The 98% that responded affirmatively to inaccurate corporate information cite distortion factors such as overhead allocations and shared services, even though only 38% say their variances are of any significance. However, the respondents still indicated a need for improved cost visibility to assist in strategic decisionmaking activities, since cost management is the key input in this process among Fortune 500 companies, according to SmartPros report of the Accounting Best Practices Survey, developed jointly by Ernst & Young and the Institute of Management Accountants (IMA).
Overall, financial decisionmakers in the survey identified accurate and actionable cost information as their number one priority, followed by cost reduction. Yet, eight out of 10 (80%) place a medium to low priority on implementing new cost management tools and systems in the current economic environment, with spreadsheets and traditional costing remaining the preferred management accounting tools.
Asked what they would need to see to implement a new system, the financial executives were clear: in-house support; technology capabilities; and clear, qualified return on investment. Additionally they look for management endorsement of new tools for cost management.
The survey was distributed to 23,034 IMA members and generated nearly 2,000 responses, nearly 30% of which were senior level executives holding titles such as chief executive officer, chief financial officer, chief operating officer and vice president of finance.
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