Strategic management accounting is a key component of the overall skills base of today’s professional accountant.

This segment examines the strategic management accountant's role in dynamic organisations operating in the global business environment. In this role, the professional accountant engages with the organisation's top management team and contributes to strategy development and implementation with the aim of creating customer and shareholder value and a strong competitive position for the organisation. The segment highlights the management accounting tools and techniques of value chain analysis and project management which have become increasingly important in contemporary operational environments.

The segment includes discussions on the professional accountant's responsibilities and judgement as introduced in the Ethics and Governance segment. Also discussed are investment evaluation and strategic business analysis in the context of assessing and responding to risk, as covered in the Financial Risk Management and Advanced Audit and Assurance segments. You are introduced to strategic management concepts which are expanded on in the Global Strategy and Leadership segment.

Strategic Management Accounting is an elective segment in the CPA Program professional level for candidates who commenced prior to semester 2, 2009. It is a compulsory segment for candidates commencing the CPA Program professional level from semester 2 2009.

Exam structure

The Strategic Management Accounting exam is comprised of a combination of multiple-choice and written-response questions.

For semester 1 2014 the exam consists of two sections:

  • section A consists of 60 multiple choice questions (1 mark each)
  • section B consists of four written response questions, worth a total of 25 marks

The total marks available for the exam is 85. 

Segment aims

The aims of this segment are:

  • to develop the skills of the professional accountant in creating, managing and enhancing sustainable value to the organisation through the use of various strategic management tools and techniques
  • to examine techniques for developing, implementing, measuring and monitoring the performance of an organisation to provide feedback for improving strategies

Segment objectives

On completion of this segment, you should be able to:

  • explain the role of strategic management accounting in supporting strategy development and the day-to-day operations of an organisation
  • explain and apply the strategic management process and organisational and industry value analysis to understanding value drivers, cost drivers and the reconfiguring value chains
  • explain the role of performance measurement and control systems in value creation, strategy implementation and monitoring performance to improve strategies
  • apply strategic management accounting tools and techniques to improve the contribution and sustainability of value-creating activities
  • discuss the role of project selection, planning, monitoring and completion in strategy implementation

Segment content

The segment is divided into six modules. A brief outline of each module is provided below.  

Module Recommended proportion of study time
1. Introduction to strategic management accounting

10%

2. Creating organisational value

25%

3. Performance measurement

20%

4. Techniques for creating and managing value

30%

5. Project management

15%

6. Case study

*

*Refer to the module descriptions in Module 6: Case study

Module 1: Introduction to strategic management accounting

This module sets the framework for strategic management accounting. It discusses traditional management accounting and the key changes leading to the development of strategic management accounting. The module considers how the professional accountant and strategic management accounting systems play a critical role in business. This module also introduces the key contemporary concepts, tools and techniques that will be expanded on in subsequent modules.

Contents:

  • Part A: The role of strategic management accounting
  • Part B: Understanding and supporting management
  • Part C: Management Accounting Systems

Module 2: Creating organisational value

The ability of an organisation to deliver value and secure a competitive position depends on how well it develops and executes its strategy. This module provides an overview of the role of the strategic management in supporting strategy development.

Part A introduces the business governance framework, the concept of stakeholder value, and the organisational and industry value chains.

In Part B, two approaches to strategic analysis, value analysis and SWOT, are shown to be fundamental to understanding the organisation and its environment. This understanding then informs the development of a strategic management framework and strategies designed to deliver stakeholder value. The module introduces established and new approaches to strategy development. The role of a strategic management accountant in strategic analysis, strategic planning, strategic implementation, and in improving value chain performance is emphasised. All of these activities are critical contributions to enterprise and business governance.

Contents:

  • Part A: Value creation
  • Part B: Strategic management

Module 3: Performance measurement

Sound design and an understanding of the use and implications of strategic performance measurement and control systems are gaining increasing importance in all organisations. This module focuses on understanding the key role that performance measurement plays in strategy and value creation. It discusses the characteristics of effective performance measures and control systems, the use of performance measures, and how to apply them to motivate and reward employees. The key themes are the importance of performance being socially responsible and sustainable; the leadership role of the professional accountant in performance measurement; and the importance of value adding activities.

Contents:

  • Part A: The role of performance measurement
  • Part B: Strategy, management control, and performance measurement
  • Part C: Determining performance measures and setting performance targets

Module 4: Techniques for creating and managing value

This module shows how, through the use of a variety of strategic management accounting concepts, tools and techniques, the professional accountant is able to assist with the growth of organisational value. The module uses a case study to illustrate the implementation of strategies to enhance value. Module 4 focuses on managing the value chain and discusses the key components of strategic cost management and strategic profit management.

Contents:

  • Part A: Applying strategic management accounting concepts, tools and techniques to the value chain
  • Part B: Strategic cost management
  • Part C: Strategic profit management

Module 5: Project management

Project management is an integral aspect of management strategy. This module explores the roles involved in project management, including project leadership and the professional accountant. It examines the strategic management accountant’s role in project selection, planning, implementation, control and monitoring and project completion and review.

Contents:

  • Part A: Project management defined
  • Part B: Roles in project management
  • Part C: The strategic management accountant's role in project selection
  • Part D: The strategic management accountant's role in project planning
  • Part E: The strategic management accountant's role in project monitoring and control
  • Part F: The strategic management accountant's role in project completion and review

Module 6: Case study

The case study module consolidates the understanding of strategic management accounting through completion of various tasks that require you to apply the concepts, tools and techniques covered in Modules 1 to 5 using a practical case study. Although the case study is not weighted for assessment purposes, in order to gain the most benefit from your study of the Strategic Management Accounting segment, it is important that you allocate time to complete the Case study module, including attempting the Case study tasks and reviewing the suggested answers. 

At the end of the case study, there is a series of tasks (and suggested answers) which you are required to complete.