Professor Janek Ratnatunga, a leading Australian scholar in the field of management accountancy tells Joyce Njeri the importance of having a CMA – Australia qualification in today’s cutthroat business marketplace…
Q. In today’s competitive job market, a credential next to one’s name can help their resume stand out. Why is it important for accounting students to gain a CMA – Australia qualification? What does your programme offer to stand out from the crowd of other training providers?
A. Companies rely on quality strategic analysis to be able to confidently chart a future course. The management accountant is one of the CEO and company’s board most valuable advisers in this regard – they go beyond the numbers and bring together the best intelligence; leading indicators from within and outside the business. Without this information and analysis, it’s akin to one flying blind.”
As a management accountant you work hand-in-glove with the manager of a business, providing them with both the numbers and assessment of other forward leading indicators to help them set the course for the future – the financial world’s equivalent of being an architect and of designing a house to stand strong in all future conditions.
The CMA-Australia programme is the only post-graduate level management accounting qualification in the world. You need to have a qualification in accounting to do this programme.
Often people are confused as to the differences in the role of a financial accountant versus a management accountant. Can you shed some light on this?
Financial accountants look at what has happened in the past, according to an assessment of the numbers, as opposed to what will happen, according to numbers and other variables. Management accountants are forward looking.
Take the analogy of a ship; the financial accountant is at the back of the ship studying the wake and telling the captain how the ship has passed through the water, while the management accountant is up the front of the ship and can see the iceberg ahead and informs the captain (the CEO) of the challenges ahead. The management accountant is like a navigator within the business, advising the CEO, who is ultimately the one who leads and takes the decisions.
Professional bodies focusing on financial accounting issues pay only lip-service to management accounting, which requires a totally different mindset.
Is it correct to assume that those with a certified public accountant (CPA) qualification would mainly focus on regulation and compliance, whilst those with a certified management accountant (CMA) qualification would concentrate on providing decision information to management?
This is by and large correct. Both roles are important. Regulatory accountants work in weeks and months; finance accountants work in years; management accountants work in minutes and seconds. If you need real time operational improvements that affect profitability, then you need to get a management accountant.
Following the global financial crisis, the market is tight, competition is fierce and there is very little money around which means you have to squeeze the most out of what you have. To be able to do that, you need real-time insights and advice. You need an expert who deals with leading indicators, not lagging indicators. Only a management accountant has the skills and expertise to provide this advice.
I don’t want to simply be told if the numbers are right or wrong. I want to know what it means for business planning. The management accountant interlinks all the different elements of the business and gives you a total picture. The fact they are involved in the functional areas of the business means they can tell you how the wheel of the company is turning; they can tell you what the numbers mean for the company, not just what it means for the budget. Their analysis and advice is critical for the successful operation of the business.
You have embarked on a major expansion plan, opening international centres that are offering CMA-Australia programmes in more than 12 countries including the UAE. As one of the growing professional qualifications, what do you think about Australia’s accounting education? On the same note, what are your expansions plans globally and in particular the Middle East?
It is true that ICMA Australia is on an expansion programme. But it is a controlled expansion. We work only through universities and specialist educational establishments like the Wisdom Group in Dubai. ICMA is actively involved in the delivery and assessment of the post-graduate level CMA programme.
Most other professional bodies concentrate on assessment only, leaving the training to private non-related institutions. Australia’s accounting education is considered ‘world-class’ and the ICMA was instrumental in getting management accounting recognised as a much needed skill for migration purposes. In the Middle East, in addition to the UAE, ICMA has a programme running in Lebanon and are now looking at launching courses in Egypt.
What has been the response regarding enrolment to your programmes in the UAE? Kindly give us the exact number of students who have done the CMA-Australia programme or are currently pursuing courses.
The CMA-Australia programme in Dubai has been a phenomenal success. We run the course twice a year in March and November, and limit the numbers to 40 participants per programme. We just completed our 11th intake. This means there are at least 250 CMA members in Dubai. As we insist that students have an accounting degree or a professional qualification in accounting with at least 5-years experience, the quality of participants is of the highest caliber.
Tell us more about the exams. What are the pre-requisites required for anyone interested in pursuing the Australia-CMA qualification. What is the certification or license procedure afterwards?
Licensing is a very American-centric term. Over in the USA even interior decorators, bread makers and dog washers need to be ‘licensed’. This is not the case in the UK or Australia. Our members are ‘certified’ after a rigorous training and assessment process at the post-graduate level.
Many universities embed the CMA programme within their masters in accounting or MBA programmes. As I said before, the pre-requisite is an accounting degree or a professional qualification in accounting with at least 5-years experience. Most CMA course participants have 10-20 years of senior level experience.
What attracted you to the profession of management accounting?
The fact that you are not simply waiting for things to happen and then just reporting on them, which is essentially what financial accountants do. It was the forward looking focus of the profession and the task of creating value and helping to set a strategic course; you get to see the fruits of your labour in that you get to see your advice translated into actions and then into outcomes. Helping to run a better business, that is very rewarding.