IMA Ready to Compete with AICPA/CIMA Management Accounting Designation
Posted by AccountingWEB in Education & Careers, Accounting & Auditing on 12/28/2011 - 13:36
- New management accounting designation, CGMA, will be launched in January by the AICPA and the CIMA.
- The IMA, which offers the CMA credential, has issues with the CGMA designation.
- President and CEO of the IMA does not agree with qualifications needed to become a CGMA.
By Anne Rosivach
The Institute of Management Accountants (IMA), which has offered the Certified Management Accountant (CMA) credential since 1972 and represents more than 60,000 accountants and financial professionals in business worldwide, is facing "fierce competition" from a new management accounting designation – Chartered Global Management Accountant (CGMA) – that will be launched by the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA) in January 2012, according to Jeffrey Thomson, IMA President and Chief Executive Officer.
AICPA voting members will be automatically eligible for the credential upon verifying three years of qualifying experience. CPAs who are members of both the AICPA and their state CPA society will receive a special discounted annual fee to maintain the CGMA credential.
"While IMA welcomes these organizations' recognition of the important role of management accounting, we have some serious questions about the designation, and we intend to stand up and be counted," Thomson told AccountingWeb in a recent interview.
Thomson has questioned the length of the grandfathering period and the fact that AICPA members qualify without passing a test. He also objected to the automatic enrollment. "It is our understanding that they must opt out of the designation initially."
"Management accountants need to be able to make more judgmental analyses," Thomson said. "They need to pursue their credential and pass a rigorous, focused, relevant exam." He pointed out that in addition to passing a two-part exam, CMA candidates must fulfill both an education and experience requirement.
"At IMA, we are not just in the business of increasing our membership, although we are expanding our presence worldwide. We will continue to be focused on our mission, which is to respond to the market and to the needs of organizations and society."
"The market and organizations have shown a need for accounting professionals working in business to be prepared to analyze, plan, and budget, and to understand their obligation to investors and their role in preventing fraud. Studies have shown a talent management gap in forward-looking activities among finance professionals. We have an obligation to fill that gap."
"We expect finance and accounting personnel will choose to follow a professional management accounting path based on what the market and organizations have said that they need," Thomson said. "Surveys and focus groups have found that financial planners and individuals with knowledge of risk management, performance management, and measurement top the list of people they are looking to hire."
"Statistics show that a high percentage of students who graduate with accounting degrees will go into public accounting and perform audits, but after a few years they move into finance departments of companies of all sizes where they are responsible for planning and budgeting. They have learned to analyze historic information, but many will have had only one course in management accounting as part of their undergraduate degree in accounting. Working in public accounting is a great way to start one's career, but an accountant in business still needs to acquire management accounting skill sets," Thomson said.
"Working from a strong technical basis, the accountant working in finance needs to be able to go from data to decisions, from information to insights, and sit across the table as a trusted business advisor."
"To have a great career, a young professional with an accounting degree needs to develop a well-rounded set of skills, but those skills have value at any stage in a career. I became a Certified Management Accountant just two years ago after working in telecommunications for over twenty years, ending in a CFO role at AT&T. When I completed the suggested 150 hours of study per part, 300 hours total, for the CMA and passed both parts of the exam, I felt more competent, more rounded."
"An aspiring CMA needs to possess the skills to perform:
- financial planning analysis,
- strategic planning,
- risk management,
- mergers and acquisitions,
- strategic costing, and
- performance management and measurement."
Looking ahead, Thomson concluded that "the market will determine the future of management accountant credentials. But the market is not as rational as we would like, and it is very forgiving. When an organization has credibility and has reached a critical mass, people do not ask the tough questions, often building in inefficiencies."
Related articles:
- Building Your Brand: The Value of Having CMA and CPA Certifications
- IMA Survey Finds Slight Increase in Salaries for Finance and Accounting Professionals
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Gail Perry, CPA
IMA vs CIMA
The JV between the AICPA and the CIMA has put the US IMA in serious trouble. CIMA has now been given the go-ahead to move into the US with their version ot the CMA, and they have a system in place to put the IMA's back against the wall. CIMA has introduced a program to allow MBA's to take an exam series to fasttrack into their designation (a four examination series). There is a niche for an exam series that provides a standard for all MBA's worldwide to show employers what they have got. This could be the capstone designation that equalizes the Ivy League MBA with the small fry across the globe. If I had graduated from an unknown MBA program and had the chance to pass the same capstone test that Harvard/Chicago MBA had to take, I would jump at the chance. The AICPA is not concerned about this; they only want an add-on designation to get more yearly revenue and they don't consider the CIMA a threat. The IMA on the other hand, is not playing ball with anyone and does not seem to have a strategy. Now the IMA is up against the new AICPA designation and the incursion of the CIMA.
If the CIMA markets their MBA capstone program and gets acceptance at Universities with a Prometric contract in the US, the IMA and their CMA designation will eventually either have to merge with the CIMA or completely change their designation and focus on areas not handled by either the AICPA or CIMA.
Contradictions in Thomson's strategy
Thompson seems to advise AICPA and CIMA that a non for profit orgainsation should focus on the growth of profession and its members.
This is contradictory to his own actions. A couple of years ago, when he took charge of IMA, IMA was a member of IFAC. He broke up from IFAC just because they had to pay a fee, which was felt like a burden on profitability.
At the same time, he reduced IMA's 4 part exams to 2 parts. This was to attract most of the candidates which were not competent enough to pass 4 rigorous exams and thus compromised on the quality of CMA. IMA is now creating a bunch of in competent CMAs which has created widespread anger among old (4P) CMAs.
Current CMAs are far behind current CIMAs and so whatever Thompson claims , CIMA & CGMA will knock CMAs out in few years ahead.
Sincerely,
Old CMA