The Chartered Institute of Management Accountants (CIMA) has 34,000 members (now known as Chartered Management Accountants), who are found in all kinds of employment from manufacturing and engineering businesses to retailing and service organizations and the computing and data processing industry. Management accountants have a different role from that of chartered accountants because they are 'insiders', providing information for the management of the business. Their figures are for their firms to use straight away, so that everyone concerned knows how well things are going all the time.
According to CIMA, management accountancy is all about maximizing resources and creating opportunities. CIMA identifies five major areas of the management accountant's work:
- to produce meaningful information which can be used to determine whether resources are being used efficiently and activities provide value for money
- to design and manage the systems which produce the information
- to play an active role in the management team in planning strategy budgeting, financial management and control
- to review systems and operations and recommend improvements
- to manage change
It is important for cost and management accountants to know what is going on in the outside world as well as in their own particular companies. They have to know the economic climate, what competitors are doing, past and present trends in costs and interest rates, new methods and equipment, and new accounting techniques and procedures.
The Institute's examination system consists of four separate exam stages and three years' carefully monitored practical experience. Each stage leads on naturally to the next one and builds on what has been learnt in the previous stage. Most CIMA students combine work and study through a training post with an employer. Emphasis is given to information management because this is seen as the key role of the management accountant information provider and analyst. Employers are the main source of professional development because they can provide the relevant education and experience and because their commitment and support can prove invaluable.
'A person who has the CIMA combination of education and experience has the potential to become a very good manager indeed.'
Case Study
Having taken a BA in Business Studies, Mark looked round for a firm that ran a CIMA training programme and finally joined a large international publishing company. At 27 he is finance director and company secretary of one of the company's most successful subsidiaries, a large publishing and information outlet with over 17,000 employees.
Management accountancy was a natural choice as it is relevant to industry. The idea of moving from one audit to another did not appeal I wanted to identify with one firm and grow with it. Studying for the CIMA exams enabled me to do just that. I chose day release as my method of study and was given plenty of time off for revision. The training programme combines theoretical and practical work with the theoretical supplementing the practical This stopped me from becoming bogged down with study and led to a greater understanding of what I was actually studying.
I enjoyed studying because of the varied training and flexibility. It involved many subjects that I had not encountered before, and I found that law, tax, marketing and economics opened the door to new ideas and thoughts. It gave me a feel for management and certainly helped me when I became company secretary dealing with issues I had never come across previously.
I passed all my exams and covered the required three years' experience in just two years. I managed this because of the exemption I was given for my business course and the sandwich year which counted towards my practical experience. The training was comprehensive and the mixture of theoretical and practical experience was both stimulating and interesting. Hard work was rewarded with salary increases on passing each stage. When I passed Stage 4, I was given a company car plus a 40 per cent pay rise. When I'd completed my exams and done the practical work, I decided to stay with the company because of the fine training I'd been given there, and so I applied to become a CIMA member.
When you're studying you wonder when you'll be able to put all you've learnt to practical use. But as time goes on and you gain more responsibility, the relevance of the theory starts to become apparent.
I now have more time for my outside interests which are car rallying, photography and community care. In 10 years I see myself in a senior financial job or in general management. Yes, I feel all that training has been worthwhile.
Chartered Institute of Public Finance and Accountancy
The Chartered Institute of Public Finance and Accountancy (CIPFA) is the only accountancy body specifically designed for public service financial management. Members work in local government, the health service, the water industry, the nationalised industries, the Civil Service and many other public bodies, such as housing associations, colleges and universities. So its qualification enables you to work in many different fields. It is easy to change your job for promotion and to widen your experience, how and when you choose.
CIPFA point out you could be doing anything from organising funding for the reclamation of old tin mines to helping health care professionals manage medical resources. Radical changes in the way public services are provided mean that they need more and more talented financial managers. Information technology now copes with much of the routine work, but it produces quantities of information that need analysis for the decision-making process.
Good financial management helps to make sure that the public gets good value and the best possible services. The work can often have a very high, perhaps uncomfortably high profile, because the results can affect almost all of us. The CIPFA qualification is recognised as guaranteeing a high level of competence and relevant experience.
There are four stages to the CIPFA qualification, the first three consisting of four subjects with a written exam and assessed coursework for each stage. At the final stage every student has to produce a project on a relevant financial topic that tests the ability to plan, carry out and review. There is also a case study tested under exam conditions. As well as passing the exams, students must have at least 400 days' validated work experience from at least two of the four CIPFA approved areas. Employers guarantee to provide this variety of experience.
The emphasis is on practicality and relevance, rather than academic divisions. For example, the private and public sector are not dealt with in separate modules but are compared and contrasted within every module. Similarly, information technology and analytical techniques form part of practically every module.
The new syllabus reflects the growing commercial element in public services and the increasing demand for skills previously associated with the private sector.
The accountant of today is much more outgoing than the backroom counterpart of the past. There is a need for a greater understanding of what is being proposed, be that a recycling scheme or an arts project.'
Case Study
Cheryl Taylor left college with 12 'O' levels. She joined the Southern Water Authority as a trainee accounting technician and after qualifying as an accounting technician, became a trainee accountant with CIPFA. She passed her exams and is now fully qualified.
With 12 'O' levels, I wasn't sure what to do next? So, I started my 'A' levels. When the Southern Water Authority advertisement came up I decided to apply. I had always liked maths, and was considering a career in accountancy so this post seemed too good an opportunity to miss. It offered training to become an accounting technician with the possibility of further accountancy training.
The three-year accountancy training gave me a good basic grounding in accountancy skills. At the same time I did 'A' levels by correspondence course. What with work and the two kinds of study I didn't have much free time!
After qualifying as an accounting technician, I was fortunate to be offered a CIPFA training position. Because of my previous course I didn't have to do the foundation course and went straight into Part 1. My training was block release. The structure of the course meant that it was difficult for me to have specific duties at work so instead I was given one-off projects that provided me with varied experience in budget preparation and monitoring.
While I enjoyed the entire course, the third-year project was easily the most challenging part. My office tutors helped me choose the topic, a critical review of budget preparation, but I had to pull it all together and prepare a presentation for my three interviewers. Still, I honestly prepared the presentation and grabbed the chance to explain my work.
Southern Water supported me through my training by sending me on additional management courses. When I passed my exams, I was thrilled to receive fourth prize nationwide. At the age of 241 now have two professional qualifications which give me a lot of scope for development. One of the best things about being a school-leaver trainee was that, through my two training courses, I had an extended period of work/study, something I wouldn't have experienced as a graduate.
Currently I am working on the technical side, monitoring performance and doing budget preparation on the holding accounts for cost and plant and vehicle accounts. In future I can see myself moving into more of a management role and possibly specialising in systems accountancy. For the moment, though, I am happy enough not studying for the first time in six years, now I only have a full-time job!
