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Statements on Management Accounting

CONCLUSION The IMA has merged the MAP Committee with the
The state societies and the AICPA are professional organ- Foundation for Applied Research (FAR) creating the
izations that CPAs may join. The state boards of account- MAC/FAR Committee. Currently, SMAs are maintained
ancy are regulatory agencies. The organizations are by this MAC/FAR group. This board is comprised of
independent, with each having a different function. trustees and operates similarly to the MAP Committee in
supporting SMA maintenance and other research initia-
tives.
WEB SITES OF INTEREST
American Institute of Certified Public Accountants: PURPOSE
http://www.aicpa.org
The purpose of the MAC/FAR Committee in issuing
Public Company Accounting Oversight Board: SMAs is generally twofold: (1) to express the official posi-
http://www.pcaob.org tion of the IMA on accounting and business reporting
issues raised by other standard-setting groups, and (2) to
National Association of State Boards of Accoun-
provide broad guidance to IMA members and to the
tancy: http://www.nasba.org
wider business community on management accounting
SEE ALSO American Institute of Certified Public Accoun- concepts, policies, and practices. Regarding the first stated
tants; National Association of State Boards of Accoun- purpose, other standard-setting groups include those such
tancy; Public Company Accounting Oversight Board; as the FASB, the Governmental Accounting Standards
Uniform Certified Public Accountant Examination Board, the International Accounting Standards Commit-
tee, and government agencies such as the Securities and
Exchange Commission. Regarding the second purpose,
Kathleen Simons
the work of the MAC/FAR trustees is seen as an effective
method of summarizing the wide range of activities that
define management accounting.
Some accountants believe that SMAs should be
STATEMENTS ON
accorded the same considerable authority as generally
MANAGEMENT accepted accounting principles. As of 2005, such author-
ACCOUNTING ity had not been granted. There is some support for this
position. The Auditing Standards Board of the American
Statements on Management Accounting (SMAs) are pro-
Institute of Certified Public Accountants (AICPA) in the
duced, issued, and implemented to reflect official posi-
tions of the Institute of Management Accountants (IMA), Statement of Accounting Standards (SAS) No. 5 (later
the largest and most prominent management accounting revised as SAS No. 69 in 2005, with amendments in SAS
No. 93) stated that principles that are “pronouncements
organization in the world. The IMA is an organization of of bodies composed of expert accountants,” and are issued
accounting professionals that had a membership of only after “a due process procedure, including broad dis-
approximately 70,000 members in 2005.
tribution,” are authoritative and are to be applied where
relevant (American Institute of Certified Public Accoun-
HISTORY tants, 2005, p. 716).
One of the chief activities of the IMA is to conduct and The usefulness of authoritative statements to guide
sponsor research in management accounting. In 1969 the management accounting practice is apparent given the
IMA (which at the time was called the National Associa- diversity of industries and accounting practices within
tion of Accountants) created the Management Account- industries. In addition, the business environment is
ing Practices (MAP) Committee to serve as its senior becoming increasingly complex as technological advances
technical committee. This committee was charged with make practices of the past obsolete. The role of external
the task of promulgating statements on management business reporting has expanded. In 1994 the AICPA’s
accounting that reflect the views of the IMA. The MAP Special Committee on Financial Reporting (sometimes
Committee membership included twelve representa- referred to as the Jenkins Committee) recommended sig-
tives—from corporate and public accounting as well as nificant changes in the current financial reporting model
education—appointed by the IMA president. These rep- to include expanded coverage of both nonfinancial or
resentatives were widely considered expert authorities in operating data and more forward-looking or future-
accounting. Past members have included members of oriented data. As of mid-2005, these types of changes
other prominent accounting regulatory groups such as the were still being recommended, but implementation prob-
Financial Accounting Standards Board (FASB). lems had not been resolved. Problems primarily stem from

696 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION