Take a Look at Management Accountants

By Pamela Babcock Feb 14, 2012
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HR lea​ders might be seeing a new ally among managers—chartered global management accountants (CGMAs).

The American Institute of CPAs (AICPA) in New York and the Chartered Institute of Management Accountants (CIMA) in London launched the new designation on Jan. 31, 2012. The organizations want to elevate the management accounting profession and to help address what they say is the lack of measurement of nonfinancial information.

“It’s clear that we really are caught up in something big and uncertain from a perspective of running corporations these days,” said Arleen R. Thomas, CPA, CGMA, senior vice president of management accounting for the AICPA. Thomas cited globalization, innovation, financial crises, natural disasters and the shift of economic power to Asia as some of the challenges that global corporations have had to navigate.

“It is a time of change for everyone,” Thomas said. “One of the things that’s quite apparent is that companies need individuals working for them that can drive sustainable business and who look to the long term and understand the value of the human dimension.”

AICPA Says There’s a Need

CPAs who become chief financial officers (CFOs) or hold other management accounting roles have developed the ability to connect financial and nonfinancial information and guide internal decision-making. The AICPA said they often have the depth and breadth to understand business from many perspectives.

It’s a role that meshes well with HR’s duties. According to a recent global CEO survey, most respondents said that the human dimensions of business—customer and supplier relationships, talent development and intellectual capital—will be the focus in 2012 and 2013.

Three-quarters (75 percent) of the 280 CEOs polled online by Oxford Economics, based in Oxford, England, on behalf of the AICPA and CIMA said their organizations could do a better job measuring and reporting effectively on such nonfinancial value. Responses came from CEOs in 21 countries.

The AICPA and CIMA released a paper based on the research, Rebooting Business: Valuing the Human Dimension, at the launch of the CGMA designation. Just 51 percent of CEOs said their organizations measure the value of nonfinancial assets “well” or “very well.” And only 12 percent said they turn to their finance teams for help with the task.

Details on Designation

In the U.S., the CGMA designation is available to AICPA regular members who have at least three years of management accounting experience or are members of CIMA. The annual fee is about $150, or $100 if the individual is a member of the AICPA and their state CPA society.

“We’re reinvesting that into thought leadership, tools and other materials to benefit our members and to elevate the discipline of management accounting,” said Jonathan B. Cox, a spokesman for the AICPA.

There is no additional competency assessment, but one is scheduled to be added in 2015. However, Thomas noted that all who receive the CGMA designation in the U.S. must pass the rigorous four-part Uniform CPA Examination. Outside the U.S., the CIMA curriculum includes 10 professional qualification exams that accountants must pass before joining the organization.

“We’ve established quality standards so that an employer in Mumbai, for instance, will know that a CGMA there is equivalent to a CGMA in New York or elsewhere,” Thomas added.

The CGMA is not the only management accounting credential available. The Institute of Management Accountants, a trade association based in Montvale, N.J., offers a designation called the Chartered Management Accountant (CMA). To receive the designation, individuals are not required to be CPAs, but they must have a bachelor’s degree in any major; take a two-part exam on topics such as financial planning, performance and control, and financial decision-making; and complete two continuous years of experience in management accounting or financial management prior to or within seven years of passing the exam.

To Whom It Will Appeal

In the Oxford Economics research, 82 percent of the CEOs said a job candidate with a CGMA credential would be more appealing than someone without one. And about three-quarters (76 percent) said they would want current employees to obtain this credential.

Thomas said management accountants with the CGMA designation will offer financial expertise, strong business and communication skills and the ability to “connect the dots” and to partner with the business while being able to see the big picture.

The AICPA hopes to have 40,000 members with the CGMA designation by 2017. Approximately 140,000 of the AICPA’s 377,000 members work in management accounting. CIMA members have the CGMA designation automatically, because their original credential was for management accounting.

But Will It Be a Difference Maker?

Bob Laux, senior director of financial accounting and reporting at Microsoft Corp. in Redmond, Wash., has the new designation and said he’s “excited about it.”

“I've always been concerned that we focus too much on the external kind of numbers such as generally accepted accounting principles (GAAP) numbers and not the true value drivers,” Laux said. “There are silos in corporations where human resources may have great metrics that may not be getting the attention they deserve because the financial staff is not thinking about those correctly and not thinking about real value drivers.”

Another newly minted CGMA is Elizabeth Duffrin, CFO for EE Technologies Inc., a Reno, Nev.-based electronics manufacturing company.

“CGMA is a valuable designation for global companies,” Duffrin said. “Since we are a company continually looking to expand worldwide, these credentials are helpful.” Duffrin said CPAs “will want to seek this designation—especially if they want to work for global companies.”

Pamela Babcock is a freelance writer based in the New York City area.

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