Last year, half of the more than 35,000 graduates with B.S. degrees in accounting went to work in industry* (where most of their peers will eventually end up) and got head starts on their career paths. It might seem surprising, but of the 5 million accounting and finance function professionals in the U.S., more than 90%** are employed in industry, which means inside organizations, performing accounting activities and providing decision support, planning, and control functions as management accountants. They are employed by enterprises such as Fortune 500 companies, publicly traded companies of all sizes, privately held concerns, nonprofits, and government entities, with titles ranging from staff accountant to CFO.
Although their titles may vary, the goal of management accountants remains similar: to provide their organizations with the financial information necessary to succeed in today's business environment. That means being involved in areas such as designing and evaluating business processes; budgeting and forecasting; implementing and monitoring internal controls; and analyzing, synthesizing, and aggregating information-all to help improve their organizations' business performance and profitability, while performing the accounting and making sure records are maintained in accordance with standards and laws. Actually, it is only the finance function staff who work inside their organization who can make sure it is in compliance with standards and laws.
Today, the successful accomplishment of these tasks is more important than ever. In the wake of recent corporate scandals, both the public and the profession have demanded more ethical financial reporting practices and greater accountability. SOX and other reforms introduced groundbreaking legislation that strongly increases the responsibilities and obligations of accountants working within businesses to meet the necessary ethical and regulatory requirements, presenting an excellent opportunity for anyone considering a career in management accounting.
And for those contemplating such a career, earning a certified management accountant (CMA®) designation, awarded by the Institute of Certified Management Accountants (ICMA®), the certification division of the Institute of Management Accountants (IMA®), can provide an important point of differentiation.
The CMA designation usually is not the first thing that comes to people's minds when considering a career in accounting. More likely than not, most laypeople and accountants alike think of the CPA as the credential of choice. In point of fact, however, the CPA exam consists of very specific training to enable a candidate to perform audits and to attest to the accuracy of an organization's financial statements, usually as a member of a public accounting firm.
Obviously, it takes more people to do the work than it does to check the work. The CMA exam tests a broad range of management accounting subjects, including finance, planning, decision making, economics, capital budgeting, performance measurement, cost measurement, organizational behavior, strategy, and marketing, with a strong emphasis on ethics. It prepares the candidate to participate in responsibilities that create value-for an owner, a business partner, even society at large. The CMA is about being involved in actual decision making that impacts a business, and it's the certification that provides training for doing work in industry, which is where close to 90% of accountants eventually wind up.
Looked at this way, it's apparent that the CMA skill set goes beyond the scope of the CPA. That's not to say that the two credentials are mutually exclusive. Many accounting professionals sit for the CPA exam early in their careers and then realize later that the CMA credential better fits the work they perform on a daily basis. The two designations, rather than competing with one another, can be complementary. In fact, roughly one-third of CMAs are also CPAs.
An accounting professional with certification clearly enjoys career benefits. IMA's Annual Salary Survey shows that accountants with certification earn an average of 27% more than their non-certified counterparts (Strategic Finance Magazine, June 2007).
In some industries and companies, the CMA has become an equally recognized, and even preferred, designation compared with the CPA. Pharmaceutical giant Johnson & Johnson, for example, strongly recommends that its accounting and finance staff have the CMA designation because of the broader training the credential provides. Other companies, such as Caterpillar, Inc., have adopted systematic programs to enable their accounting and finance staff to obtain the CMA designation because they recognize the superior benefits of having a consistently trained cadre of professionals who are equipped to add strategic value to their organization.
Thanks to these efforts and others, the CMA certification is gaining recognition on both the international and domestic fronts. IMA has witnessed encouraging overseas growth, largely because international professionals desire an American certification that's globally applicable. Currently, IMA has a strong presence in the Middle East and an emerging presence in China. This past July, in fact, the CMA exam was for the first time translated into another language-simplified Chinese-which will enable thousands of Chinese-speaking accounting professionals to take the exam in their own language.
Within the U.S., IMA has intensified its corporate development program and is launching an aggressive new marketing program to help increase awareness of the CMA designation within corporate America and among members of the public.
The CMA certification is beneficial across many different industries, including service, healthcare, information technology, government, manufacturing, and nonprofit, among others. Moreover, CMAs gain a certification that indicates a preparedness to be a valuable and integral part of an enterprise. CMAs understand how accounting affects all aspects of an organization-from economics to management to information technology-and they know how accounting supports the organization to help gain and sustain a competitive advantage.
So consider a career as a management accountant, and consider becoming a CMA-it's a decision for a lifetime.
About the Author
Paul Sharman, ACMA, is president and CEO of the Institute of Management Accountants (IMA®). Since he took over management of the association in January 2004, his goal has been to reposition management accountants at the forefront of the accountancy profession.
* National Association of Colleges and Employers (NACE)
** Derived from U.S. Bureau of Labor Statistics data, 2006
