Management Accounting: Time ripe for India to take leadership role, says CIMA President

India should soon step into a leadership role to embrace the best practices around management accounting and then transit into a global provider of such practices, said Andrew Miskin, President of Chartered Institute of Management Accountants (CIMA).

“Having a leadership (in management accounting principles) would not only be great for your internal economy, it will also be good for your accounting economy (outsourcing work),” Miskin told BusinessLine in an interview.

In 2014, the UK-based CIMA, the world’s largest professional body of management accountants, had created the Global Management Accounting Principles (GMAPs), which aims to guide best practices in the discipline.

Miskin highlighted that the ability to use global best practices in management accounting is also important for wealth creation in the country.

Management accounting, he said, was here to stay as it will make a significant difference in people’s ability in running successful organisations.

Asked if current day enterprises understood the value of management accounting, Miskin replied “not as much as they ought to”. The fault lies with everybody, he said, adding that CIMA was trying to find a solution to this issue and the GMAP was one such effort.

“Management accountancy is about communicating decision relevant information to create value. It’s more about analysis and decision — and that’s where the second wave of outsourcing is going,” he said. “Lot of transactional outsourcing has already happened or is being automated already by organisations. Where there is considerable opportunity now is the decision support area,” he added.

He also felt that it would be a mistake to believe that management accounting is good only for multinational enterprises (MNEs). Small entrepreneurial and local businesses will benefit more than MNEs because the latter have had to already deal with some form of management accounting, he said.

Miskin said that CIMA in India is in the process of trying to continue to sign pacts with more universities so that more people get trained, work with employers to help them understand the value of management accounting and to talk to the government for putting the right kind of legislative environment for management accounting.

Miskin expressed confidence that India would eventually have a leadership role (in management accounting) given that the country is going to emerge as one of the significant economies in the world.

“There is absolutely no doubt at all that the central gravity of the economy of the world is moving from somewhere in mid-Atlantic to somewhere kind of over the Himalayas,” Miskin said.

“Between China and India and also some Asian nations, this part of the world is going to dominate the world economy. You will have leadership roles in the same way as US, Japan or Germany has had leadership role.”

Miskin noted that India has over the last decade been successful in driving quality into its accounting processes and this has helped it retain outsourcing work.

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