Last year, the AICPA Council passed a resolution related to the expansion of CGMA to other qualified professionals. What exactly did the October 2015 vote do?
Last October, the AICPA’s governing Council overwhelmingly voted to give qualified professionals in the United States, besides CPAs, a pathway to obtain the Chartered Global Management Accountant (CGMA) designation. That pathway includes education, examinations, and experience. Having met those criteria, these individuals would be awarded the CGMA and join the over 150,000 CGMAs around the world who already hold the management accounting designation.
AICPA’s Council believes that giving these other qualified professionals a pathway to the CGMA is in the best interest of business, the accounting profession, and the public. It recognizes that businesses want and need competent, credentialed professionals within their finance and accounting departments. It brings these individuals into a professional affiliation committed to integrity, objectivity, and competence, and that is grounded in lifelong learning and ethics.
How is the October Council resolution related to the current AICPA member ballot that evolves the joint venture with the Chartered Institute of Management Accountants (CIMA)?
People sometimes confuse the two issues, but they are distinct.
The current member ballot is focused on the AICPA and CIMA integrating our strategies, managements, and operations, while preserving the original membership bodies of both organizations, so we can better support both our public accounting and management accounting members. If approved by our respective memberships, the ballot will enable both bodies to realize greater efficiencies, allowing us to better address global issues critical to the public interest and capital markets. It will provide professionals working in the finance function of businesses worldwide with access to more financial and management accounting resources to better prepare for audit and assurance service professionals, and it will draw more talent into the broader accountancy pipeline.
The membership vote on the Joint Venture Evolution will end in mid-June, and its outcome will not affect the previously approved Council vote on CGMA.
When will the first non-CPAs be eligible to obtain the CGMA in the United States?
We expect to have the learning program, assessments, and experience process in place and ready for candidates in the Spring of 2017. We expect that a candidate would take approximately 18 months to complete the learning and assessment program and, depending on their employment, three years to complete the practical experience requirements. As such, the first CGMAs to be awarded will likely happen in 2018.
There is a high bar for obtaining the designation. The program has a very robust and rigorous learning and assessment program that requires a candidate to gain competencies in the areas demanded by employers. The CGMA Competency Framework is grounded in the competencies needed by world class employers.
There has been some discussion about how specific state statutes and regulations, as well as how the Uniform Accountancy Act (UAA), address accounting designations. What is the AICPA’s view?
Section 14 of the Uniform Accountancy Act (UAA) includes specific language related to professional accounting titles and their usage by licensees and non-licensees. Some state boards have asked if the prohibition on certain titles prevents non-CPAs from using any professional designation that includes the word “accountant”.
As one of the co-authors of the UAA, we do not believe this to be the case. This is underscored by the fact that there are other designations in the marketplace with the word “accountant” that non-CPAs are already using.
That being said, reasonable parties can look at the same statutory language and interpret it differently. In this case, some individuals may view the intent of the UAA language differently than we do. One of our strengths as a profession is our ability to work together, and the profession and its regulators have a long history of doing that. If a state board were to conclude that the CGMA designation may be restricted in some way, we want to understand why and work with them, their state CPA society, and NASBA to address the issues and find a constructive path forward.
How is the AICPA working with state boards to clarify understanding of pertinent statutes and regulations?
Over the past few months, we have been reaching out to state boards of accountancy and state CPA societies to assess where there may be a need to clarify statutes. AICPA Senior Vice President for Public Practice & Global Alliances Sue Coffey has spoken directly to state board executive directors, and has written to them to ask that they share their views with us. We have also said that we would visit any state board, if asked, to discuss the issue.
NASBA has pointed to the importance of boosting public understanding as it relates to the CGMA designation. What steps has the AICPA taken in this regard?
In conversations between the senior leaderships of NASBA and the AICPA, NASBA has expressed the view that the two organizations should work to avoid any public misunderstanding related to the CGMA credential as a result of a non-CPA CGMA’s membership in the AICPA. The AICPA has agreed to require non-CPA CGMAs to refer to themselves as “non-CPA associate members of the AICPA” when referring to AICPA membership. A violation of this could result in dismissal from the AICPA and revocation of the CGMA designation.
We’ve also spelled out exactly what non-CPA CGMAs can and cannot do, and we will require these members to affirm this when paying their annual dues. For example, as already prohibited by all states, non-CPA CGMAs can’t sign attest reports. They also cannot create a “CGMA firm,” and they must comply with state laws and regulations. Again, violations could result in dismissal from the AICPA and revocation of the CGMA designation, as well as referral of their activities to the appropriate state authority.
It’s important to note that this designation is principally used by individuals that work for corporations, not-for-profits, and governments. However, it is possible that a non-CPA CGMA’s expertise is needed on an attest engagement. In that situation, he or she cannot sign attest reports, and any attest work they are involved with will be overseen by licensed CPAs whose firms hold a permit and are regulated by their state boards of accountancy. In this way, non-CPA CGMAs who may end up doing work to support public accounting services are still subject to the oversight of both CPAs and state boards.
(A copy of the points outlined in the AICPA’s conversations with NASBA is available here, and information that non-CPA CGMA associate members of the AICPA will be required to read and agree to is available here.)
Not every board has had a chance to examine this issue. What would you ask of state boards who are still looking at it?
Please reach out to us. We have a long history of working with state boards of accountancy, NASBA, and state CPA societies on many important public interest issues. When state boards have concerns about the use of CGMA in their state, we want to work with them to reach the right public interest solution. We are happy to set up a phone call or video conference, or come to your state to meet in person. State board members or staff can contact AICPA Senior Vice President Sue Coffey at firstname.lastname@example.org, or me at email@example.com, and we can start that dialogue.
AICPA staff will also be attending both NASBA Regional conferences this summer and are available to discuss the issue in person with attendees.
We appreciate the opportunity to have a candid and constructive conversation with state board members. We greatly value our working relationship with all of you on this and so many other issues on behalf of the profession.
Note: Since this article was first published, Mat Young has left the AICPA. For additional information on the CGMA designation, please contact Skip Braziel, Vice President – State Regulatory & Legislative Affairs, at Skip.Braziel@aicpa-cima.com.