So, which Accounting Certification is for you?
With the plethora of accounting certifications and qualifications out there today, no matter what country you are in, it can be a daunting task to choose which certification is right for you. Gone are the days when if you were a young fellow who aimed toward getting the Certified Public Accountant Certification (CPA) issued by the AICPA in the US; gone are the days when you could just become a Chartered Accountant (CA) in the UK, or for that matter anywhere else in the world.
The typical certified public or chartered accountant today is just one of the many recognized, approved and qualified accounting certifications today. There are numerous others, irrespective of where you are: the Association of Chartered Certified Accountants (ACCA, International) Certification, the Association of Accounting Technicians Certification (AAT, UK), the Certified Management Accountant (CMA) & the Certified Financial Manager (CFM) Certifications issued by the Institute of Management Accountants (IMA, USA), the Chartered Institute of Management Accountants Certification (CIMA, UK & International) which is totally a tier based certification, starting with entry, managerial, strategic and TOPCIMA. If you dig deeper into the US & UK Markets, you’ll see many others, and each of them has their own following. I recently found out that there was an Institute of Financial Accountants (IFA) in the UK, and it’s a pretty major organization. Interestingly enough, I’ve never seen ANY job advertised asking for a certification from the IFA. Questionable? Who in the hell knows.
But here is what I can tell you. Accounting has become a diversified field. The certifications mentioned above are only some of the management/financial/public accountant type, and there are other new accountant types, which come with some fascinating certifications of there own. The upcoming accountant job titles you will come across now are forensic accountants, environmental accountants, project accountants, systems accountants, etc. etc. The list is never ending. Gone are the days when you trained to be a Director of Finance/CFO, Financial Controller, or simply strived to become an auditor in a public accountancy firm. However, in today’s competitive world, no matter what country you are in, it is VERY important to pick the accountancy field that you want to go into. Since each of these fields/job titles in accounting has its own relevant certification or qualification, it can sometimes be difficult to trespass from one into the other. Also note that some of these are not multinational certifications, and when going cross border, especially between 2 first world countries (the US & UK, for instance), having one kind of a background or certification can cause you quite the grief.
Take, for instance, the simple line of Financial & Management Accounting. There are people out there, and particularly recruitment consultant characters, who will try to convince you that there is a LOT of difference between Financial & Management Accountants. Well, I’m here to tell you: bull-fecking shit. Management Accountants are for incompetent business owners; financial accountants are for compliance. That statement is true, but what good is a financial accountant who can only comply? That’s no accountant; he’s a simple instruction taker.
Back to the topic at hand. If management or financial accounting is the field you want to pursue, well, CIMA is your certification for Europe and most parts of Asia. If you are in the US, CMA or CFM from the IMA is the direction you should be headed in; and despite the common ground between the two, do NOT be confused or deceived. One will not co-operate with the other. The two are essentially competitors, with the IMA fighting for international recognition alongside CIMA. But get this, the AICPA feels so threatened by the IMA in the US, primarily because they are rightly carving our a different role/job description for financial managers in firms (a very niche position that CPA/CA types aren’t meant for), that they went out of the way to cut a deal with CIMA, saying that CIMA is indeed a decent certification, and that CIMA is an institution they recognize. There was an entire article in the IMA Magazine regarding the issue, and the problem is, the AICPA cannot risk losing the value of its members within the US, so it refuses to accept the separate role or importance of Financial & Management Accountants.
But the US is not a country where all is lost. Quality matters. America is probably the only place in the world where at some level, it’s not who you know, but what you know, with the result that even today, you can succeed in industry/private sector in the US without any certifications, but only if you know what the hell it is that you’re doing. Ideally, if you are going into industry, stick to the IMA Certifications: CMA & CFM. They are relevant! AICPA has become bloated and extremely political, and let’s face it, most Certified Public Accounants really can get dull. It’s not their fault. If you sole purpose in life is to assure the work of others, your existence falls into the misery of being second for good! AND, due to the tactics and acts of Certified Public Accountants, today, if we creative financal & management accounting types get creative with our work, we get penalized. Way to go, AICPA!
Now, if you’re in the UK, CIMA is the way to go. I have seen, with my exposure to this market, and some Asian & Middle East ones, that being a Chartered Accountant always helps. It looks good, no matter what job you apply for, but it is not always relevant. Being a CA does by no means make you good at management or financial accounting; it just means you can dig yourself in papers for hours and hours and not get fed up, which, on a whole different level, is something admirable since I myself have difficulty with that. Certifications for Private/Industry Accountants in the UK with value are the ACCA, the AAT, and CIMA. Note that if you come to the UK with other certifications from other countries (other than a CA which is issed by an Institute which is authorized/accredited by the Institute of Chartered Accountants in England & Wales [ICAEW]), like the ICMA you can get in India and Pakistan, which is the Istitute of Cost & Management Accountants, you won’t get too far over here.
For some reason, the ACCA is considered a medium level certification over here. I’m not sure why; maybe they haven’t advertised or marketed enough, but ACCAs are for some reason not given executive treatment, especially not to the level of the CIMA qualified personnel. CIMA, in the UK, is considered an executive level certification, and passing it in this country means that you have stood the accounting test of time, and deserve salary, whether or not you know anything is irrelevant. Although the basic content in ACCA & CIMA is comparable, as is the basic content of the CMA and CFM in the US (with an exception ot the differences between US GAAP, UK GAAP & IFRS/IASB), CIMA has marketed themselves well, and has forged business alliances that have given them the executive reputation. So, if you want to make it big in industry as a Controller, Director of Finance, VP of Finance, or a CFO, CIMA is the Certification you should be looking that. Correct me if I am wrong, but I think you will get there with the ACCA too. It will just take longer than with CIMA. AAT, on the other hand, has been coming up with all the positive marketing they’ve been doing lately. However, I think AAT is still considered an entry level professional certification for non-accounting degree holders, and it makes you familiar with some of the technical aspects of accounting in the UK: VAT, PAYE, NI, etc. etc. Hence, the name Accounting Technician.
Let’s be honest, interesting or not, right or wrong, there is a big following that goes with the CPA and CA Certifications. So you’re always playing it safe by aiming for one of those. They may not be relevant for industry, but they will and have always held their importance, since auditing has become a vital part of big corporate money. Of course, if it has been your lifelong dream to become a public accountant, to project your affairs into other people’s business, and spend the rest of your professional life assuring others that their work is upto par, well, what can I say, by all means, go ahead. No offence meant. I have nothing against Certified Public Accountants or Chartered Accountants. I just think the role of Auditor is boring. I could never do it. I barely got through Auditing Class. Unto each his own, eh!
This article is written courtesy of VAFTA Solutions Limited.
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March 21st, 2008 at 6:32 pm
Hummm very interesting article indeed… well i am a business administration with an enphasis on accounting graduate, and i am not interested in financial accounting nor auditing, i am looking for a management accounting role so i am considering two professional certifications, either the US CMA sponsored by the IMA or the UK ACMA / FCMA sponsored by CIMA. which one is more powerful and internationally recognized? and how can you compare their level of difficulty to eachothers? your prompt feedback on that matter would be extremely appreciated. thanks and best regards.
March 22nd, 2008 at 4:01 am
Well, seeing as how you’re writing the comment from Dubai, my first question is where are you getting your degree from, and the second is where do you intend to practice as a Management Accountant. If you intend to stay in Dubai,it doesn’t really matter, because from CPAs to CAs to CMAs to CIMAs to FCMAs, nobody really knows what the hell they’re doing.
On an international level, and that excludes the USA, the CIMA has a much stronger hold and stands on much stronger ground than US based IMA does.
I think the CMA from the IMA may actually be a more mature certification. When appearing for CMA exams, you are expected to know basic accounting, you are basically being prepped for professional, practical, on the job kind of work, more, so to say, professiona/executive management/financial accounting type work. In essence, I think CMA or CFM from the IMA is what is guaged for accounting majors in university, and having seen through and read almost all of these books, I think the CMA makes for a mature accounting certification.
CIMA sponsored Certifications, however, cover both accounting and non accounting majors. They start with the basic, with the idea of converting all the jobless into some kind of accountants, and are much more commercial, which means they market at a much larger level, and are, therefore, better in the international recoginition department. I haven’t invested in upper level CIMA books yet, so I’m not sure how challenging they really are. With their syllabus, however, it seems like the last 5 CIMA papers are pretty much an IFRS version of the CMA/CFM exams, which would make it relatively similar.
However, if you ask me, I think the CMA is more respectable, because the IMA is more of an accounting club; CIMA markets to invite everyone. But then, marketing is king.
Ultimately, it depends on WHERE you are looking to work. Inside the US, definitely IMA based certifications. Outside the US, preferably CIMA. In neutral ground like Dubai, where the public arena sees both CPAs ad CAs, it’s a hit or miss, because as the economy develops, the success of the IMA or CIMA path will depend on the route the government takes towards formulating laws pertaining to businesses and financial reporting. But given the global switch to IFRS, even in the US, CIMA may make for a much safter bet. But you can’t rule IMA out, because since the US is trying to bridge the gap between US GAAP and IFRS, IMA will also offer continuing education to make you IFRS compatible as a CMA or CFM.
The choice, my friend, is a personal one.
March 30th, 2008 at 1:45 pm
That’s the question I carry on my monkey back for almost 6 months now. You look to me that you got all those CMFCACIPC certificates? Wow!
Perhaps you can turm my head in the right direction. I would like to make a certificate but I am by far no accountant. I have a finance degree and worked in controlling and in finance, and I like to keep it that way. But, my intention is some sice Finance Director in Asia or UAE. I like to read the accountants work, I like to discuss with them on a professional level, but I don’t want to be the bookkeeper who is discussing whether one bill goes down this account or the other. I already got sweet with the CFA, but its said that there is not much financial planning in there. It would be more for analysts in the outside world who consider a buyout…
So what certificate you would suggest?
Thanks, Tobi
March 30th, 2008 at 2:25 pm
Tobias,
You’re stuck upon a question that many people in the business world who deal with finance are.
I don’t have any certifications. I’ve been practicing corporate accounting for over 7 years (seeing as how I’m 25, that’s just about a third of my life), and I can tell you something that not many others can: the certifications, for the most part, are superficial qualifications. I own the books for the CIMA and CMA both. I have decided that I’m going to do them both, because in the world east of the United States, it is not what you know, it is who you know and what you can flash, i.e., it is not a matter of how good you are, it is a matter of showing professional qualifications.
That said, you have been working in controlling and finance, and you want to work toward moving up as a Finance Director, and for that, you need to have some sort of an accounting background, which means you would possibly need CIMA, given the fact that you’re chosen location is Asia or the Middle East.
You see, no matter what, every accountant needs to understand the concept of bookkeeping. Ultimately, in many ways, double entry bookkeeping exists to provide accountants job security, to cloud and confuse the books so much that it takes an accountant to decode them and “present” them to the rest of the business management team. Therefore, you don’t have to be a bookkeeper to do something like this, but you need to know how to do it.
The thing is, the typical finance director does not do bookkeeping for a living, but it is his job to make sure that the right bill goes under the right classification, because if it doesn’t it could throw off your entire basis of discussion with a Managing Director or Executive Director. So, you’ll need to make sure that as a Finance Director, your underlings are doing the right kind of work.
Now, what is it that Finance Directors see on the job, and how key is CIMA or IMA to it? Well, not much, but these courses are so wide in the ground that they cover, and they are capable of giving you some of the tools that you may need on the job. But nothing prepares you for it.
I’ve worked for about 20 different companies, and I’ve typically worked with upper management or MDs who had a difficult time dealing with accountants or bookkeepers. CIMA will not prepare you to deal with the job practically, neither will CMA. I now have a client who has a problem that neither of the certifications resolve. Party X did a management buyout of Company Y two years ago. Company Y owned Party Z 80,000 pounds sterling at the time of the buyout, but no payments were being made. The loan had been on the books for a couple of years. After Party X completed the buyout and the Company was renamed Company O, the loan was moved onto the books of Company O. After three years, Party Z decides that they never wanted the money back. Now, Company O is expanding, but the loan of 80,000, which has gone on all the tax returns, and has been on the books for years, is hampering Company Os plans for growth, because when investors and lenders look at that loan, it’s a big flag of the company’s existing liability, which really doesn’t exist. You are the Finance Director, and the MD tells you to get rid of this problem.
Now, how do you do it? This is not a simple matter of making a journal entry and writing it off. The government will be involved (come tax time), as are financial institutions (come loan time). How do you deal with it?
This is part of the slightly dirty work senior accountants / FDs have to do. If you read the latest version of Financial Management & other such magazines, the dirty work for FDs has gone up; it has become a diverse field.
One thing is for sure, and you’re right, the CFA is not for where you are headed. If I were you, I would stick to CIMA for Asia or the UAE. But looking at the mentality in that market, you could get a CMA and CFM with 6 exams from the US based IMA, and the CIMA with 15 exams from the UK. Two look more flashy than one; that’s why I am now seriously looking into do doing all of them. But, start with CIMA. East of the US, go for CIMA; it is considered the Financial/Accounting Executive’s qualification.
And as an FD, I have to say, that you cannot escape accounting or bookkeeping. There may be less of it at the FD level, but it will come to you in spurts.