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CMA Canada expands resources for management accounting research: management accounting research will nourish growth of CMA competencies and enhance the competitiveness of leading-edge organizations.

To foster the development of innovative management accounting tools and techniques and build member competencies, CMA Canada is dedicating expanded resources to management accounting research.

"Continuously expanding the conceptual boundaries of the profession by absorbing new developments that are compatible with the public interest and employer and client expectations of CMAs is a critical strategic imperative," says Steve Vieweg, President and CEO of CMA Canada. "Our research initiatives are founded on the CMA's unique blend of expertise in accounting, management and strategy."

He said interest in management accounting research has been driven by organizations looking for ways to enhance capabilities in areas such as strategic performance measurement, risk management, corporate governance, strategic cost management, and internal control.

Competitive Pressures

"Owing to increasing domestic and global competitive pressures, organizations became aware that their management information systems were generally driven by financial reporting systems that produced only historical financial information," he explained. "This lagging information proved irrelevant for strategic management and control decisions. The need was not only for more management accounting research, but for accessing new knowledge on a more timely basis."

In the early 1980s, CMA Canada started the development of an expanded territory for management accounting that moved far beyond the historical boundaries of budgeting, variance analysis and financial statement preparation. This new, enriched definition of the management accounting profession was supported by a substantially expanded research program that provided verification of the robust nature of emerging practices in this area.

Adopting New Practices

Since that time, CMA Canada research has generated a wide range of Management Accounting Guidelines and Standards. The Guidelines are publications that look at a management accounting issue from a strategic and management perspective. They identify new issues and the ways leading-edge organizations are adopting new practices. Management Accounting Standards focus on narrowly defined topics within three overarching categories--cost finding, cost using, and strategic management control. Unlike GAAP standards that are intended to allow comparisons among organizations, these standards are based on the tools and techniques needed to develop and evaluate internal decisions within individual organizations.

At present, CMA Canada has a library of 61 Guidelines and 50 Standards.

"As our management accounting research output has grown, other professional accounting bodies have sought alliances with CMA Canada," said Vieweg. "These organizations include the American Institute of Certified Public Accountants (AICPA), the Institute of Management Accountants (IMA), CPA Australia, the Institute of Chartered Accountants in England and Wales (ICAEW), the consortium of Advanced Manufacturers International (CAM-I), and the Malaysian Institute of Accountants. Our alliances have enabled our respective memberships to gain access to new and emerging management accounting practices, guidelines and issues papers, and generate additional funding for continuing CMA Canada research. This has positioned CMA Canada as the global leader in the development of the management accounting profession."

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In fact, he said, CMA Canada is participating in an international library research project through IFAC's Professional Accountants in Business (PAIB) Committee. The library will include CMA Canada's knowledge management publications.

Vieweg pointed out that a prime example of CMA Canada's research capability and innovative approach to addressing global strategic issues is the management accounting guideline on "Measuring and Improving the Performance of Corporate Boards."

Corporate Governance

"This guideline presents a unique approach to enhancing corporate governance and accountability in response to recent corporate scandals," said Vieweg. "Instead of simply recommending new rules, regulations and structural changes at the board level as other accounting organizations have done, we have provided a framework for applying the Balanced Scorecard concept to board decision-making."

He explained that the guideline applies the principles of the Balanced Scorecard to corporate governance to enable a board to understand the risks associated with its company's strategy, and put into place control systems to flag activities that could negatively impact the company and its stakeholders.

"It uses a mix of financial and non-financial performance indicators that address a company's internal business processes, shareholder financial interests, customer-value creation, and organizational learning and growth," said Vieweg.

CMA Canada has been holding a series of professional development seminars on corporate governance for CMAs in Toronto, Calgary, Vancouver and Halifax in partnership with the U.S.-based Balanced Scorecard Collaborative. The seminars apply CMA Canada's guideline on measuring and improving the performance of corporate boards in real-world case studies.

Successful Seminars

Vieweg said the seminars are a follow-up to similar seminars held in Toronto in November 2003 and February 2004, and with the AICPA in New York, Chicago and San Francisco in the fall of 2004. "Our seminars have attracted senior financial management professionals from a wide range of international business sectors."

CMA Canada continues to expand its series of Management Accounting Guidelines and Standards.

"We just recently published a new management accounting guideline on Evaluating Performance in Information Technology," said Vieweg. Produced jointly with the AICPA, CMA Canada's new guideline presents an invaluable resource to help organizations measure the return on investment in their IT systems.

IT Performance

"The guideline describes specific measures to track IT performance on inputs, processes, outputs, and outcomes," explained Vieweg. "It provides a comprehensive system for accounting and finance professionals that deals with the challenges of performance measurement and control in IT. The guideline is also intended to help CIOs, CTOs and senior IT managers better understand how information technology contributes to higher levels of corporate performance, more easily evaluate the profitability of IT investments, and make better resource allocation decisions."

Vieweg added that CMA Canada is partnering with the AICPA to develop additional management accounting guidelines. "One is a guideline on identifying and measuring risk for improved internal control," he said. "With increasing demands for significantly improved risk management, particularly from audit committees, better measurement tools are necessary. Our new guideline will provide tools and techniques to identify and measure risks in organizations, particularly in the area of internal control systems at the strategic and operational levels."

CMA Canada is also publishing five new Management Accounting Standards on database management systems, enterprise resource management systems, managing organizational change, supply chain management, and managing intellectual capital. Seven additional standards are in the planning stage.

"We are now looking at a range of new and emerging management accounting practice areas," said Vieweg. "Our plan in the coming years is to aggressively increase our management accounting research output."

Vieweg pointed out that CMA Canada's management accounting research programs are supported on a number of different fronts.

Centres of Excellence

"For example, we continue to expand our research capacity through the creation of innovative centres of excellence," he said. "Work continues at CMA Canada's Centre of Excellence in Management Accounting for Small and Medium-Sized Enterprises, which is based at Wilfrid Laurier University in Ontario. Through interaction between small and medium-sized enterprises, management accountants and university faculty, the centre is significantly expanding the body of knowledge on management accounting techniques, best practices and skills development for entrepreneurs and small business managers."

Similarly, he said. CMA Canada and Simon Fraser University have established a CMA Centre for Strategic Change and Performance Measurement. "This research centre is generating new knowledge related to three themes: strategic change and its execution, strategic performance measurement, and leadership and change management," said Vieweg.

He added that work also continues at the CMA International Centre for Studies of Business Processes, located at The Ecole des Hautes Etudes Commerciales in Quebec. The centre researches, analyzes and communicates contemporary and emerging best practices with respect to business processes internationally, as well as promotes better performance by participating companies. Current studies address e-business practices and cost and margin management practices.

Strategic Direction is published by CMA Canada

Editor

R. David Fletcher

Vice President, Public Affairs

e-mail: dfletcher@cma-canada.org

Art Director

Sean O'Rourke

CMA Canada

Mississauga, Executive Centre

One Robert Speck Parkway

Suite 1400

Mississauga, Ontario L4Z3M3

Tel: (905) 949-4200

Toll-free: 1-800-263-7622

Fax: (905) 949-0888

www.cma-canada.org
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Title Annotation:Society of Management Accountants of Canada
Publication:CMA Management
Geographic Code:1CANA
Date:Apr 1, 2005
Words:1303
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