F5 Performance Management Accounting: Its No Joke

August 24th, 2010 by admin

What’s the definition of an accountant? Some may say they are people who solve a problem you didn’t know you had in a way you don’t understand. In addition, it is frequently stated that “accounting will prove anything, even the truth”. Yet, these slightly derogatory views, miss the extremely important function of accounting generally and performance management accounting specifically. The ACCA (Association of Chartered Certified Accountants) believes value creation and business success are essential for the achievement of a sustainable economic recovery, but without the “language of business”, these are impossible goals.

The ACCA is an internationally recognised organisation for professional accountants, which seeks to deliver qualifications and development that is relevant to business. These set out to deliver all the key learning upon which management accountancy is founded together with the capabilities to apply it in the workplace. The primary qualification is composed of fourteen examinations and papers. From these, performance management accounting, F5 paper, which has its own microsite, is probably most pertinent.

This examines the concepts which are fundamental to an innovative body of new and dynamic practices in business accountancy. Throughput accounting,for example, is indicative of this change in direction. This concept highlights the growing functional interdependence within corporate entities, describing one of the key costing disciplines in decision-making and performance management. In addition, the mechanics and execution of behavioural budgeting is taught. This up to date budgetary methodology is a move away from the conventional quantitative approach and reveals how using budgets as objectives can stretch business performance.

The value of professional accountancy and its place at the head of the body corporate, is exemplified in research recently conducted by the ACCA and Mercer, a human resources consultancy, entitled ” Generation Y:Realising the Potential”. The objective of the survey was to reveal the outlook of the youngest layer of professional accountants in employment and can be viewed on the ACCA website. “Notwithstanding other findings, the survey highlighted that this group of ambitious and clear sighted professionals “see(s) the accountancy qualification as a great step to a broader business career…”. In addition, Chris Johnson, UK Head of Human Capital at Mercer remarks that “Value creation is key for organisations in the future. Increasingly human capital will be the primary source of competitive differentiation”

So then, it seems accountancy isn’t a joke after all