Colorado State University recently announced that the head of its Department of Accounting, Bill Rankin, was named a top global expert in the field of experimental managerial accounting by Brigham Young University.
Rankin, named as one of the top five professors in three separate categories of accounting, achieved his rankings because he’s written so many scholarly articles on the subject in accounting journals.
Experimental managerial accounting, the subject of Rankin’s research, is a lesser-known area of the field, different from the financial accounting that yields reports for public consumption. It’s forward-looking, fast-moving and requires a different set of skills than its financial-accounting counterpart.
Experiments in Accounting?
Managerial accounting refers to accountants who work with other departments to develop an internal financial strategy and promote an organization’s long-term goals, according to the Accounting for Management website.
Experimental research in this area looks for new ways business managers can use their accountants’ data. These methods aren’t just used for day-to-day plans; managerial accountants use comprehensive data to help plan over-arching strategies.
That’s the chief difference between managerial accounting and financial accounting: Financial accounting is used to prepare summaries of past financial events, and it’s also the type of report companies distribute to investors or the public. Managerial accounting, by contrast, usually stays internal and is forward-looking, helping managers forecast and plan budgets. Both types rely on the same underlying financial data, but that data is used for different purposes.
Additionally, accounting for managment is inherently much less precise than financial accounting because it uses financial data to speculate on future events rather than report past ones. Financial accountants must be accurate down to the penny, whereas managerial accountants are typically making best guesses based on available information, the website notes.
This is what often makes management accounting experimental, as practitioners look to develop new and improved ways for managers to make these speculations.
Certified Management Accountant (CMA) Careers
Managerial accountants get specific training for this kind of work. Many undergraduate accounting degree programs around the United States, including Colorado State, are designed to provide education backgrounds that prepare students to sit for the CMA exam. The CMA credential is designed to be the advanced professional certification for management accountants, much as the Certified Public Accountant (CPA) is the certification used for most financial accountants. Like a CPA, CMAs must have bachelor’s degrees from accredited universities, two continuous years of professional experience, and, of course, a passed exam.
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