A Management Accountant

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					   Financial Leadership and the
    Management Accountant –
Coping with An Uncertain Economic

             Jeff Thomson
          IMA President & CEO

            November, 2008
IMA – A Brief Background
  – Founded in 1919 – Entering our 90th Year!
  – Nearly 60,000 members spanning 125 countries
     • China and Middle East are the highest concentration of
       members outside of US
  – CMA Certification - internationally recognized
     • Over 30,000 CMAs worldwide
     • Exam and related materials translated into Chinese
  – Opportunities for students to participate through
    scholarships, awards and competition programs;
    creation of student chapter; networking with local
    chapter; attendance at student leadership conference
  – Over 1,000 members in China
  – Local contacts in China – Linda Li and Harry Liang
     Where Is The Economy Now

• Oil - $56.45 vs. recent high of $147.96
• Dow – 8,500 vs. recent high of 13,850
• USD to EURO - $0.80 versus recent low of
• Baltic Dry Index - 841 vs recent high of
  12,000. (BDI is a measure of the cost of
  shipping goods)
• China GDP growth declining from 11% to 8%
  and then 6%??
       The Past, The Present and the Future

US housing      Investor lack of        Bear Sterns                  Lehman Bros
market bubble   confidence              collapse                     collapse                 New risk &

       US Sub           Northern Rock                 Fannie Mae            Credit
       Prime collapse   collapse                      /Freddie Mac          market
                                                      collapse              squeeze

              On Going Issues

• Fair value accounting or mark to market
  concerns, issues and re thinking
• Difficult access to credit for all industries
  hurts investment and growth
• Fear of countries turning more inward to
  “protect themselves”
• How to properly manage risk and control
 The Role of The Management Accountant
Before, During and After the Current Crisis

• Before

• During

• After (the future)

Is now the time to be a management accountant?
     Questions to think about…

 What are some criteria for selecting a career?
 What does an accountant “do”?
What does a management accountant “do”?
 Is certification important?
 Why do I need to care about ethics?
 What should I do to prepare for my first job?
 The “Good Career” Checklist ….

 Is the market environment/profession
 Is there career growth vs. “just a job”?
 Are salaries competitive and growing?
 Am I helping to create growth in my
organization, looking forward - not
 Can I have some fun along the way?
Financial Leadership: What Does “It”
  •For the Young Professional: To grow as a
  professional with a cohesive set of hard and soft
  skills “tailored to my evolving needs”.

  •For the “Seasoned” Practitioner: To be a more
  influential finance professional regardless of
  position in the hierarchy of an organization.

  •For the Manager of Staff: To create a more
  influential CFO business partner team supporting
  implementation of the organization’s strategy.
 Roles of a Successful New Employee

 Team Player      Student

 Adapter          Resource Person

 Time Manager     Representative

 Diplomat         Dues Paying Member

 Investigator     Career Planner

                   Leader
What is Leadership - The Six “C’s” of
      Leadership Credibility
             The passion and commitment the person
Conviction   demonstrates toward his or her vision
             Consistent demonstration of integrity, honesty
             respect, and trust
             Demonstration of concern for the personal and
Care         professional well-being of others (building
             Willingness to stand up for one’s beliefs,
             Challenge others, admit mistakes, and change one’s
             own behavior when necessary.
             Consistent display of appropriate emotional
Composure    reactions, particularly in tough or crisis situations

             Proficiency in hard skills (technical, functional,
Competence   content expertise) and soft skills (interpersonal,
             communications, team and organizational skills)
                                FINANCIAL LEADERSHIP – A CONTINUUM (illustrative)
                                                                                                                                Investor and Customer
                                                                                                                                Relations (S)
                                                                                                                                Change Manager/Agent (S)
                                                                                               Cross-Functional Influencing
                                                                                               Skills (S)                       M&A, New Market and
                                                                                                                                Product Development (H)
                                                                                               Leading and Managing
                                                                                               Staff/Teams (S)
                                                                Learn the Business (S)
                                                                                               Process Management (H)
HARD (H) and SOFT (S) Skills

                                                                Collaboration, Influence (S)   Enterprise Risk Management (H)
                                                                Project Management (H)

                                                                Forecasting, ERP Evaluation
                                                                Financial Risk Analysis (H)

                                                                Strategic Planning (H)
                               Effective Communications (S)

                               Time Management (S)
                               Cost Accounting, Budget Prep,
                               Excel Analysis (H )
                               Audit, Tax, External Reporting

                                      Entry FP (1st job)                      Young FP                     Seasoned FP                      Senior FP

                                                                            FP= Finance Professional
What CFOs are Saying …. Bottom Lines

 •Aspire to move from counter of wealth and compliance
 cop to creator of wealth and influencers of strategy.
 But, ….

 •This requires a whole new set of MA/finance function
 skill sets. But, …

 •Sourcing these new skill sets is problematic and
 therefore they tend to be “home grown”.
What CFOs are Saying …. Top of Mind
            Skill Sets
NOW                              SOON

Strategic Planning               Integrated Planning, Budgeting,
Forecasting                      Predictive Analytics/BI

Risk Identification              Embedded Enterprise Risk
Customer/Segment Profitability   Marketing ROI/Customer Lifetime Value
Financial analysis;              Sustainability/Non-Financial
Leading indicators               Reporting/Triple Bottom Line
What CFOs are Saying … Top of Mind Skill
NOW                              SOON

Moderate IT Integration          Heavy IT integration of data with
                                 standardization to enable “one version of
                                 the truth”
Analytics an enabler             Data/predictive analytics a competitive

Soft skills – Communications +   Soft skills – collaboration on cross
?                                functional teams, KNOWING THE
Project management helpful       Business PROCESS management critical
Critical Finance “Areas of Mastery”

                             1) Strategic Business Partner

                   2) Champions of Corporate Performance
                    Management, Budgeting and Planning

                 3) Custodians and Champions of GRC –
                    Governance, Risk and Compliance

          4) Masters of Flawless Delivery of Transactional
                       Processing Activities

5) Masters of World-Class Talent Management (Training, Skills,
       Management Accountants:
           What do we do?

 Financial statement preparation and analysis
 Management Accounting professionals
 Business case preparation/analysis to support new
     perform these and other functions
                 around the globe
 Support for Mergers and Acquisitions (M&A),
                 with a forecasting to support
 Planning, budgeting andpassion for
  operations and the strategy of the organization.
              technical competence,
 Implementing internal controls, quality and risk
  processes to driving business performance
ethics, andreport financials with integrity while
  growing the business.
        The Management Accountant:
           Advocacy for Management
      Design     Implement     Manage      Report     Audit

                The Management                   Public
                  Accountant                    Accounting

Technical Accounting Depth AND Business Operations Breadth
         in Decision Support, Planning and Control + Highest
        Standards of Ethical Conduct + Commitment to Lifelong
           Learning =         A Management Accountant
       Management Accountants:
            Who are we?
•   CFO, Foundations Behavioral Health
•   CFO/Treasurer, First Savings Bank
•   Director of Finance & Accounting, Marriott International
•   Director of Technical Accounting & Reporting, Microsoft
•   Finance Manager, Habitat for Humanity
•   Financial Controller, Johnson & Johnson
•   Vice President of Finance, Southeast Corporate Federal
    Credit Union

• Firms with the most IMA members in China: Caterpillar,
  PWC, E&Y, ABB, Motorola …
        Business Leader Quotations
On February 4, 2008, David Burritt, CMA, CFO of Caterpillar Inc. provided testimony
to the U.S. Treasury Advisory Committee in a human capital panel discussion the
committee led on the Auditing Profession.

The following quote is excerpted from his testimony:

    “I can tell you the Certified Management Accountant
    certification or other professional credentialing is key for our
    1,800 accountants. And, we have a credential expertise
    requirement for our senior leadership team to help ensure long-
    term, transparent financial reporting and SOX compliance.”

              David Burritt, CPA, CMA
              Chief Financial Officer
              Caterpillar, Inc.
      Business Leader Quotations
“The CMA deals with all the relevant areas of financial
management and is a perfect complement to the strategic
way we expect our professionals to perform.”

        Stephen Cosgrove, CMA
        Vice President and Corporate Controller
        Johnson & Johnson

“By passing the CMA exam, we ensure that our staff stays current
with certain standards of management accounting. It also helps to
ensure that we have a highly skilled workforce that can do their jobs
better, faster and with greater expertise.”

        William L. Brower, Jr. CMA, CFM
        Vice President, Group Finance Business Analysis
        Johnson & Johnson
How Does Certification Benefit You?
 Capstone to your educational degree

 Opportunity to assess and demonstrate capabilities and expand
  knowledge base

 Distinguishes you from your peers and increases credibility
  and productivity

 Recognition of achievement

 Expanded career options and greater earning potential
    CMAs earn 25% more than professionals without
     certification (IMA’s 19th Annual Salary Survey, June 2008)
        A CMA Professional Has…

 Demonstrated ability to work across the breadth
  and depth of the entire accounting process
  within organizations
 Proficiency in decision-making, planning, and
  control functions
 Agreed to maintain professional competence
  through annual continuing professional
 Committed to a code of ethics
             CMA Statistics

Over 30,000 CMAs issued to date
Pass rates for the four parts of the exam
 range between 50% to 60%
     Preparing for the CMA Exam

 Make a personal commitment to study
 Don’t procrastinate
 Sharpen knowledge of exam topics
 Restore test-taking skills
 Take self-study or live review courses
 Visit
 Every management accountant has a responsibility to
  behave ethically. (IMA Code of Conduct)
 It is essential to be aware of how your personal conduct
  impacts your peers, your subordinates, and your
  organization’s ethical culture.
 An environment where every employee does not adhere
  to the organization’s code of conduct has the potential
  for questionable actions to occur.
 Even incidents of even seemingly minor “rule bending”
  can be the impetus for someone else to bend the rules
  “just a little more next time”
          Words of Wisdom
 Relax and be yourself – Don’t go overboard trying to
  impress everyone around you
 A handshake and a “thank you” are simple gestures that
  go a long way
 Find a mentor (can be internal or external)
 Keep your résumé updated
 Participate in some activity outside the workplace
  (community, professional)
 Network, network, network!

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