I’ve noticed that you’re partnered in the past with the Institute of Internal Auditors and the Association of Certified Fraud Examiners and even had the same marketing person. Are you still separate organizations?
Thomson: All those organizations are separate, but we have many agreements and partnerships all over the world where they make sense, expanding our footprint while serving our mission. So we have a mutual recognition agreement with a major association in India, for example. We have various advocacy and research partnerships with other global accounting associations. That’s important because the objective is to serve your profession. I worked for 24 years at AT&T in a cutthroat, competitive telecommunications environment, so with all due respect to my peers at AICPA and CIMA who are incredibly respected association executives, I have significantly more experience in the competitive environment. In some sense it’s unfortunate that we even have to use that word in a not-for-profit societal type of environment, but it is what it is. It’s part of what the environment brings you, and as I said, while IMA will always stay true to its mission of serving professionals and society, if competition faces us we will approach it in a fierce but respectful manner. It’s important that we stand up and be counted. Again we highly respect AICPA and CIMA. We just are troubled by the manner in which they are awarding CGMAs during this three-year period from January 2012 to January 2015.
Accounting Today reached out to the AICPA and the CIMA. The AICPA sent this response from senior vice president of management accounting Arleen Thomas to some of our questions.
Is the new CGMA credential a sign that the AICPA plans to merge with the CIMA?
Arleen Thomas
The IMA contends that the three-year grandfathering period for getting a CGMA doesn’t include a test, which they say should be required. What’s your response?
Thomas: All CGMAs will have had some form of rigorous testing. Outside of the United States, all CIMA members who are eligible for the CGMA have followed a very thorough multi-year curriculum and have taken a very rigorous set of examinations—10 of them including a case study. In the U.S., those initially eligible to receive the CGMA credential during the first three years must be a CPA member of the AICPA—that is, they have passed the very challenging Uniform CPA Examination and have met educational requirements set by their state boards of accountancy—and have at least three years of experience in management accounting.
So, by definition, all new CGMAs would have gone through the CIMA examination process or have taken the four-part CPA examination and have had the equivalent experience component. As a matter of fact, approximately 40,000 AICPA members who meet the CGMA criteria in the U.S are in top C-Suite roles, such as CEOs, CFOs, Comptrollers, etc. In three years, we will add an additional assessment to the CGMA program, and all CGMAs, those now and in the future, will be required to commit to comprehensive ethical standards and ongoing education to ensure their skills remain up to date with market needs.
What about the free, six-month auto enrollment period?
Thomas: It is only fair and equitable to offer the opportunity to become a CGMA to those AICPA members who already have extensive work experience in management accounting and have passed the Uniform CPA Examination. The six-month grace period gives members a chance to have the CGMA credential, receive all the CGMA benefits and experience membership in the largest and most experienced management accounting community in the world.
Charles Tilley
Could you address the IMA's concern that the lack of a test during the three-year grandfathering period for the CGMA credential, and the free six-month auto-enrollment period, would lessen the value of the training that management accountants need to do a proper job for their companies?
Tilley: I think it is very important to remember that the individuals who will qualify to use the CGMA credential from Jan. 31, 2012 are all CPAs who have, therefore, both qualified for this credential, including obtaining an accountancy degree. They have then had a minimum of three years practical experience in business which two years must have been in the business finance environment.
The IMA has also speculated that the CGMA could be a step on the path toward an eventual merger between CIMA and the AICPA. Do you have a response?
Tilley: This is a new joint venture between the AICPA and CIMA, and a merger isn’t part of the current plan. Both organizations intend to work together to take advantage of each other's respective strengths. When the success of the JV is established, other options, including a merger, could be considered in the future.
5 Comments
I feel that the AICPA's move has caused a new marketing issue for IMA; mainly, now I have to explain how my CMA is valuable and is not the same as the CGMA.
This move caused a laugh in our CPA firm since the only two CPAs to receive the AICPA's invitiation were myself and the newest CPA; she has four years total accounting experience and just received her CPA last year, while I have 20+ years of management accounting experience and am the only one that passed the exams to call myself a true Certified Management Accountant. It bothers me that I worked so hard to have the AICPA cheapen my CMA designation by tyring to compare it to a "give away".
Posted by: meyer91 | March 7, 2012 7:25 AM
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I am not too worried that by offering AICPA voting members with three years of experience CGMA designations will dilute the value of CGMA. With this strategy, there will be immediately thousands of exiting CPAs and CIMAs becoming CGMA. We are talking about a huge market share here. At the end of the day, those grandfathered CGMAs did pass the tough CPA exams, met 150 hours requirement and had three years experience. It already provided AICPA at least reasonable assurance about the competence of new CGMAs. After three years when CGMA had more CPA members being enrolled and got traction in the market, the new CPAs would be required to pass the exam to earn the title. Suppose in 10 years time CGMA designation becomes successful, who is still going to remember the CPAs being grandfathered for the CGMA.
On the other side, if right now, CPAs are required to take a tough exam to earn this fresh new CGMA, who is going to bother to spend the time to take it which at this moment had no history or market recognition. CPAs including me would probably instead choose to take CMA or CIMA designation which were already recognized for a long time. CGMA designation then would have a tough road to be successful.
Even the CGMA designation eventualy failed, CPAs had almost nothing to lose (except USD150 per year). CPAs are still CPAs. AICPA adopted a very smart strategy to promote CGMA. They truly had talented people behind the scene to plan all this. I am very proud of being a member of this organization. I fully support this CGMA designation and hope it will be sucessful.
Posted by: lugreat | February 4, 2012 11:19 PM
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I have a CPA, CMA/CFM, CIA and CFE, all in active status. I value all of these because I had to work for them and satisfy the various requirements. In my opinion, "giving away" the CGMA just because one has passed the CPA exam and worked in industry does lessen its value. This doesn't mean I won't accept it, but it appears to be a quick way or means to generate fees to fund the start up costs of the program. While this may not be the intent, the appearance is there.
Posted by: wantoku | January 31, 2012 3:39 PM
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I have been a CPA and a CIA for almost 30 years, and during my career I have worked in numerous positions of responsibility in the controller's organization, internal audit, planning/analysis and budgeting, corporate treasury, performance reporting, internal control, major capital projects, etc. (predominately in multi-national, multi-billion $ corporations). During this time I advanced to the levels of Controller, V.P. Accounting, and CFO. Throughout my entire career I was always very proud and respectful of my CPA and CIA, as we all should be, due to the intense level of study, understanding, experience and rigorous testing required to be awarded these certifications. Also, I am currently, or have been, a member of the AICPA, IIA, IMA, AAA and the TSCPA. It is with this background that I am trying to understand the impact of the recent AICPA/CIMA announcement of the new designation of CGMA. I agree with the comments above from both Arleen Thomas and Jeffrey Thomson in the importance of management accounting and in their support in promoting the recognition and certification of knowledgeable, experienced, professional management accountants. The IMA, as discussed, has done an excellent job of this certification and promotion with their long standing and well respected CMA. The major concern that I have, in agreement with Mr. Thomson, is the initial open enrollment period of 3 years. During this period any voting member of the AICPA with 3 years of any form of management accounting experience (or internal audit or governmental accounting experience, according to the CGMA website), or 1 year at a CPA firm and only 2 years of the other stated experience, can be designated a Chartered Global Management Accountant - with no examination of their actual expertise in that profession. The CGMA website makes a point that there is "no exam requirement" just below where they state "Management accountants have an understanding and experience of business that goes well beyond financial accounting". As I mentioned, I have a great deal of respect for the current holders of CPA's, CMA's and the CIMA certification. However, the opportunity seems apparent for many bright, hardworking young CPA's to receive the CGMA designation without having the depth of expertise to carry the capability and responsibility that the certification seems to imply. I am concerned that the granting of this new title without specific measurement or verification of the recipients full qualifications, such as is required for the CMA, will potentially weaken, not strengthen, the credibility and respect for the management accounting profession. I would like to hear further discussion of the reasoning for this 3 year exception period. The CGMA website states that, "More information regarding how to qualify will be available in the coming months", hopefully additional detailed requirements, and potential additional vetting, will be forthcoming. Until then, these concerns will continue to exist.
Posted by: jbhsource | December 22, 2011 7:21 PM
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Just as CPAs have areas of specialty in the test they take (taxes, auditing, regulatory standards), CMAs do also (decision analysis, risk management, cost and performance management). For the AICPA to bestow the CGMA certification on those who have passed the CPA test seems as though it will dilute the value of the CGMA as compared to the CMA.
Posted by: lmbliley | December 21, 2011 3:17 PM
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