In December 2016, Shanghai EasyFinance Enterprise Management Consulting Co., Ltd. (“EasyFinance”) and the Institute of Management Accountants (IMA) officially released the research report China Management Accounting Practices: Ability and Future. Based on 518 valid survey responses and in-depth interviews with chief financial officers from multiple enterprises, the report provides a systematic review of management accounting capabilities in Chinese companies across budgeting, performance management, cost management and decision analysis, and risk management, offering practical insight for finance transformation and talent development.
The study was organized and implemented by the China Management Accounting Research Center of Excellence (CRCE), jointly established by EasyFinance and IMA. It represents another major collaborative research effort following the 2014 report Management Accountants: Increase Business Value.
Figure: Cover of the 2016 EasyFinance–IMA joint research report China Management Accounting Practices: Ability and Future
From System Construction to Capability Assessment
As competition intensified and management requirements evolved, management accounting began to draw broader attention from Chinese enterprises. In 2014, China’s Ministry of Finance issued its Guiding Opinions on Comprehensively Promoting the Construction of a Management Accounting System, providing policy support for capability building, finance transformation, and professional development. Yet moving from management accounting concepts to enterprise-level application remained a practical challenge.
Against this backdrop, EasyFinance and IMA extended their research focus from general management accounting awareness to the actual capabilities required in enterprise practice. The purpose was to identify the gap between what companies need and what professionals are currently able to deliver, thereby providing a practical reference for management accounting system construction and talent development in China.
565 Questionnaires, 518 Valid Responses, and Multi-Industry Participation
Fieldwork for the study was conducted from February to March 2016. A total of 565 questionnaires were collected, of which 518 were valid, representing an effective response rate of 91.68%. The research was further supported by interviews with CFOs to better understand the application and future direction of management accounting in Chinese enterprises. Participating companies came from manufacturing and engineering, wholesale and retail, information and communications, and other sectors, with medium and large enterprises accounting for the majority of the sample.
The report examined four core capability areas: budgeting, performance management, cost management and decision analysis, and risk management. It also assessed finance function effectiveness, the role of management accounting in achieving organizational objectives, and the obstacles enterprises face in implementation and talent cultivation.
Research Findings: Budgeting and Decision-Support Capabilities Need Further Strengthening
The research found that demand for management accounting capabilities was rising steadily, while notable gaps remained between the importance of certain skills and the degree to which they had been mastered in practice. In budgeting, cash budgeting, understanding the relationship between forecast financial statements and budget components, and using budgeting to support short-term operating targets and management control were all identified as critical capabilities. The study also noted room for improvement in the use of forecast financial statements to support internal management.
In performance management, enterprises needed to translate strategic objectives into measurable targets for business units and responsibility centers, and to reinforce execution through variance analysis, performance evaluation, and incentive mechanisms. The research also highlighted the importance of strengthening technical capabilities such as standard costing and analysis of material and labor cost variances.
In cost management and decision analysis, break-even analysis, cost-volume-profit analysis, and decision-making in multi-product operations emerged as important skills. These capabilities directly influence how enterprises understand cost structures, evaluate business choices, and improve operating results. The report also examined risk management, finance function effectiveness, and cross-functional collaboration, providing a more comprehensive basis for identifying barriers to management accounting adoption.
Joint Research to Advance Management Accounting Practice and Talent Development
The joint study was organized through the China Management Accounting Research Center of Excellence, established by EasyFinance and IMA. Marshall Ma, General Manager of EasyFinance, served as Chief Planner of the report.
The related research was published on IMA's website, with Kip Krumwiede, Raef Lawson and Marshall Ma listed among its authors.
Since jointly establishing the research center in 2013, EasyFinance and IMA have continued to collaborate on key issues in the development of management accounting in China. The release of Ability and Future not only provided Chinese enterprises with a reference point for assessing their management accounting capabilities, but also offered fresh evidence for talent development, finance transformation, and value creation.
Easy Finance has supported management accounting, strategic finance and enterprise AI capability building since 2004.
Learn more: www.easyfinance.com.cn/en