Gauging the Impact of Country-Specific Values on the Acceptability of Global Management Accounting Principles

Abstract

JEL Classification: M40 1. Introduction In 2014, the AICPA and Chartered Institute of Management Accountants (CIMA) published a draft document entitled Global Management Accounting Principles, including the subtitle Effective management accounting: Improving decisions and building successful organisations (AICPA and CIMA, 2014a) The draft was accompanied by a shorter checklist (AICPA and CIMA, 2014b) and a document on essential tools of the Global Management Accountant (AICPA and CIMA, 2013). This publication represents the most significant step to date toward establishing and integrated set of international accounting standards regarding the objectives of management accounting professionals. (Borker D. R., Manuscript) The standards are closely tied to CIMA's professional certification program for the Chartered Global Management Accountant. It should be noted that, with regard to methodology, there is considerable overlap between the professional tools cited in this document and the best practices cited by the Institute of Management Accounts (IMA) in its professional handbooks and teaching materials for the certification Certified Management Accountant. What distinguishes the CIMA/AICPA document is that it develops a set of key concepts and principles that Global Management Accounting Principles (GMAP) in much the way the IASB established concepts and standards for external financial reporting. According to its authors, the purpose of the document is to support top executives and the Board of Directors in benchmarking and improving their management accounting systems, providing a reference for all management accountants to check that they are adding value for their internal and external customers, helping organizations to make better decisions, to respond appropriately to the risks they face and to protect the value they generate. (AICPA and CIMA, 2014a) An underlying theme throughout the document is the key role of management accounting and the management accountant in helping organizations to achieve sustainable success using appropriate and continually refined tools, techniques and diagnostics and people skills to help organizations assess the effectiveness of their management accounting functions and identify areas for improvement. The document describes four global management accounting principles and fourteen Practice Areas of Management Accounting to which principles are applied and for which related skills and tools are required on a comprehensively updated basis. Four Global Management Accounting Principles The four principles, which are noted to be "continuous" rather than "sequential" in nature, are cited below along with their connected subheadings: * Communication provides insight that is influential --strategy development and execution is a conversation --communication is tailored --communication facilitates better decisions * Information is relevant --information is the best available --information is reliable and accessible --information is contextual * Impact on value is analysed --simulations provide insight into options --actions are prioritised by their impact on outcomes * Stewardship builds trust --accountability and credibility --sustainability --integrity and ethics These broad principles, as described in the document, paint a picture of the management accountant as a capable and reliable key analyst, diagnostician and communicator within the organization who is influential in the creation of value for the organization and its many stakeholders. Fourteen Practice Areas 1. Cost transformation and management 2. External reporting 3. Financial strategy 4. Internal control 5. Investment appraisal 6. Management and budgetary control 7. …