The Cost accountancy professionals from Studies – ICMAI say that there is an expectation of CMA syllabus change in the year 2023 as the features of the subject are changing. The main focus of the syllabus change is with a case study based learning and educating decision-making process. Communication, data analytics, risk management in banks and finance, and start-up business environment are the areas in which the CMA students need to equip their skills for the global competition. This blog is a cognition for future syllabus change. Detailed discussion for CMA syllabus 2023 makes the subject interesting.
CMA new syllabus applies from June 2022 exam to the students. Reforms are under discussion for flexibility with AGM, a new model for financial reporting, and books of accounts maintained in the electronic format. The audit trials need to be recorded electronically for every transaction as per the date. The accounting software must have an edit log for changes. It is essential to check that the trial audit function works with the accounting software. For the quarterly reporting, the amendments are with IFRS 9 for financial instruments, business definition, and definition of material, interest rate reform, and Covid-19 related rent concessions.
Risk management in banks and finance:
Risk management is essential to protect the assets of the banks. The regulatory changes, cyber security issues, and increasing competition have an impact on risk management. The CMA students excel in the banking and finance industry by reading the techniques to manage banking risks.
Operations management information system:
The following points elucidate the changes happening in the operations management information system. Quantitative techniques in decision making and data analytics apply to this subject.
• Design, data, operations, and cost are the four parts of organizational management information. The alteration of the MIS has an impact on the performance. Timely information, complete data, the technical aspect of the design and the cultural aspect of the design are the elements that need to be incorporated with MIS.
• Factories and cost centres use computer-based systems to record the production and costs associated with business processes. MIS report is usually connected to the Tally: ERP 9 software. Accounting reports, inventory reports, financial reports and management control reports are the four types of MIS reports. Management control reports are from the cost centre for controlling activities. Cost centres and profit centres provide information about the cost and revenue of every department. Cost information help for better decision making.
• MIS reports are helpful for the banking sector to understand customer usage patterns and credit card frauds. Management information systems help the operations manager in Companies and banks to make crucial decisions.
• As per the Forrester research, more than 60 per cent of the Companies use management information tools like the management tool. The organizational change and information system need to be with the same design concept.
• The supply chain pressures, automation and employee productivity are the questions that need changes in the year 2023. The cost accountancy subject needs to include the pressures with supply chain management, employee productivity and technological gaps.
Strategic cost management-decision making:
Strategic management is about changes in the production, profit and sales budget. Cost control strategies deal with each element of the cost, compare the real cost and standard cost, and bring the cost to the value which is decided as per the budget. Price, wastage, machine time and labour time are the reasons for the failure of a budget. Strategies are to manage the budget and achieve the desired profit. Activity-based costing, total quality management, benchmarking, JIT inventory control system business process reengineering, six sigma, balanced scorecard, Life cycle costing, six sigma, theory of constraints, and target costing are the different techniques of strategic management.
Recently the US advised India to foster the process of the global supply chain. Market access and ease of doing business are essential for understanding the global market. India is focusing on ease of doing business, but the focus on market accessibility is missing. Strategical perspective areas are intellectual property rights, localisation, tariffs, security testing, duplicative safety, FTI restrictions, and price controls. The bureaucratic control and regulations are essential for healthy competition with the global players.
Apart from financial planning, strategic management help to position the competitive factor, risk factor and performance management of the employees. The case study of a Japanese television manufacturer states that the high cost of materials led the manufacturer to produce TV sets with fewer components, and improved innovative designs. This process change increased the sales volume and reduced the production cost. Innovation is the factor that management needs to focus on to cultivate good practices in strategic management.
Factors influencing cost and management accounting:
• The external and internal business environment like competitors, politics, economy, weather and customer preferences are changing vastly.
• The recent market challenges intensified the Cost accountants with price fluctuations, deregulations, enhanced global competition, less accurate product information, and reduction in the life cycle of the product.
• As per the research Ahmad, 2012, there is a necessity for increasing profitability through resource management and waste reduction. Especially in the manufacturing sector, the cost information gives the freedom to act for a cost accountant.
• There is an evolving need for internal information, techniques and tools used in the organization to manage the disruption and global competition.
• As cost and management accounting offers many advantages, the medium and large scale industries use cost and management accountancy.
The changes in the cost and management subject are reviewed here in the form of theories and leadership qualities. The syllabus of ICWAI needs to reflect the dynamic elements of the business processes. So, the year 2023 CMA syllabus change would be adding some theories with case study applications to the students. Follow ICMAI notification 2021 to know more regarding the updates.