2020 CMA Part 1 New Topic: Integrated Reporting (Section A)

Integrated reporting is one of the new topics on the syllabus of the CMA Part 1 Exam beginning in January 2020. The focus of integrated reporting is reporting more about the company than just the financial statements.

One way of looking at integrated reporting is that it is similar to companies applying the balanced scorecard approach to themselves. In the evaluation of employees, a balanced scorecard approach is when the evaluation consists of more than just the evaluation of the work of the person compared to the financial budget. While there are managers who are able to achieve short-term results, sometimes the way that they act towards their colleagues, customers, and suppliers means that the success does not carry into the long-term. The four traditional perspectives that are assessed under a balanced scorecard evaluation are: learning and growth, business processes, customers, and financial performance.

For companies, the financial statements provide only a limited picture of the health of the company based on what information is required to be reported. Integrated reporting is the process of companies reporting more than just their financial results, but also their impact on stakeholders, the environment, and anyone who comes into contact with the business. The primary purpose of integrated reporting is to explain not just how the company has created value in the past, but how it will continue to create value in the future.

If you are studying for the CMA exams in 2020, you will learn about Integrated Reporting in Part 1, Section A. Whether you are studying for CMA or not, you can learn more about Integrated Reporting here: https://integratedreporting.org/

Integrated reporting is a topic that will continue to become more important and is something that accountants will be working with increasingly in the future. Whether or not you need to study integrated reporting for the 2020 CMA exams, I encourage you to learn more about it, and if you have any experiences with integrated reporting already, you are welcome to share those experiences in the comments.

Brian Hock, CMA, CIA

2 Comments

  1. Buhari Semiu Olamilekan on June 23, 2019 at 11:54 am

    Yes, Integrated Reporting should be a hallmark for fair, accurate, complete, and reliable reporting. Financial reporting should be a subset in the universal set the entire reporting structure required to propel any organization towards greatness. In my organization (Propetrol Limited, Nigeria), efforts were more tailored towards fair, accurate and reliable operational reporting (end-to-end), which captures all the business and operational activities of the company from start to finish. Most component of the financial reporting were automatically updated in the process, with the exception of some end of month/year adjustments which take very few minutes to update.

    The detailed operational/activity reporting help to generate data as the business progresses in the delivery of value to its esteemed clients/customers and the decision made at every interval to ensure such values were not compromised. It also include metrics and internal control alarm triggers. All these reports were integrated to ensure that every business manager of the company, especially the decision makers and the compliance functions, all have integrated reports that help them with the relevant information needed to evaluate operational and financial performance, identity and correct control breaches, set and review KPIs, and continuously monitor the progress of the company on a wider scale.

    I am happy that this key knowledge element will be embedded in the syllabus of the CMA program designed by the Institute of Management Accountant (IMA, USA). This will make CMA Exam more relevant and targeted, and help arm Certified Management Accountants (CMAs) with contemporary high level skills that would be used to add more value to their respective organizations, industry, and country at large.

    Accountants in West Africa still have lots to do to acquire and maintain this knowledge for the benefit of their organization and beyond. IMA is also expected to play some leading role in the process. Also, how new generation of Accountants can survive in a business environment that is already stereotyped in an old fashioned ways of reporting, yet unwilling to adjust to current trends, also need to be addressed. No doubt, this knowledge element will help Accountants achieve better result for their organizations, in terms of overall wealth maximization and substantial compliance.

    A welcome development!



  2. Abda on July 1, 2019 at 4:43 am

    Welcome development