A message from Arleen R. Thomas, senior vice president of management accounting
What is management accounting? Most of us studied it in our college accounting curriculum. When I was in school, I learned about cost accounting and optimizing inventory -- I still remember that blue textbook. Out of the classroom and worldwide, management accounting has become so much more. It expands upon our financial experience and encompasses relationships we've built with business owners to create sustainable success for organizations. Last week, I was monitoring products in a sales pipeline, considering the risks and developing contingencies -- not only one, but several -- so the AICPA can effectively react to multiple changes in the market. That's management accounting in action, and it's one of the ways I can bring value to the AICPA every day.
As you approach your employer about the Chartered Global Management Accountant designation, consider the value you bring to your organization. Find examples of how you're connecting the dots between all areas of the business and providing key insight that informs the decision-making process. Let your employer know how your broadened knowledge base, plus the ability to present and communicate information to stakeholders -- in addition to your CPA -- uniquely position you as a CGMA helping set the course for the future of your organization.
The CGMA might be new to your employer and colleagues, but your understanding of financial and nonfinancial business value is where you have proved you are a true asset to your organization. With the CPA, CGMA, you can showcase your skill set, highlight your experience and access tools, reports, news and resources and the CGMA community to learn and promote best practices, develop skills and network with peers. Visit CGMA.org to take advantage of these valuable resources.
Variance analysis gives finance chiefs a better way to measure and manage their company's financial performance, writes Thomas Conine Jr., president of TRI. The approach allows decision-makers to compare performance against their expectations in a range of categories. Learn more about financial-performance analysis at the AICPA Financial Planning & Analysis Workshop, scheduled July 12 and 13 in New York City.
Sixty percent of companies have adjusted their chief financial officer's role in the past year in response to legislative and regulatory changes worldwide, according to a survey by KPMG. Companies should monitor and coordinate compliance across business units to stay abreast of changes, KPMG said. Learn more about the changing role of the CFO at the AICPA CFO Conference, scheduled May 17 and 18 in New Orleans.
A comment letter from the AICPA recommends changes to a recently proposed internal-control framework from the Committee of Sponsoring Organizations of the Treadway Commission. Suggestions include clarifying the application of some concepts and giving examples of "minor" and "major" nonconformity with principles.
The AICPA published "White Paper: COSO 2012 -- Updated, Principles-Based, and More Guidance," available to AICPA members only, to help members understand COSO's proposed update of its Internal Control -- Integrated Framework.
Cash-flow management and liquidity have became top priorities for companies since the recession. Hammerson Chief Financial Officer Timon Drakesmith and Jones Lang LaSalle Global Treasurer Joe Romenesko discussed how corporate treasurers have responded to the challenge. "With deposit rates being so low and margins on borrowing increasing, it has become increasingly important to efficiently manage our cash to minimum levels to save interest costs," Drakesmith said.
Social network Pinterest could open opportunities for nonprofits to promote their mission, Nell Edgington writes. The website allows users to upload and share images. Nonprofits are especially good at communicating through pictures, Edgington writes. Plus, about 70% of Pinterest users are women, who are more likely to be interested in philanthropy.
Rio Tinto finance chief Guy Elliott and Honeywell Performance Materials and Technologies CEO Andreas Kramvis provided insight into how to tap into effective business strategies. Achieving growth requires matching performance to investment, they said. "You need to turn the problem on its head and say there really never is a shortage of capital -- there is a shortage of returns," Kramvis said. "If you achieve high returns, money will chase you." Meanwhile, research shows that companies that are willing to shake up their investments achieve higher results over time compared with those that pursue a consistent strategy.
General Mills is working to measure corporate social responsibility across a range of metrics, including water, waste, packaging and employee engagement, CSR Director Catherine Gunsbury writes. That helps keep the company focused on sustainability goals and deadlines. "We like measurements," she writes. "What is measured generates results."
Some companies are turning to the Internal Revenue Service to develop transfer-pricing agreements governing transfers and sales between business units. However, a report shows that the IRS is issuing fewer agreements and taking longer to do so. Companies that pursue such agreements might do so to mitigate audit risk, a lawyer said. Learn about other important topics that affect your international business at the AICPA International Business Conference, scheduled June 11 and 12 in Washington, D.C.
Strategic thinking is a skill that can be learned and practiced, Paul Schoemaker writes. He describes six habits that leaders can cultivate to make themselves a strategic asset to their company: anticipating, thinking critically, interpreting, deciding, aligning and learning.
Workers leave companies because they're sick of their bosses, former Honda Motor executive Tim Garrett writes. That means it's vital to train managers at all levels to treat talented workers well, help them add skills and build authentic relationships with people. "Teach your managers to discover and tap into all their potential. ... Or teach them to love sourcing and interviewing candidates to replace them," Garrett advises.
Research shows that taking a break from smartphone use can improve productivity and morale, Ndubuisi Ekekwe writes. "Business will not collapse if we don't respond to e-mail at 11 PM," he notes. In fact, waiting until the morning can give you time to think through a problem and make a better response.
A move by the Small Business Administration to broaden its definition of small businesses might mean companies will face more competition for federal contracts designed for small companies. "A lot is riding on whether a business can maintain a position as small," federal contracting consultant William Spriggs said. Find more information about the SBA at the AICPA's U.S. SBA Resource Center.
"20 Questions Businesses Should Ask About Privacy"
Privacy has become a significant business risk to organizations. As a result, businesses are looking for guidance. Business brief "20 Questions Businesses Should Ask About Privacy" covers key questions a business should ask with the aim of understanding privacy risk, implementing a privacy program, managing privacy risk and obtaining privacy assurance.
Call for nominations for Outstanding CPA in Government Award
The AICPA recognizes CPAs working at the federal, state or local level of government who contribute significantly to increased efficiency and effectiveness of government organizations and the growth and enhancement of the profession through the Outstanding CPA in Government Award. The nomination period for 2012 is open. Download an application, and submit it by May 11.
AICPA submits comment letter on GASB's financial-projection proposal
In a March 16 letter, the AICPA's State and Local Government Expert Panel strongly encouraged the Governmental Accounting Standards Board to categorize proposed components of information intended to assess a state or local governmental entity's fiscal sustainability as supplementary information rather than required supplementary information. The AICPA recommended that GASB provide criteria for when such supplementary information would be voluntarily included. GASB released the document "Economic Condition Reporting: Financial Projections" on Nov. 29 for comment. AICPA members testified at a GASB public hearing March 29 on this topic.
American Institute of CPAs
is the world’s largest member association representing the accounting profession, with more than 412,000 members in 144 countries, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for the profession and U.S. auditing standards for private companies, nonprofit organizations and federal, state and local governments. It develops and grades the Uniform CPA Examination, and offers specialty credentials for CPAs who concentrate on personal financial planning; forensic accounting; business valuation; and information management and technology assurance. Through a joint venture with the Chartered Institute of Management Accountants, it has established the Chartered Global Management Accountant designation, which sets a new standard for global recognition of management accounting.