The finance and accounting sector in India has seen its fair share of ups and downs. But the greater threat yet to be faced by finance professionals will be in the form of integration of disruptive technologies such as automation and AI if they do not reskill.
The doors to wisdom are never shut, which is why one must never stop learning. IMA, short for Institute of Management Accountants, celebrated 100 years of service in Bengaluru last month. On this occasion, the President and CEO of IMA, the association for finance and accounting professionals, Jeffrey C. Thomson interacted with IBTimes India Editor Nagesh Narayana on some of the pressing matters that should concern finance professionals out there.
You can read excerpts from our interview with Mr Thomson, who touched upon various topics such as the benefits of IMA's Certified Management Accountant program and what finance professionals must do as digitalization and AI takes over the world.
IB Times India: Can you give a brief idea about CMA and how it's different from CA that we have in India?
Jeffrey Thomson: Due to the influx of disruptive technologies such as automation and AI, traditional accounting roles that exist today may not exist in a few years. Many accountants, auditors and financial analysts who seek to enhance value creation in their professions go on to earn a CMA (Certified Management Accountant) certification to advance in their careers. A CMA is an accounting or finance professional who works in the areas of financial planning, analysis, and management decision-making. The CMA credential has specific education and work experience requirements. The value creation essential allows CMAs to get a broader, more operational view of business functions (thereby moving beyond the prism of finance and accountancy functions) and use improved skills such as data management to better support decision-making, formulating, and implementing a strategy. CMAs are, therefore, able to deliver strategic value in technologically enhanced and increasingly automated workplaces and assume leadership positions.
In this sense, the CMA function is markedly different from the more traditional Chartered Accountancy function which is more narrowly-focused on traditional accounting including audit, tax, compliance, and statutory reporting. The CMA, however, is not restricted to just gaining mastery of the accountancy and finance management domains but also gaining greater operational understanding of cost management, corporate finance, economics, performance management, internal controls, decision analysis, financial reporting, strategic planning and organizational management, with the CMA 2020 exam adding technology and analytics as a practice area. It incorporates the study of four key areas that include: (i) business applications, (ii) business analysis, (iii) strategic management and (iv) management accounting and reporting.
IB Times India: What are your plans to make CMA an attractive option for Indian professionals and companies?
IMA's globally recognized CMA® (Certified Management Accountant) program is a relevant assessment of advanced accounting and financial management knowledge in critical areas such as financial planning, analysis, control, and decision support.
Professionals with advanced financial management skills are increasingly integral to business performance. Accountants and financial professionals need additional skill sets to evolve from "counters of wealth" to "creators of wealth" and influencers of strategy in organizations. Henceforth, IMA has been constantly working towards skilling the finance and accounting professionals in line with its commitment to building careers.
In order to make the CMA an attractive option for Indian professionals and companies, IMA's CMA program incorporates on-the-job knowledge and skills that the professionals need in this changing profession – now and in the future. Considering the shortage of professionals with appropriate skills, IMA is not only helping the professionals but also the employers in the best possible way. IMA is also tying up with institutes of higher learning to introduce the CMA module within their curriculum.
IB Times India: Can you elaborate on how you ensure CMA professionals practise ethics throughout their career?
IMA is committed towards the highest ethical standards and IMA continues to inculcate the same in CMA professionals. Advocacy of the highest ethical business practices has always been one of the key focus areas of IMA. Also, the professionals are evaluated on the basis of professional ethics during the examination.
At IMA, we house an Ethics Center which provides members with services, resources, and information on professional standards related to ethics. We also have an ethics hotline that our members can use when they encounter ethical dilemmas.
Recently, introduced a member benefit that provides members with one free ethics-related course for Continuing Professional Education (CPE) credits per year. The situations encountered in these classes help our members make the correct ethical decisions in the workplace.
IB Times India: In view of Satyam episode in India and ban on PWC-branded auditor firms (though lifted recently), how do you look at the future of accounting in India.
The Satyam scandal was said to be the largest accounting fraud in the history of corporate India and dubbed India's Enron, a reference to the American energy company that collapsed due to a mammoth accounting scandal.
While it did expose inadequacies of the country's corporate governance standards, the government moved in to overhaul the regulatory framework and introduce the new Companies Act 2013, which fixed liabilities of auditors and independent directors, among other changes. In 2014, market regulator SEBI also amended Clause 49 of listing guidelines to improve corporate governance. India today has numerous regulatory provisions to prevent such frauds from happening again. Overall compliance by India Inc has also increased substantially since then and thanks to the efforts by regulatory agencies, company boards themselves are far more vigilant against fraud. Great digitisation and simplification of the taxation process has also made monitoring and compliance easier. This has no doubt affected the accounting profession but regulatory compliances within the accounting profession have increased significantly as a result.
The future of the accountancy profession will to a large extent be dictated by technology. Automation, AI and machine learning are expected to drive significant changes within the profession. For finance and accounting professionals, the need of the hour is to widen their ambit of operations – by becoming business partners who are able to enhance value creation and have much greater visibility of operations functions across the value chain.
IB Times India: In view of artificial intelligence and digitalization, how do you see the future of CMA professionals?
With the advent of digitalization and dynamic technological advancements such as artificial intelligence, machine learning, blockchain and others, IMA believes that CMA professionals ought to constantly work towards upskilling themselves to be future-ready. While developing the skills, professionals will be able to remain relevant and add greater value within their professional ecosystem.
Additionally, finance and accounting professionals need to go beyond their traditional roles of reporting and stewardship to integrate finance, technology, and a comprehensive understanding of the market to deliver quality results as a trusted business partner. The professionals need to ensure that they have the competencies essential for competing in today's job market.
