1

CFO Executive Edge

“Driving Growth In Your CFO Team”
Critical Business Issue: CFO Gaps 2

Stakeholder
Globalization Sophistication Compliance

Demand

GAP Aspirations:
Partnering & Consulting
Supply -Skills
-Processes

Current Reality:
Transaction – Heavy
 3
The GAP was recognized in the 80’s
Have we made Progress?

“There is little doubt that the current content of professional accounting

education, which has remained substantially the same over the past 50 years, is
generally inadequate for the future Accounting professional. A growing gap exist
between what accountants do and what accounting educators teach…
Accountants who remain narrowly educated will find it more difficult to compete
in a expanding profession… The Committee’s analysis of accounting practice has
indicated that accounting education as it is currently approached requires major
adjustments between now And the year 2000.”

Source: Bedford Report, 1986

 4

Accountant’s Value Chain

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

Business
Data Information Knowledge Decisions
Events

Too Much Accounting Too Little Accounting

Educational Emphasis Educational Emphasis
 5
The GAP was recognized in the 80’s –
Have we made progress?

“The accounting profession faces a unique convergence of

forces, which creates a critical need to re-examine the
educational process. The profession is changing, expanding
and as a result, becoming increasingly complex”

These quotes cover a period of 11 years. Yet, the message is

the same. Corporate and public accounting firms are working
hard to transform themselves into finance professionals and
professional service firms. It is now accounting education’s
turn to transform itself.
 6

IMA’s 12 Year+ Quest to Address the GAP

Practice How to become

Analysis of a
Management Business Partner
Accountants

1994 1996 1999 2002 2008

What Corporate Counting More, Impact of SOX on

America wants Counting Less: Business Partners
in entry level Transformations in (Final Stages)
accountants MA Profession
 7
Evolution of Management Accountant’s
Work Activities
Work Activities Work Activities Work Activities
1995 1999 2002 - Present
Accounting systems and Internal consulting Customer and product
financial reporting profitability
Consolidations Long-term strategic Long-term strategic
planning planning
Accounting policy Computer systems and More partnering and
operations consulting
Short-term budgeting Process improvement More involvement with
operations
Project accounting Financial and economic More involvement in
analysis decision making
 8
1994 What Corporate America Wants in
Entry Level Accountants
Research Objective: Determine educational needs
of entry level MAs from Corporate America
perspective.

“The project committee is optimistic that Academic

America will respond to ‘corporate America’s needs and
again become leaders, teaching us how to build vibrant
corporate finance teams with in a highly competitive and
profitable corporate infrastructure:….

“Some executives began hiring graduates of 2- year

associate degree programs, arguing that their companies
could do a better job of preparing them for entry-level
positions than would a 4 year university program. “
 9
1994 What Corporate America Wants in
Entry Level Accountants
Key Research Findings:
• Universities not doing adequate job preparing entry level MAs
• Preparation GAP in AKSAs (Accounting Knowledge & Skill
Areas)
 10
1994 What Corporate America Wants in
Entry Level Accountants

Key Recommendations:
• Need identifiable educational track for MA
• Establish national forums involving
academia & corporations to develop a
“gap-filling” MA Curriculum
• Conduct Practice Analysis of MAs
 11
1996 The Practice Analysis of Management
Accounting

Research Objectives:
Develop database of MA knowledge, skills and abilities necessary
for competent performance for use by academics (curricula),
corporations (training) and accounting associations, (e.g.. IMA
CMA content specifications.)

“The practice analysis reflects the shift from number

cruncher and corporate cop to decision-support specialist
And reflects what it takes to compete in today’s
lean, global, technologically driven environment”
 12

The Practice Analysis of Management Accounting - 1996

 13

The Practice Analysis of Management Accounting - 1996

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1999 Counting More, Counting Less :
Transformation in the MA profession

Research objective:
Determine whether the work of MAs and their roles in companies
changed over the past 5 years and how this work will change
over the next 3 years.

“Corporations, for their part, adjusted to the public accounting

bias of university accounting education by providing extensive
training programs for their new accounting recruits.”
 15
1999 Counting More, Counting less :
Transformation in the MA profession
Key Research Findings:
 16
1999 Counting More, Counting Less :
Transformation in the MA profession
Key Research Findings:
 17
1999 Counting More, Counting Less :
Transformation in the MA profession
Key Research Findings:
 18
1999 Counting More, Counting Less :
Transformation in the MA profession
Key Recommendations:
Target Audience Recommendation

Accounting Educators Use Practice Analysis to fill the curricula gap (e.g.,
strategic planning, process improvement).

Corporations Use Practice Analysis for skills-based training. Get

more involved with academic community.

Accounting Associations Communicate with accounting students to dispel the

image of the “old” accountant focused on audit & tax.
Build meaningful & relevant curricula. Develop a
universally accepted title for the new org. role of
the MA
Management Accountants Develop your skills& obtain certification to satisfy
market demands.
2002 How to become a Business Partner 19
Research Objectives:
Fourth in a series of applied IMA research studies that focus on
the changes in accountants' work and work roles

“Work Activities that Will Increase in Importance”- Sources: Practice Analysis

of Management Accounting, 1996, Counting More, Counting Less, 1999
 20

2002 How to become a Business Partner

Research Objectives:
Fourth in a series of applied IMA research studies that focus on
the changes in accountants' work and work roles

How MAs can prepare for the change to
Business Partner:
Build the foundation
Develop excellent interpersonal skills
Develop informal communications with people
across the organization
Understand the business
Educate the organization
Transitioning strategies for the
business partner:
Show value-added analysis
Gain trust
Give high quality advice that promotes
solutions
Help the “financially challenged” understand
the information
Understand the needs of decision makers
Promote the value of financial advice
 2008 Impact of SOX on Business Partners 21
(Final Stages)
Key Research Finding:
• In many cases SOX has “fractured” the business partnering relationship.
• Small companies see SOX compliance as a non-value added cost: a major financial burden
• The burden of SOX compliance is more likely to fall on the management accountants in small
companies.
• Large companies see SOX compliance as an opportunity for progress improvement; full time
SOX staff minimizes burden on MAs.

Key Recommendations:
•Many MAs were initially unhappy about SOX assignments. In small companies, the grumbling
continues.
•They don’t like the work- some think about leaving the profession.
•In large companies, MAs have adjusted to their new roles. They may not like to do the compliance
work, but the grumbling has stopped.
•“Compliance is not optional”.
•The silver lining in SOX – go beyond SOX compliance and use their understanding of processes to
focus on process improvements
•SOX is NOT a solution to the problem of financial frauds.
•SOX is very costly, has improved controls, benefits not yet worth the costs
 Conclusion: 22
While “we” know much more about “The GAP”, the
community must do much more to satisfy the needs of
organizations and their stakeholders

Demand

Aspirations

GA P
Associations - ?
Supply
Academia - ?
Corporations - ?
Current Reality
Secondary Research : 23

Source: The CFO as Chief Performance Adviser

2005, CFO Research Services and
PricewaterhouseCoopers
Secondary Research : 24

Source: The CFO as Chief Performance

Adviser, 2005, CFO Research Services
and PricewaterhouseCoopers
 25
Secondary Research :

Source: The CFO as Chief

Performance Adviser, 2005, CFO
Research Services and
PricewaterhouseCoopers
 26
Secondary Research :

Source: The CFO as Chief Performance

Adviser, 2005, CFO Research Services
and PricewaterhouseCoopers
Source: The Agile CFO: A Study of 900 CFOs Worldwide, 2005
27
Source: The Agile CFO: A Study of 900 CFOs Worldwide, 2005 28
Source: The Agile CFO: A Study of 900 CFOs Worldwide, 2005 29
Source: The Agile CFO: A Study of 900 CFOs Worldwide, 2005 30
Source: The Agile CFO: A Study of 900 CFOs Worldwide, 2005 31
Source: Being the Best: Insights from leading finance functions, 2006 , KPMG and the Economist 32
Intelligence Unit Limited
 33
Source: Being the Best: Insights from leading finance functions, 2006 , KPMG and the Economist
Intelligence Unit Limited
Source: Being the Best: Insights from leading finance functions, 2006 , KPMG and the Economist
34
Intelligence Unit Limited
 35
Source: Being the Best: Insights from leading finance functions, 2006 , KPMG and the
Economist Intelligence Unit Limited
 36
Source: Being the Best: Insights from leading finance functions, 2006 , KPMG and
the Economist Intelligence Unit Limited