17 March 2015

The financial crisis has created an opportunity for management accountants to add real value to governance and decision making, according to a former president of the Chartered Institute of Management Accountants (CIMA).

Speaking to some of Scotland’s leading management accountants at the Business School recently however, CIMA's immediate past president Malcolm Furber, FCMA, CGMA, said this could only be achieved by rethinking reporting practices.

In the joint event with the School's Chair in Accounting Governance & Social Innovation, Professor Paolo Quattrone, Furber shared his own experience of organisations’ integrated reporting adoption, the challenges this presents and the changes they are making.

Malcolm Furber said:

“During all my corporate interactions in the integrated reporting arena I have been asked more about the value added perspective than anything else.

“I always emphasise ‘reporting’ as opposed to producing an integrated report and the organisations that I have advised have all said that their executive reporting and meetings have now changed to reflect integrated thinking.”

Professor Quattrone, said:

“The global economic crisis has left financial institutions looking for answers. But we now understand accounting is no oracle or ‘answer machine'.

“Instead, management accountants need to seize the opportunity to demonstrate how numbers can be used to instil doubt and prompt wise judgment.

“To borrow a phrase from ancient Greek philosophy, they should adopt a more ‘maieutic’ focus on judgment and deliberation, to raise questions and facilitate discourse with stakeholders – particularly when dealing with unprecedented situations.

“Now is the time for the profession to deal with negative perceptions of ‘bean counters’ by demonstrating the value they can add in helping managers account for more than just financial matters and the bottom line.”

Attendees gained an understanding of how integrated reporting delivers a concise communication of an organisation’s strategy, governance and performance.

They also learned how integrated reporting creates links between its financial performance and its wider social, environmental and economic context. Finally it was explained how integrated reporting allows organisations to create value over the short, medium and long term.