CIMA HAS ENTERED into a deal with US accountants AICPA to share thought leadership. The deal will see management accountants with three years’ experience and more in a position to take on new designatory letters shared between the two institutes. The deal, they hope, will promote management accounting as a global specialism.
There are no flies on CIMA chief Charles Tilley. No sooner had CIMA ditched its membership of UK umbrella body the Consultative Committee of Accounting Bodies (CCAB), it announced plans to create a new body that represents its members alongside those of US accounting body the AICPA.
Tilley is not known for grand press proclamations week-in week-out. But when he has something to say, his presence is unavoidable.
“It’s about a common designation for management accounting.
Post the financial crisis people are recognising [its importance],” said a triumphant Tilley.
So how did we get here?
Opting-out of membership of the CCAB came out of the blue, but there have been many signs that the umbrella body can cause more friction than representing a united front for UK accountancy.
Major issues in the past saw both ICAS and the ACCA question the body’s future. At the heart of their concerns were the ICAEW’s attempts to merge with other bodies. The merger attempts caused friction that saw the work of the CCAB almost untenable.
Tilley was also apoplectic over the ICAEW’s 2006 attempt to ask senior CIMA members to take up the ACA qualification, prompting Tilley to question the ICAEW’s professionalism. But CIMA’s departure from the CCAB comes about for other reasons.
The management accounting institute has voiced its dissatisfaction at the level of fees it pays to the CCAB, and through the body to the Financial Reporting Council.
The two bodies’ focus on audit saw CIMA attempt to reduce its fees to pay what it considered a fairer amount in relation to the lack of focus on management accounting. But CIMA was unsuccessful in negotiating its fees from the CCAB, which left the institute to take the nuclear option.
“[That was an] extraordinarily disappointing end to the journey, that we didn’t want to reach,” said Robin Vaughan, CIMA executive director, governance and professional standards. “The CCAB is excellent but had diminishing value for us.”
Tilley is quick to point out that although timing of the latest deal with the AICPA coincides with the CCAB departure, the two are unlinked. “There is no relationship between the two whatsoever,” Tilley told Accountancy Age.
What’s going to happen?
Tilley’s attempts to push the CIMA qualification internationally have met with some success, but little in the Americas. The institute has a modest 16,000 members outside the UK. Both of CIMA’s latest moves could enhance its international exposure. The partnership between CIMA and the AICPA will enable members who meet certain criteria in terms of experience, to carry a new set of designatory letters if they wish. But more than just a quarterly newsletter and an iron-on badge, membership of the new body – called the Association of International Certified Professional Accountants – will see a new range of services and thought leadership. However, currently details are thin on the ground, as both sets of councils still need to sign off the agreement.
Management accountancy would be promoted in the US, while the AICPA qualification would be promoted as a “worldwide standard of professional excellence”.
The venture covers a total of 550,000 members and students. The new organisation would have a board split 50:50 between the two bodies, although the AICPA would own 60% of the new venture.
CIMA also believes that quitting the CCAB could give it the opportunity to have more clout with the International Federation of Accountants (IFAC), which looks after the interests of accounting institutes globally.
Currently the CCAB is represented at IFAC by ICAEW technical director Robert Hodgkinson. Free of its UK umbrella body, CIMA will push for its own IFAC board member.
For Tilley, the last few weeks have seen him and his institute catapulted into the spotlight. Whether Tilley and his institute’s actions are viewed as positive or not will become clearer at the end of May, when the councils vote on the plan.
Working out if current and prospective management accountants are enamoured by the institute’s global reach strategy will take longer to gauge.
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