Effective Management Accounting

Effective management accounting practices can improve decision-making productivity in companies and accelerate companies to reach their business goals. To achieve effective management accounting, we need a universal guidance which could help companies achieve effective management accounting and make better decisions, respond appropriately to the risks we face, and protect the value we generate. However, according to the American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CIMA), management accounting has lacked a universal guidance that can be consistently used worldwide. Therefore, the AICPA and the CIMA conducted a research in order to create “The Global Management Accounting Principles” that can be universally applied in companies from large to small, public to private for this era of business in order to fulfill their business goals. According to the report of “White Paper: Global Accounting Management Principles”, the research team of AICPA reached out and consulted with a wide selection of stakeholders all over the world, which included senior finance and non-finance executives, global employers, and CIMA’s international membership base. The research was undertaken in three phases, including face to face interviews, roundtables, and an online questionnaire (AICPA 1). As a result, after the public consultation process, the research team created “The Global Management Accounting Principles”, which is the new principles that meet the needs and qualification desires of the global employers. The hope and purpose are that by following the principles, companies are more anticipatedly to achieve effective management accounting. And by achieving effective management accounting, companies are more likely to reach their business goals. The four principles are Influence, Relevance, Analyze, and Trust. With a large number of respondents in the research mentioning the need for ethical behavior to be made more prominent, the principles articulate the accountability, credibility, integrity, and ethics of management accountants. As a result, most of the current employers believe that ethical behaviors are core to a company’s success since people are a company’s most important non-financial value-creating factor (AICPA 7). By conducting a universal consultation research that gathered representation of both public and private sectors all over the world, the principles have influential universal applicability. The principles benefit the employers in various ways. First, if the employers follow the four principles, it can possibly improve the business firms’ overall decision-making productivity, which on the other hand lowers the business firms’ failure of risk predicting. Additionally, the principles also provide prospective management accountants a reliable suggestion of which values, skills, and abilities that they should put more effort in and cultivate in order to satisfy the employers’ needs and help achieve effective management accounting. Furthermore, the research method that the AICPA research team performed creates a model for other researchers from both inside and outside the field of accounting. That is, by approaching a research with a global consultation strategy in order to gather universal opinions from both public and private sectors, the result of the research contributes to an industrial efficiency and raise the reliability of the research at the same time, which further boost the value of the research and the research result.