views on the Content of the Accounting Curriculum’, Accounting Educators’ Journal, Vol. 5
No. 2, pp. 24-34.
Spencer, C., & Francis, G.A.J., (1998a) ‘Quantitative Techniques: Do we practice what we
preach?’, Qualification News, 1998(1).
Spencer, C., & Francis, G.A.J. (1998b) ‘The Use of Quantitative Techniques By Accountants
in Practice and Training: An Empirical Study’ British Accounting Association National
Conference, Manchester April 98.
Stray, S., Naudé, P., Wegner, T., (1994) ‘Statistics in Management education’ British Journal
of Management, Vol. 5, pp. 73-82.
31
Tyrrall D.E., & Wrighton S., (1997) ‘Whither Accounting Education?’, Management
Accounting, November, p. 67.
Ward, M., (1997) ‘Fatal Addition’, New Scientist, 16 August, pp. 13.
Wegner, T., (1983) ‘A Survey of Quantitative Methods in South African Management’, South
African Journal of Business Management, Vol. 14 No. 3, pp. 120-124.
7.2
Syllabuses
Institute of Chartered Accountants in Australia. Education handbook 1996: professional year
programme.
Institute of Chartered Accountants in Ireland. Syllabus: professional examination two and
three, for examination 1996.
Institute of Chartered Accountants in Ireland. Syllabus: final admitting examination, for
examination 1996.
Institute of Chartered Accountants in New Zealand. Admission to the College of Chartered
Accountants: information update, ICANZ.
Institute of Chartered Accountants of England and Wales. Examinations conduct and
syllabuses: intermediate, until May 1996; final, until July 1997.
Institute of Chartered Accountants of Scotland. Syllabus 1996/97.
New Zealand Society of Chartered Accountants. Admissions policy. NZCA Education
Committee, 1994.
New Zealand Society of Chartered Accountants. The body of knowledge, NZCA Education
Committee, January 1992.
32
New Zealand Society of Chartered Accountants. Log book.
The Provincial Institutes of Chartered Accountants in Canada and Bermuda Syllabus for entry
to the chartered accountancy profession, issued 1995 effective for the 1996 Uniform Final
Examination.
Public Accountants and Auditors Board (South Africa). Manual of information for the
guidance of registered accountants and auditors, 1996.
Public Accountants and Auditors Board (South Africa). The education requirements of the
Public Accountants and Auditors Board, Johannesburg 1993.
33
Appendix A:
Technique
Fractions, percentages and
ratios
Index numbers
Powers and roots
Annuities and perpetuities
Formulation and solution of
linear equations
Break-even analysis
Inventory control/analysis
Formulation and solution of
polynominal equations
Learning curves
Calculus
Logarithms
Probabilities and expected value
Simulation techniques
Bayesian statistics
Game theory
Markov chain
Queuing theory
Decision trees
Linear regression
Forecasting
Moving averages
Econometric models
Multiple regression techniques
Time series analysis
Correlation coefficients
Standard deviation
Basic statistics and graphs
Analysis of variance
Normal distribution
Sampling
Quality control
Hypothesis testing
Confidence intervals
Green et Kathawal Coccari Drury et
al 1977
al 1993
a 1988
1989
n=296
n=36
n=75 (total, breakdown between groups not n=78
n=226
n=900? N=288
given)
Employer Lecturers Expatriate Expatriate Expatriate Expatriate USA
USA
USA
UK
s UK
UK
s in DCs s in DCs s in LDCs s in LDCs
(USA)
(Not USA) (USA)
(Not USA)
100
100
This study 1998
47
71
57
Alpander 1976
Wegner Forrester Juritz et Wisniewsk Østergaard
Naudé et al 1997 6
1983 1
1984 2 al 1988 3 i 1990 4
1993 5
n=164
n=65
n=639
n=408
n=172
South
Africa
UK
South
Africa
EU
Denmark
UK
South
Africa
New
Zealand
20
22
15
8
10
11
29
31
20
13
25
11
7
4
7
14
5
13
16
7
9
94
97
94
60
35
65
20
91
68
78
25
58
19
14
84
58
42
94
50
67.6
67
27
30
45
63
38
65
38
44
64
70
48
50
40
40
15
30
22
30
9
8
3
94
97
72
84
36
31
24
46
77
68
26
23
22
39
51
29.3
10
15
16
20
54
32
60
17.6
96
15
32
30
36
44
55
59
89
94
88
86
87
72
81
85
89
54
16
30
37
35
52
25
80
65
75
32
20
40
25
54
84
91.2
34
Chi square testing
Contingency tables
Nonparametric tests
15
78
48
48
12
3
35
12
4
11
2
Appendix A continued
Technique
Linear programming
Non-linear programming
Venture analysis
Dynamic programming
Marginal analysis
Inferential methods
Network models/analysis
Production and scheduling
models
Maintenance and repair models
Goal programming
Factor analysis
Discriminant analysis
Canonical analysis
Experimental design
Cluster analysis
Exponential smoothing
Integer programming
Multi-dimensional scaling
PERT/CPM
Transportation model
Data collection and presentation
Sample survey design
Multivariate models
Green et Kathawal Coccari
al 1977
a 1988
1989
n=296
n=36
n=75 (total, breakdown between groups not n=78
n=226
n=900?
given)
Employer Lecturers Expatriate Expatriate Expatriate Expatriate USA
USA
USA
s UK
UK
s in DCs s in DCs s in LDCs s in LDCs
(USA)
(Not USA) (USA)
(Not USA)
28
89
40
15
83
64
23.5
37
45
35
24
32
20
26
10
24
8
39
20
15
20
5
This study 1998
Alpander 1976
Drury et Wegner Forrester Juritz et Wisniewsk Østergaard
Naudé et al 1997 6
1
2
3
4
5
al 1993 1983
al 1988
1984
i 1990
1993
N=288 n=164
n=65
n=639
n=408
n=172
UK
South
Africa
UK
37
33
83
51
29
28
27
11
60
34
51
34
18
8.7
70.6
76
South
Africa
EU
Denmark
12
20
20
29
28
28
70
20
18
17
29
0
40
UK
South
Africa
New
Zealand
20.5
44
1
1
2
73
13
9
73
13
4
58
14
3
36
64
29
33
79
39
Note 1 Based on a 5 point scale of no-little-moderate-frequent-extensive use. Reflects percentage replying to frequent or extensive.
Note 2 Based on a 4 point scale of none-peripheral-much-extensive. Reflects percentage replying to much or essential. Quoted in Naudé et al 1997.
Note 3 Percentage indicating routine usage.
Note 4 Percentage indicating high frequency of use. Quoted in Naudé et al. 1997.
Note 5 Based on a 4 point scale of not available-never-occasional-frequent. Reflects percentage replying occasional or frequent. Quoted in Naudé et al 1997.
Note 6 Based on a 5 point scale of no-little-moderate-frequent-extensive use. Reflects percentage replying to frequent or extensive.
36
Appendix B: Raw questionnaire results - Employers
1.
In your opinion, for a newly qualified management accountant, how important is ability in the following.
(Please rate from 1= Unimportant to 7= Essential)
Unimportant
1
2
3
%
%
%
0.3
0.7
Analysing data looking for trends and patterns
4
%
2.0
5
%
9.5
Essential
6
7
%
%
28.5 59.0
-
3.7
7.8
20.7
25.1
21.7
21.0
Selection of an appropriate sample size; for example when test
checking quality standards in products
2.0
8.1
13.6
28.1
27.8
13.6
6.8
Solution of problems with constraints; for example an optimal
production plan given scarcity of labour and materials
-
2.0
7.1
17.3
29.5
26.4
17.6
0.3
1.4
2.4
5.4
22.4
26.9
41.2
Calculating the possible range of, and expected or average results
from projects.
-
1.7
4.4
13.9
26.5
31.6
21.8
Evaluating the reliability of results forecast by a model compared to
actual results; for example sales prediction models
-
-
5.4
16.7
25.2
29.9
22.8
Estimating straight line relationships between variables; for
example the relationship between variable costs and volume
-
1.7
3.4
11.5
26.8
30.2
26.4
Determining maximum and minimum points of functions; for
example the selling price which gives maximum profit
1.0
2.4
5.8
12.5
27.8
26.4
24.1
Formulating and solving problems as more complex equations; for
example y=axb for the learning curve effect
7.1
18.6
20.3
29.5
14.9
6.1
3.4
Compounding and discounting ; for example in discounting cash
flows or to find a monthly interest rate
Formulating and solving problems as simple equations; for example
Price variance =Actual Qty ( Std price - Actual price)
37
2.
Within your organisation as provider, supervisor or user of management accounting information how often
do you see the following mathematical techniques being employed?
Fractions, percentages & ratios
Powers and roots
Annuities and perpetuities
Formulation and solution of linear
equations
Formulation and solution of
polynomial equations
Calculus
Logarithms
Probabilities and expected value
Decision trees
Linear regression
Correlation coefficients
Standard deviation
Normal distribution
Chi squared testing
Linear programming
3.
Day
Week
Month
Quarter
Annual
Never
%
78.3
3.5
3.1
2.4
%
12.9
7.7
4.5
8.2
%
8.5
12.9
14.4
15.5
%
0.3
12.2
21.0
11.3
%
8.4
25.4
16.5
%
50.9
27.5
40.2
Don’t
Know
%
4.5
4.1
5.8
0.7
1.4
3.7
4.8
11.2
66.0
12.2
1.4
0.3
4.8
2.7
1.0
0.7
1.4
2.0
0.7
0.7
1.0
0.3
13.0
10.0
2.4
2.4
4.1
3.7
1.0
1.7
2.1
1.7
21.2
16.5
11.0
7.5
11.5
10.8
2.1
5.2
5.5
4.8
24.3
20.3
13.1
13.0
18.0
18.6
4.1
4.5
7.5
6.5
18.5
16.8
18.2
17.8
16.9
21.4
5.5
13.4
75.0
80.5
16.1
28.2
48.8
52.1
42.7
39.3
75.7
66.0
7.5
5.8
2.1
5.5
5.5
6.5
5.4
4.1
11.0
8.6
Please indicate your views on the statements given below, where 1= strongly disagree and 7= strongly agree
Strongly Disagree
1
2
3
%
%
%
4
%
5
%
Strongly Agree
6
7
%
%
In the modern role of a management accountant,
concepts are more important than detailed calculations
5.1
10.9
10.9
24.9
29.7
13.3
5.1
Management accountants need strong mathematical
skills
0.3
2.4
9.1
19.6
30.4
26.0
12.2
The modern role of a management accountant requires
business skills more than technical skills
1.0
4.4
7.1
27.8
26.4
20.3
12.8
Today’s management accountants do not make full use
of the mathematical techniques available to them
0.3
3.1
9.5
22.4
29.2
21.0
14.6
The day to day role of the management accountant only
requires basic numeracy skills
25.3
26.0
16.6
9.8
13.2
6.1
3.0
7.8
13.2
13.2
13.2
25.8
18.3
8.5
3.5
15.6
18.1
40.6
15.3
5.2
1.7
3.6
7.9
15.1
52.5
14.0
3.6
3.2
New technology has dramatically reduced the
mathematical skills needed by a management
accountant
Newly qualified management accountants have weak
mathematical skills
Mathematical ability in newly qualified management
accountants has fallen over the last 5 years
4.
Please use this space to add any additional comments you may have relating to the mathematical skills
needed by management accountants (please continue on a separate piece of paper if necessary)
38
See Appendix D for content analysis of written comments.
5.
6.
7.
Within which business sector do you work?
%
Public sector
18.1
Manufacturing
44.0
Other....................................... 18.4
specify)
Financial
Service
Which best describes your position within your organisation?
%
Chief executive
1.7
Management accountant
Director
6.1
Financial analyst
Finance Director/Deputy
36.5
Assistant Financial accountant
Financial controller
23.9
Assistant management accountant
Manager
9.2
Consultant/Member in practice
Financial accountant
2.4
Academic
Other ..........................................
5.5
(please specify)
What is the size of the organisation that you work for?
%
Small (less than 100 employees)
9.9
Medium (100-2500 employees)
57.0
Large (over 2500 employees)
33.1
39
%
6.5
13.0
(please
%
9.6
1.4
0.7
0.3
1.4
1.4
Appendix C: Raw questionnaire results - Lecturers
1.
In your opinion, for a newly qualified management accountant, how important is ability in the following.
(Please rate from 1= Unimportant to 7= Essential)
Unimportant
Essential
1
2
3
4
5
6
7
% % % % % % %
Analysing data looking for trends and patterns
0
0
0
0
14
17
69
Compounding and discounting; for example in discounting cash
flows or to find a monthly interest rate
0
6
0
6
14
22
52
Selection of an appropriate sample size; for example when test
checking quality standards in products
0
8
11
28
22
20
11
Solution of problems with constraints; for example an optimal
production plan given scarcity of labour and materials
0
3
8
8
36
28
17
Formulating and solving problems as simple equations; for example
Price variance =Actual Qty ( Std price – Actual price)
3
0
11
6
8
25
47
Calculating the possible range of, and expected or average results
from projects
0
0
0
14
17
28
41
Evaluating the reliability of results forecast by a model compared to
actual results; for example sales prediction models
0
3
3
6
37
28
23
Estimating straight line relationships between variables; for example
the relationship between variable costs and volume
0
0
6
11
23
31
29
Determining maximum and minimum points of functions; for
example the selling price which gives maximum profit
5
11
17
17
11
25
14
Formulating and solving problems as more complex equations; for
example y=axb for the learning curve effect
17
17
14
11
16
19
6
40
2.
In your opinion, what level of ability should a management accountant possess in applying the following
mathematical techniques. (Please rate from 1= None: no need to even be aware of the technique to 7=
Expert: Complete understanding and ability to apply in a range of circumstances)
Fractions, percentages & ratios
Powers and roots
Annuities and perpetuities
Formulation and solution of linear
equations
Formulation and solution of
polynomial equations
Calculus
Logarithms
Probabilities and expected value
Decision trees
Linear regression
Correlation coefficients
Standard deviation
Normal distribution
Chi squared testing
Linear programming
3.
None
1
%
0
0
3
0
0
6
0
6
0
3
0
11
0
15
3
25
3
32
34
28
19
15
31
16
Expert
7
%
78
29
29
14
17
25
19
17
8
8
6
25
33
6
6
0
0
0
0
8
3
17
25
0
0
3
11
6
6
14
8
19
22
8
6
8
0
14
22
33
14
16
6
3
6
22
29
19
14
8
23
11
8
40
44
28
25
25
28
11
19
6
0
20
33
33
29
17
11
20
14
6
6
23
5
6
6
19
19
6
19
2
%
3
%
4
%
5
%
6
%
Please indicate your views on the statements given below ( Please rate from 1= strongly disagree and 7=
strongly agree)
Strongly
Disagree
1
2
% %
3
%
4
%
5
%
Strongly
Agree
6
7
% %
In the modern role of a management accountant, concepts are more
important than detailed calculations
0
6
11
20
23
11
29
Management accountants need strong mathematical skills
0
3
11
22
22
22
20
The modern role of a management accountant requires business
skills more than technical skills
0
3
3
28
26
20
20
Today’s management accountants do not make full use of the
mathematical techniques available to them
0
8
8
25
20
22
17
The day to day role of the management accountant only requires
basic numeracy skills
23
25
6
9
20
11
6
New technology has dramatically reduced the mathematical skills
needed by a management accountant
11
8
11
6
22
25
17
Newly qualified management accountants have weak mathematical
skills
6
11
3
37
23
11
9
Mathematical ability in newly qualified management accountants
has fallen over the last 5 years
6
9
3
28
26
14
14
41
4.
Please use this space to add any additional comments you may have relating to the mathematical skills
needed by management accountants (please continue on a separate piece of paper if necessary)
See Appendix D for content analysis of written comments.
5.
Within which education sector do you work?
%
51
37
Public sector
Private sector
6.
Freelance
Other.......................................
(Please specify)
%
12
0
Which best describes your position within your organisation?
Professor
Principal/Senior lecturer
Lecturer
Other ..........................................
(Please specify)
%
3
40
26
0
Director
Consultant/Member in practice
%
31
0
7. Which papers do you teach?
FAF
%
22
CQM
%
36
ECN
5
11
BSN
%
22
FNA
8
OCA
39
MSA
36
LAW
6
FRP
8
MAA
42
OMD
17
TAX
3
SFM
33
SMM
25
IFM
6
MCS
25
42
Appendix D
- Content Analysis of Written Comments
Number of respondents
Employers
Lecturers
ROLE OF MATHEMATICS
Accountants need good basic mathematical skills
Standard of mathematical ability is declining
USE OF TECHNIQUES
Accountants do not make full use of the mathematical techniques available
Accountants need to be aware of the range of techniques available and when to use them
Accountants must be able to apply techniques to REAL problems
Sophisticated models and techniques are not generally needed in practice
Ability in forecasting and modeling is important
Skills needed vary widely with the role
It is important to be able to carry out simple rough calculations
Many techniques are too difficult to apply in practice
IMPACT OF COMPUTERS
Computer software packages perform the majority of calculations needed
The interpretation of data is a key skill for accountants
Accountants need to understand the principles behind software calculations
Accountants cannot rely on software. They must still be able to carry out the underlying calculations
Accountants need to be trained in software skills
OTHER SKILLS
Accountants need to be able to understand the need of their business
Communication skills are important in the role of an accountant
43
27
2
3
0
5
28
7
8
5
4
2
1
0
2
1
1
1
1
0
0
20
18
12
6
9
2
4
2
0
5
10
1
5
1