by Joshua Herbold, PhD. CPA, MSCPA Secretary/Treasurer

In this blog post, Josh will address the CON side of the proposed venture between the AICPA and CIMA. Scroll down to see previous posts on this issue from President Brenda Byrnes and MSCPA Director Clint Morrison.

Josh Herbold, MSCPA Secretary / Treasurer

The American Institute of CPAs has proposed a joint venture with the Chartered Institute of Management Accountants (based in the UK). While there are some benefits to such an endeavor, I believe this proposal is, overall, not in the best interests of CPAs for the following reasons:

1. It dilutes the “CPA” brand in pursuit of membership growth
2. The AICPA is trying to be too many things to too many people
3. The value of the CGMA designation has not yet been established in the marketplace
4. Closer to home: For non-CPA members, the Montana Society of CPAs will be providing benefits (i.e., incurring expenses) with no control over the revenues from those members

The following paragraphs explain these points in more detail.

Those members who have been around for a while probably remember when the AICPA proposed to open AICPA membership to non-CPAs. These non-CPA members were to be called “Cognitors,” and the proposal went on to state that the term would also refer to CPAs. This proposal was soundly (and wisely) rejected by the AICPA membership. After all, what would be the point of becoming a CPA/Cognitor if others could qualify for the same designation without completing the “four Es” (education, experience, ethics, and the CPA exam)? How would a CPA signal to clients and employers the extra effort and dedication that they put forth to become more qualified? Obviously, it would be difficult for anyone outside of the profession (and even for some of those within the profession) to determine how a Cognitor had earned that credential, and AICPA members were rightly concerned about this brand dilution. The current proposal makes things even more confusing by using the same acronym for the new organization as the American Institute of CPAs: the Association of International CPAs. This proposal allows for both CPAs and non-CPAs to earn the CGMA (Chartered Global Management Accountant) credential and become members of this new organization, and thus has the same potential as the failed “Cognitor” designation to dilute the CPA brand.

Related to that point, one of the stated goals of the joint venture is to “further advance advocacy, achieve economies of scale and better support accounting professionals.” While I agree that all of these are worthwhile pursuits, I have to wonder which accounting professionals the AICPA has in mind. Not all accounting professionals are CPAs (even though I believe that the designation and the work required to achieve it would benefit most accounting professionals). Is it the job of the American Institute of CPAs to advocate for all accounting professionals? Or would our profession be better served by having the various professional groups (the AICPA, the IMA, the ACFE, and others) participate in a consortium of some sort? Furthermore, “advocacy” is a tricky issue even within a given jurisdiction; it gets trickier when an organization tries to represent multiple jurisdictions, which is exactly what the AICPA intends to do. The AICPA is trying to be everything to everybody—a strategy which usually ends up satisfying nobody.

And the fact is that the overwhelming majority of CPAs have opted against obtaining the CGMA designation. Prior to this year, current CPAs were grandfathered in and could obtain the CGMA designation simply by checking a box on their membership renewal and paying an extra fee. Even with no other effort required to obtain the designation, “90% of the AICPA’s members declined multiple invitations to become CGMAs.”[1] Also, when faced with the choice of which designation or designations to pursue, students have yet to see the value of the CGMA. (See http://ipassthecmaexam.com/cgma-designation/ for one blogger’s take on the decision between the CGMA and CMA designations.)

Finally, we get to some details of the joint venture that could have an impact on our state society. If the joint venture proceeds, CGMAs who are not also CPAs will become members of their respective state societies through their membership in the joint venture. On the surface, that’s great! But for those non-CPA members, dues will be set by and collected by the joint venture, then shared with the MSCPA. This means that we (the MSCPA) will be providing non-CPA CGMAs with all of the same benefits of membership that every member of the MSCPA receives, yet we will have no control over the dues that these members pay. While we expect the number of these non-CPA CGMAs in Montana to be small, incurring expenses when you have no control over your revenues seems like a risky strategy at best, and a losing proposition at worst.

[1] While the AICPA has noted that there are more than 150,000 CGMAs worldwide, only 40,000 of those are in the US. For more details, see: Miller, Paul B.W., and Paul R. Bahnson. “Transparency, integrity, prophecy and the AICPA merger.” Accounting Today 1 Jan. 2016: 22. Academic OneFile. Web. 4 Mar. 2016.