One year on: how successful was CIMA's joint venture with the AICPA?

The Association is going through an interesting time. Back in January 2017, CIMA and the American Institute of CPAs (AICPA) set up a joint venture organisation, the Association of International Certified Professional Accountants, or the Association for short.

The overall aim of the Association is to drive the accounting profession around the world, bringing together public practice and management accounting.

Accountancy Age caught up with Andrew Harding, the Association’s chief executive – management accounting, to talk about its global educational offerings to accountants and the future of the organisation.

Andrew said: “We have a unique proposition in that we recognise there is management accounting and there is public accounting…and both complement each other.”

Membership of the Association amounts to 650,000 people, including students, around the world.

“That is not just a powerful voice and endorsement, but it also means we’re operating on a huge scale.”

What is management accounting?

Twenty to thirty years ago the traditional accounting route was to train in practice, qualify, then move into business.

If you want to do this now, the reality is that you will probably have to retrain because “over time things become far more specialised, far more nuanced, and what you’re trying to do and achieve changes and moves.”

Andrew explained that accountants are increasingly looking to the future “rather than the traditional rear-view mirror approach of accountants where you’re reporting on what happened last year”.

They are operating in decision support roles, involving gathering data, presenting this to boards and decision-makers, and therefore helping them to make the most informed decisions they can.

“In many ways, what happened last year is done and dusted, and you need to be setting yourself up, and planning, and measuring the business for what’s going on today and what’s going on in the future.”

Management accounting is a much broader role than just finance.

“You see what’s happening across the business, you’re looking at external and internal factors, you’re looking at hard and soft measures. Increasingly, management accounting roles are seen as business partnering.

“Rather than sitting in a traditional back office accounting department, management accountants sit beside business managers and they are really helping them day by day in the decision-making, whether managing projects or going to the board for a decision, looking for funds, or reporting.

“They are front-line in the businesses, ensuring it makes the right long-term decisions, and enabling managers who don’t have those skills to be effective and get results.

“If you want a broad-based business career, I can’t think of many better places to start than management accounting.”

Starting in accountancy

To anyone starting out in their accountancy career, Andrew said: “Think about your skillsets, think longer-term about what your ambitions are and the kind of role you would like to have.”

If you’d gone back ten years to just before the financial crisis, university graduates were saying they were going be a millionaire by the time they’re 30. A year later, they were saying they want a proper job, in a proper business, where they’re appreciated for what they do.

“For us as management accountants that was ticking all of the boxes. We had a huge growth in interest from both undergraduates and businesses, who decided they needed to build their management accounting capabilities and manage their risks better.”

Embarking on the path to management accountancy is exciting and can lead in different directions.

“With someone starting as a management accountant, their traditional trajectory is to get to CFO and that is true for a number of people, but we see a number of others going elsewhere.

“For example, someone has been finance business partner to the marketing director, and when the marketing director moves, suddenly they are the ones who know the most about managing marketing and so become the marketing director.

“You don’t need to be a do-er you need to be a manager and understand the subject matter. You need to be a strategist.

What does the Association offer to accountants?

So how do you get to follow this career path?

CIMA has two main qualifications. One is called the Certificate and is aimed at people coming out of school or university having done a non-finance subject, providing them with the basics of business and accounting.

“Anyone can start that – any degree or any school. It’s open access, non-discriminatory. If you want to have a go, you can. It’s given huge opportunities to people, not just in this country but around the world.”

Then there is the professional qualification, which has three levels – Operational, Management, and Strategic.

“Each level has learning and competence attached to it, which are derived from what businesses expect people to be able to do, and this is assessed in different ways. Each stage contains three tests of knowledge, and there is then a case study which brings together that knowledge and presents it in a business context.”

The case study involves having a real-life problem thrown at you.

“Twenty minutes into your test you might get an email from the finance director saying ‘XYZ – can you please advise in twenty minutes’ time?’ It gets as close as we can to simulating the work environment.”

Ultimately, CIMA offer everything from apprenticeships through to CPD programs.

“Apprenticeships create more choice, they’re a different type of opportunity. They are relevant and drive key skills. It’s all based around the idea of ‘by practitioners for practitioners’.”

How is the learning delivered?

People can choose to study these qualifications either while they are working or full time, though typically people work.

Some universities build the curriculum into their programs so people graduate having already completed part of the qualification.

“We describe it as professionalising degrees. I think this is really neat and it gives people a kickstart. It’s far more convincing to be able to say ‘I’ve started my professional studies’. By having a degree professionalised you start to tick that commitment box.”

Learning is delivered in numerous ways, though there has been a significant move from classroom to online teaching.

Online learning spans simple learning packages to complex virtual classrooms, which means there’s plenty of room for flexible studying.

“If you want to study late at night you can, if you want to get up early and study you can, if you want to study at lunch time you can, or you can even study on your mobile device on a two-hour train journey. It’s completely liberating and fits in with people’s lifestyle.”

CIMA and the AICPA

Andrew agrees the joint venture between the AICPA and CIMA has made it easier for accountants who train with the Association to take their career around the world.

“The CIMA qualification has always been portable, but primarily that portability was around the Commonwealth, and then China and Central Eastern Europe. It has never been easy to get recognition in the United States.

“For management accounting it was important for us to bring this membership together. It means creating great management accounting in the US and getting the influence of American business practice into what we do.

“That portability alone increases acceptability in the world’s largest economy. If we go back to the founding of our venture we probably had about 1000 CIMA members in the US, and now we have over 50,000.

Across the world, we’re seeing a push for management accounting skills. In particular, the Association offers senior finance professionals globally the chance to future-proof themselves and fill in knowledge gaps through concentrated intense programs.

“Very often we forget that if you’re the CFO in an organisation it’s quite a lonely place to be. Who do you go to to ask questions or share ideas? But if you have been through one of these programs, then you’ve got people working at your level to talk to.”

The future of accounting

The idea that good management accounting only comes out of the UK and US is “unrealistic” now.

“I’m sure over the coming years we’re going to see change and innovation coming out of India and China, and probably Africa. The most innovative banking right now is coming out of African countries, which have gone straight from almost nothing to mobile banking.”

Continuing professional development is also an area of increasing change. Just like products can become obsolete, knowledge can become obsolete.

Robotics are starting to challenge different professions, particularly when it comes to knowledge.

Andrew suggests one of the biggest changes is expectations around transactional and processing skills, and even technical skills.

“Technical skills are now a given – you’re expected to be able to do it. What differentiates you is how you go about it, how you influence, how you manage your relationships, how you understand business models.”

Another challenge is educating people who have worked in the accounting industry for many years, and started when it was quite different.

“We sometimes say ‘learn, unlearn, relearn’. It’s a cycle. We need to change this idea that the original qualification you do in your twenties will suffice and you won’t have to do anything else until retirement. That’s long gone.

“A lot of the knowledge you gained 15-20 years ago might be obsolete. Traditionally you had this huge spike of learning at the beginning of your career and that set you up well, now it’s much more about continuous learning.”

The Association are currently doing a ‘Mind the Gap’ campaign which is, in essence, the notion that your initial studies provide a good baseline but as time moves on, individuals must take responsibility to keep learning.