Chartered Global Management Accountant
The Chartered Global Management Accountant designation is a recent joint offering of the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA). Launched in January 2012, the CGMA is supposed to indicate expertise in the areas of management accounting and management reporting, which apply accounting expertise to activities such as:
- Performance measurement
- Management decision support
- Corporate strategy
- Identifying business opportunities
- Making investment decisions
- Risk management
- Asset protection
Management accounting involves the collection, maintenance, analysis and application of both financial and non-financial data and metrics.
The Sales Pitch
In a June 4, 2012 press release, the AICPA offered five reasons why a CPA should consider adding a CGMA designation.
- According to a survey by the AICPA and the CIMA, 80% of CEOs would prefer a job candidate with a CGMA designation to one without it. Additionally, 75% replied that they would like existing financial personnel to obtain a CGMA.
- Because management accountants have a broad skill set and are trained to use measures of performance beyond purely financial ones, they can add unique value in organizations' decision-making processes.
- CGMAs have above-average agility and adaptability, key qualities in rapidly changing business environments.
- As a global designation, CGMAs have the mobility to move to other departments within a company and around the world.
- The CGMA creates a path to so-called "C-Suite" positions because holders have the skills to participate in critical business decisions.
Critiques of the Sales Pitch: The AICPA's sales pitch for the CGMA is subject to a number of critiques.
Here are some, keyed to the reasons listed above.
- CEOs are far removed from the hiring decisions that will affect the vast majority of CGMAs. Also, few have accounting credentials or expertise in the field and are unlikely even to have heard of the CGMA before being surveyed. As a result, the value of this survey is highly questionable.
- Just because a given functional area is important, it does not necessarily follow that a new credential related to it is either necessary or valuable in itself. Moreover, it has yet to be proven that holders of a CGMA are any more skilled, on average, than experienced management accountants without one.
- Again, the CGMA is too new for anyone to judge whether its holders are any better, on average, than other people in the field without it.
- Once more, given that the CGMA is new and largely unknown, it has no track record in promoting mobility.
- Given the newness of the CGMA, this is yet another unsubstantiated prediction not supported by fact.
Furthermore, it should be noted that neither a CPA nor an extensive background in accounting typically is necessary to enter the fields of management accounting or management reporting. Rather, as is true of many business and financial disciplines, on the job training is often the key to building expertise in these areas.
In order to receive the CGMA designation, one must first be either a voting member in good standing of the AICPA (that is, a CPA) or a member of the CIMA. Additionally, one must have at least three years' experience in management accounting.
For a CPA, this means meeting one of these four sets of minimum requirements:
- Three years of experience in financial accounting, internal audit or management accounting, either in business or in government
- Two years of experience in financial accounting, internal audit or management accounting, plus one year in public accounting
- Three years of financial or management accounting experience on a consulting basis
- Three years in the internal management accounting function of an accounting firm
Starting in January 2015, an examination will be administered to applicants for the CGMA.
Someone who is not a CPA but who obtains the CGMA may not present himself or herself as a CPA, which must be earned separately.
Being designated as a CGMA is free for members of the CIMA. For members of the AICPA, becoming a CGMA costs $150 per year, beginning in July of 2012. For members of both the AICPA and a state CPA society member, the fee is $100 per year.