AICPA Works to Make CGMA More than Just Four Letters
The AICPA has taken some heat over its CGMA designation—is it really worth it? A new set of standards shows an attempt to put some meat on its bones. In a May 1, 2014, press release, the Institute announced the publication of a CGMA Competency Framework that helps management accountants "assess their current competency level and provides insight on steps they can take to expand their skills while meeting their commitment to lifelong learning."
The framework divides management accounting into four kinds of skills: technical, business, people, leadership. Under each of these broad headings the framework lists a series of skills, each of which runs the range from "foundational" to "intermediate" to "advanced" to "expert."
For example, a foundational financial reporting and compliance skill is "understand and describe the main elements of financial statements and reports." At the expert level, an accountant should be able to "ensure full organizational compliance."
Under people skills, an accountant will be expected to "analyze needs of business partners" at the foundational level, and "leverage a broader network across the business and externally" at the expert level.
Will this legitimize the CGMA designation?
The reaction to the 2012 launch of the designation—a partnership between the AICPA and the Chartered Institute of Management Accountants (CIMA)—was mixed, due largely to what some saw as a dearth of qualifications. The experience requirements were minimal—two to three years, depending on background. And although the AICPA said an exam was in the works, it wouldn't be needed until 2015, and meanwhile, those who obtained the designation beforehand wouldn't have to sit for it. The annual cost to maintain the designation is $150, with a discount for state society members.
The AICPA has billed the CGMA as a gold standard. At the designation's launch, Gregory J. Anton, AICPA chairman, said it would "elevate the profession of management accounting" and recognize "the most talented and committed management accountants with the discipline and skill to drive strong business performance."
But some CPAs felt that was overblown. Does a mere three-year experience requirement elevate the designation to a "gold standard" asked one CPA. And J. Michael Kirkland, CPA, a management accountant and a board member at the New York State Society of CPAs, said he thought the international focus would be of use, but that it was the CPA designation, not the CGMA, that was the gold standard.
Other CPAs were even more forthright. Greg Kyte, a CPA who writes commentary on our sister site, Going Concern, implied back in 2012 that it was a fundraising boondoggle: "They want to make it as easy as possible for you to give them $150—not just this year, but every year."
The question now is whether this framework will burnish the designation. Right now, it's only a series of guidelines and does not impose any additional qualifications on those seeking the designation.
At the designation's launch, Kirkland said that only time would tell if the CGMA designation would be of any value. It wasn't clear if that time had come yet.