Paul Sharman says that he's trying to save the management accountant community. Actually, he sounds like he's trying to save the nation.But it looks like he may have to save China first.
As president and chief executive officer of the Institute of Management Accountants, Sharman has been struggling to hoist his professional organization out of a decade of doldrums and decline.
Over the last 10 years, the IMA's membership has dwindled from almost 100,000 to barely 70,000.
That trend, Sharman said shortly before the institute's annual meeting and convention in Boston in June, runs contrary to the increasing importance of management accountants in a business world that has been laid low by accountancy. And the reversal of that trend may start in countries where concepts of the role and authority of accountants have not yet solidified.
Distressed that Americans still think that "accountant" is synonymous with "auditor," Sharman and the IMA's board of directors have decided to cast their institutional enlightenment on other countries. Rather than trying to establish the respectability and authority of management accounting in the United States first and then go global, the IMA plans to go global and then bring the message home.
"We aren't a body of 70,000," Sharman insisted. "We represent a million people in the United States. Of the 4.5 million management accountants in the country, a million of them should be CPAs. We represent them and ten to 20 million people elsewhere in the world."
The Department of Labor estimates that only about 15 percent of the 5.5 million people in finance and accounting are actually CPAs involved in public accountancy. The rest, said Sharman, are involved in management - and thus gather under the umbrella of the IMA.
Sharman has nothing against the American Institute of CPAs, but he wants it known that though certification in public accountancy carries a certain legal authority, the CPA designation is an entry-level position.
The IMA's certification in management accounting, or CMA, he said, is an advanced designation most useful to corporate financial leaders - people who need a deeper expertise in the science of money.
"We're saying that the accountancy profession in America is a broken-down, wonky old crock premised on a broken construct - the idea that you can inspect quality into a product [rather than build it in]," Sharman said. "That never penetrated accountancy, because that would disrupt the interesting relationship between the government and the accounting firms and the huge revenue streams that pour into colleges, universities and lobbying."
The corporate financial leaders who need the CMA, Sharman said, include several million Chinese financial leaders. People-numbers out of China are always big, but that doesn't lessen the impact of a number like 12 million. That's how many Chinese are taking accounting examinations this year.
The advantage in China, Sharman said, is that Chinese financial leaders recognize that the overwhelming authority given to public accountants, rather than management accountants, is "an old, broken-down logic," and that therefore the IMA doesn't have to sweep away an old perception.
"What the Chinese want," Sharman said, "is accountancy competence and capacity in all their corporations in their new market economy, and that requires accountants. It seems weird for us to be saying this, but from a marketing perspective, we see it as, 'Today the world, tomorrow America.'"
The IMA in China will be structured differently from in the United States, with an emphasis on education and certification.
From Munich to Dubai
IMA chair Carl S. Smith, Ph.D, CMA, CFM, CPA and dean of the Barney School of Business at the University of Hartford, Conn., feels that the social aspects of the IMA are also of declining importance in the United States, explaining the decline in membership.
"I don't know how the council-chapter model works in any location these days," Smith said. "It's a tough model to run in this environment. You don't have the people anymore, due to the pressures, and I don't know how well it will do internationally."
The institution has just started a chapter in Munich and is monitoring how well it works in that organizational structure. The extent of its success may dictate how the IMA goes on to operate in other countries.
Middle Eastern countries are also showing interest in IMA activities. Membership there has doubled in the past year. Due to the difficulties of traveling to the United States, those in the Arab world are interested in forming chapters closer to home. The IMA's first international conference will be held in Dubai in May 2006.
"We have to sustain the membership we have in the Middle East and grow it," Sharman said. "We've reached a critical mass there. We've overcome inertia. We have momentum."
Change at home
The IMA's global initiative comes after an extensive retooling of the organization's governance. Early in 2005, the board of directors laid out five strategic imperatives: to improve the structure of governance, increase certification, develop branding for the IMA and the CMA, improve member value, and attract and engage the members.
"Governance was a really big piece of the initiative," Smith said. "We found out that our governance structure was overdue for change. We hadn't done anything with it for almost ten years. We'd rearranged the deck chairs on the Titanic a few times, but we never went into a real review."
The institute found that its board was "under-empowered" and failing to engage well with the institute's 12 standing committees. The board is composed of 52 people, including regional representatives, committee chairs and officers.
"We knew we had to do something, and we had to do it quickly," Smith explained.
The solution was to have the board members form committees, thereby making the members more active, more empowered and more engaged with the organization's decisions, strategies and activities.
These changes were premised on the larger changes that have taken place in accountancy and the IMA.
Sharman said that in its 85 years of existence, the IMA has evolved from a social function to a professional advocacy and certification function. Over half the institute's members have or are pursuing certification in management accounting for financial management.
More recently, Sharman said, accounting failures in several major corporations have highlighted the failure of auditors to prevent or detect problems, and the parallel importance of good, ethical management accounting.
In other words, in Sharman's opinion, the IMA's time has come, and its internal changes have prepared the organization to take advantage of it. The staffing structure has been overhauled, with the creation of a project management office, a new research and practice vice president, a new Center of Excellence, a revamped and expanded marketing department, and a new member services vice president. The Lifelong Learning Center has been eliminated.
The institute is now branding its CMA program as "Professionals driving business performance." The IMA itself is being branded as "Advancing Your Profession." "You're going to see us getting more and more vocal out there," Sharman said.
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