By Cheryl Meyer
January 18, 2022
Earning the right credentials can give accounting graduates an advantage when seeking jobs or progressing in their careers. Having earned a credential “is a signal to the market that you put your nose to the grindstone, have [certain] basic skills, and are able to complete something from start to finish,” said Wendy Tietz, CPA, CGMA, Ph.D., accounting professor at Kent State University, in Kent, Ohio.
But knowing which, if any, credentials to pursue isn’t easy. Students have many questions: What is the difference between a license and a designation? Can I get both a CPA license and a CGMA designation? Can I earn the CGMA designation without becoming a CPA? What’s the best option for the kind of accounting I want to practice?
"Students are confused," stated Monte Swain, CPA, CGMA, Ph.D., professor of accountancy at Brigham Young University in Provo, Utah. "It's a rare student who comes in and knows exactly what he or she wants to do." That is why, Swain said, that it's vital to counsel students and ask them a pointed question: "What are your professional aspirations, and what kind of work do you want to be able to do in your life?"
Faculty can best advise students by learning about different credentials and knowing which might be the best option for a student given his or her life circumstances and desired career path.
But faculty aren’t always aware of the options open to accounting graduates. In the United States, for instance, accounting faculty often encourage their students to pursue CPA licensure, since the CPA is a widely known and respected credential.
"It really does designate that you have a strong audit, tax, and some technology background," said Annette Nellen, CPA, CGMA, Esq., accounting professor and director of the tax program at San José State University, in San José, Calif. To hold a CPA, she said, "you have to pass a rigorous exam and maintain your education and your license, and follow rules of conduct to keep a high ethical standard.”
The CGMA designation, on the other hand, is "gaining traction but is still the new kid on the block" in the United States, said Tietz. She said her students had not heard of the CGMA designation before taking her Advanced Management Accounting class, where they study some of the material from the CGMA Finance Leadership Program (FLP), a case-based digital assessment program that students must complete in order to earn the CGMA designation in the United States.
The designation CGMA, which stands for Chartered Global Management Accountant, was created by the AICPA and the Chartered Institute of Management Accountants (CIMA) in 2012. It indicates that a designation holder is highly proficient in finance, operations, strategy, and management. There are various paths to earning a CGMA designation, depending on a person's level of education and professional experience.
The CGMA designation can be a good option for students looking to pursue careers in management accounting, as it is “essentially a designation that allows you to expand your knowledge base within corporate finance and accounting," said Patrick O'Meara, CPA, an assistant professor of accounting and finance at Niagara University in Lewiston, N.Y. Most students in his department plan to earn the CPA, he said, but noted there is also a need for students to develop skills associated with the CGMA designation since employers are looking for management ability and other related attributes.
Overall, the credential gives students a solid background of management accounting, finance, and knowledge of International Financial Reporting Standards, and the required case-based exams build their critical thinking, O’Meara said. He recently began using the FLP in his Advanced Management Accounting and Strategic Accounting Analysis courses, and is initiating the CGMA pathway into an undergraduate Cost Management Systems course this semester.
The CGMA designation might be a good fit for:
- Students who aspire to leadership roles. The CGMA designation can give students "bench strength" by teaching them how to "think like a manager" and understand how a company works, and can help them move forward into management and leadership positions, either at public accounting firms or other types of organizations, said Swain. His department has begun offering a CGMA component to undergraduate and graduate students in conjunction with the FLP.
- Nonaccounting majors. Bachelor’s degree graduates in majors other than accounting are eligible for the CGMA designation. Nellen suggests that business majors look into the designation, since it can be beneficial for those going into the corporate world.
- Holders of U.S. CPA licenses who desire an additional credential. Having both a CPA credential and a CGMA designation "opens up a few more doors and builds and integrates a significant set of tools," Swain said.
Key facts about the U.S.CPA and CGMA
Faculty can help students understand the U.S. CPA and CGMA paths by giving them a clear explanation of how these designations are similar, different, and complementary. Here are key points about the U.S.CPA and the CGMA designation, and about receiving the CGMA designation through the AICPA:
- The U.S. certified public accountant (CPA) is a license issued by state boards of accountancy, while the CGMA designation was created by the AICPA and CIMA.
- Since CPA licenses are state-issued, CPA candidates do not have to be members of the AICPA. Those who gain a CGMA designation through the AICPA must be members of the AICPA.
- Candidates for CPA licensure must graduate with a bachelor's degree and have completed 150 total academic credit hours. CGMA candidates must hold a bachelor’s degree in accounting, finance, or business.
- CGMA candidates must complete the FLP. The FLP has three levels: operational, management, and strategic. Candidates may be able to start the program at a higher level depending on their education and credentials. Bachelor’s degree graduates in accounting and finance, for instance, can start the program at the second (management) level. The program is self-paced and asynchronous, and candidates can start it at different entry points depending on their education and credentials. Therefore, the time it takes to complete will vary.
- The CPA exam includes four sections, and a candidate must pass all of them within 18 months. CGMA candidates must pass a case study examination for each of the levels of the FLP they complete. If they start the program at a higher level, they do not need to take the examinations for the levels they have waived. For instance, someone entering the program at the management level would not need to take the exam for the operational level. U.S. CPAs are permitted to take only the case study exam at the strategic level to earn the CGMA designation.
- To gain a CPA license, individuals must have one to two years of professional experience. To gain a CGMA designation, individuals must have three years of relevant management accounting experience.
- For both the CPA and CGMA designation, individuals must adhere to an ethical code of conduct and fulfill continuing professional education (CPE) requirements.
- The CPA is most often chosen by accounting graduates pursuing careers in public accounting. The CGMA designation is a good choice for accounting, finance, and business graduates who plan to pursue careers in corporate business and management.
- CGMA candidates may receive the CGMA designation through either the AICPA or CIMA. There are different pathways to the CGMA through CIMA, depending on the country you live in. Visit this site and select your region for more details.
— Cheryl Meyer is a freelance writer based in Minnesota. To comment on this article or to suggest an idea for another article, contact Courtney Vien at Courtney.Vien@aicpa-cima.com.