Each year I receive an honor to present at the Institute of Management Accountants annual conference. The speaker topics for this conference provide good indicators as to what the hot topics might be of the near future for the accounting profession. This year’s recent conference in Tampa, Florida highlighted two topics:
(1) The convergence of international and USA accounting standards. USA accounting has followed what is called generally accepted accounting practices (GAAP). These are rules-based and voluminous. Europe follows the International Financial Reporting Standards (IFRS) that are principles-based and therefore more brief. With globalization, the USA is shifting its financial reporting towards IFRS with less GAAP.
(2) Strategic cost management. The term strategic can be loosely attached to just about every aspect of an organization’s processes and activities. From a management accounting perspective, the reference to strategy involves selecting the vital few best performance measures, customer profitability and value reporting (which was my topic), and advanced budgeting that includes funding for strategic projects.
An additional highlight of this year’s IMA conference was the IMA’s Lifetime Award for Distinguished Contributions to Advancing the Management Accounting Profession given to Professor Robert S. Kaplan of the Harvard Business School. In his acceptance speech, Professor Kaplan reflected on how during his career his innovations, such as activity-based costing and the balanced scorecard, have introduced more scientific management theory to what we do each day.