The Director's Corner

Click here for a welcome message from IMA’s Director of Professional Advocacy, Linda Devonish Mills. Remember to periodically check this Professional Advocacy section for the latest updates and breaking news.

IMA Launches New FGRC Practice with Discussion Paper on Root Causes of Financial Restatements

On February 12, 2008, IMA announced the launch of its new Finance, Governance, Risk and Compliance (FGRC) research practice. This announcement comes with the release of a new discussion paper, “Accounting Control Assessment Standards: The Missing Piece in the Restatement Puzzle”.

The paper explores the high incidence of cases in which management and their external auditors attest to having an effective system of internal controls, but later issue a material financial restatement relating to an internal controls breakdown. Financial restatements impact investor confidence, a firm’s cost of capital and value creation potential, and, U.S. global competitiveness. A copy of the press release announcing the FGRC launch and discussion paper can be found under the Press Room section of the IMA website.

IMA’s FGRC research practice has provided requested input to Congress on Sarbanes-Oxley issues for small business, as well as global competitiveness issues. Most recently, we provided the SEC’s Committee on Improvements to Financial Reporting (4 subcommittees) with oral and written testimony as well as providing a position statement to the U.S. Treasury Advisory Committee on the Auditing Profession. These recently filed documents can be found on the FGRC - Additional Resources section of IMA’s website under Comment Letters and Position Statements.

Eighth Global XBRL Academic Competition

Applications are currently available for accounting students and faculty advisors to participate in the 8th Global XBRL Academic Competition that will take place at Bryant University in 2008.

The purpose of the 8th Global XBRL Academic Competition is to provide a unique opportunity for students and their faculty advisors to participate in the development of the future of business and financial reporting modeling for the Internet and their work to be recognized by the international community. This opportunity is open to all students and faculty advisors in accounting, accounting information systems (AIS), finance, information sciences and related fields. With new XBRL adoptions by government agencies, there is a demand for XBRL projects involving taxonomy development, convergence, financial reporting using XBRL, XBRL GL for internal reporting, auditing XBRL documents, and XBRL semantics modeling. The XBRL Academic Competition at Bryant University has received support from IMA in previous years. This is a great event to be considered by IMA’s student membership and regular members that are academicians.

The deadline to apply for your intent to participate in the competition is November 20, 2007. The application form can be found at www.XBRLEducation.com. Final projects are due for submission for display at the competition by March 15, 2008. Please see award winning students projects from prior years at www.XBRL.org or www.XBRLEducation.com. Some prior winners of this competition have been able to make significant contributions to the XBRL world-wide effort, including sparking the growth of XBRL in their home countries.

For additional information please contact Saeed Roohani, Accounting Department Chairperson at sroohani@cox.net.

Charter Approval of IMA’s Small Business Financial and Regulatory Affairs Committee
IMA’s board of directors approved a charter for a Small Business Financial and Regulatory Affairs Committee at its meeting in Salt Lake City on September 29, 2007.

IMA’s Financial Reporting Committee has a long history of addressing technical accounting issues on behalf of IMA membership that relates primarily to large companies. However, IMA’s senior management and its board of directors has recognized a need to develop a committee that addresses issues that are of relevance to our members who are employed with small and medium sized companies.

Linda Devonish-Mills, IMA’s director of professional advocacy and staff liaison for the financial reporting committee will also be the liaison for the small business committee. The committees will be encouraged when feasible to work collaboratively together to address issues that impact the management accounting profession. Linda is in the process of identifying IMA members and potential new members to serve on the committee. The following criteria is preferred for potential members; 1) Management accounting professional functioning in a financial reporting role at the level of Director or above; preferably at the Controllers/Assistant Controllers or CFO level at a small or medium sized company; 2) CMA, CPA or other certified credentials; and 3) Has experience addressing issues related to small and medium sized companies with regulatory bodies such as the SEC and FASB.

Please contact Linda at lmills@imanet.org if you would like to be considered or have recommendations for management accounting professionals to serve on IMA’s Small Business Financial and Regulatory Affairs Committee by November 16, 2007.

New Statement on Management Accounting for Enterprise Risk Management
On May 9, 2007 IMA issued a new Statement on Management Accounting (SMA) entitled, “Enterprise Risk Management (ERM): Tools and Techniques for Effective Implementation”. ERM is a concept used by organizations to identify, assess and manage risks to meet objectives and remain accountable to their stockholders. It approaches risks from a holistic view across the enterprise. Although the Securities and Exchange Commission is expected to issue top-down, risk-based guidance for management of SOX compliance programs, practitioners will still be looking for practical ways to implement a truly cost-effective, risk-based approach to assessing the effectiveness of their internal controls over financial reporting. The ERM SMA will help organizations of all sizes best approach SOX compliance requirements and can be leveraged for use in other value enhancing activities.

The SMA is available as a free download on IMA’s website under Publications/Statements on Management Accounting/Enterprise Risk & Controls.

Release of Report and Recommendations from the U.S. Chamber of Commerce Commission on the Regulation of U.S. Capital Markets in the 21st Century
The U.S. Chamber of Commerce’s Commission on the Regulation of U.S. Capital Markets in the 21st Century issued a report on March 14, 2007 that provides recommendations on how the U.S. Capital Markets can be in alignment with a global marketplace. The Commission believes that recommendations incorporated in the report can be implemented quickly and without overly burdensome costs. Paul Sharman, President and CEO, and Mark Boyland, VP and General Counsel of IMA, attended the U.S. Chamber of Commerce’s first Annual Capital Markets Summit in Washington, D.C. on March 14, 2007 where the various sections of the Commission’s report were discussed.

IMA has been an active member of the U.S. Chamber of Commerce Sarbanes-Oxley working group focusing on reforms to restore U.S. global competitiveness, protect investors and allow businesses of all sizes to get on with the business of doing business. The Chamber is the largest business federation in the world representing 3 million businesses of all sizes. The IMA was represented by two panelists at a March 2 Congressional Staff Briefing on Sarbanes Oxley - Jeffrey Thomson, VP of Research and Applications Development, and IMA member Dennis Stevens, head of Internal Audit at the Alamo Group, a $400M accelerated filer. The briefing focused on "issues in the trenches" and practical thoughts on how to get SOX right for U.S. investors and businesses, with a particular emphasis on whether the SEC and PCAOB guidance proposals issued in December, 2006 go far enough.

New Statement on Management Accounting for Activity Based Costing

On January 29, 2007, IMA issued a new Statement on Management Accounting (SMA) entitled, “Implementing Activity-Based Costing”. Activity-based costing (ABC) systems, by focusing on the activities required to produce a product or provide a service based on their direct consumption of activities, permits more accurate costing than obtainable using traditional costing systems. This SMA provides those considering implementing an ABC system with information regarding the roles and responsibilities of management accountants in ABC projects, the need for behavior change management when implementing an ABC system, how to design and implement and ABC system, how to plan in ABC project implementation, how to ensure sustainability of an ABC system, and how to evaluate ABC software.

The SMA is available as a free download on IMA’s website under Publications/Statements on Management Accounting/Strategic Cost Management.

New Statement on Management Accounting for Enterprise Risk Management

On January 17, 2007, IMA issued a new Statement on Management Accounting (SMA) entitled, “Enterprise Risk Management (ERM): Frameworks, Elements, and Integration”. IMA has recognized that managing risk has become imperative for successful leadership within organizations. The SMA provides an overview of the ERM process and frameworks and will help management accountants understand their roles and responsibilities in ERM projects.

IMA’s introduction of the Enterprise Risk SMA comes at an important time, as the Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) have issued exposure drafts in December 2006, proposing SOX guidance to management and auditors that is practical and risk based. IMA has gathered substantial knowledge in this area and will be submitting an integrated response in February 2007. More information about the SEC’s and PCAOB’s guidance can be found on SEC and PCAOB updates under the Professional Advocacy section of IMA’s website.

In addition to issuance of the new SMA, IMA’s growing body of knowledge in the areas of risk management and SOX 404 implementation has allowed the organization to provide information to members through its various portals. On January 31, February 21 and March 7, IMA will conduct a “Role and Influence” series of webinars. The focus of the webinars is on integrated Governance, Risk and Compliance (GRC) within enterprises and the role and potential influence of the management accountant in this growing area to drive business performance. Information about the series of webinars will appear on IMA’s website under Professional Development/Webinars & Live Events as it gets closer to dates of when the webinars are scheduled to take place.

The SMA is available as a free download on IMA’s website under Publications/Statements on Management Accounting/Enterprise Risk and Controls.

Other Updates

XBRL
See the Advocacy section of the website under SEC updates to read more information about IMA's and the SEC's initiatives related to XBRL.

Sarbanes-Oxley Act
See the Advocacy section of the website under SEC updates to read more information about IMA's and the SEC's initiatives related to the Sarbanes-Oxley Act.

Web cast Updates/Related Documents