British science writer Roger Lewin once said, “Too often we give children answers to remember, rather than problems to solve.” And if we’re honest, this is often the case in professional education, too.
It’s useful to remind ourselves of the most important outcome we seek from our system of lifelong learning. To me, it’s simple: Develop the skills and knowledge that employers and clients rely upon for success. And what are business leaders telling us they want? When it comes to management accounting, they’ve been clear: technical expertise in accounting and finance; business acumen; people skills; leadership skills; and real-world, practical experience.
How do I know this? It’s based on extensive research that the American Institute of CPAs and the Chartered Institute of Management Accountants have done in support of the Chartered Global Management Accounting designation, held by more than 150,000 professionals worldwide. And it’s built into the CGMA competency framework and the CIMA professional qualification syllabus for management accounting that ties into the framework.
There’s little doubt that competency-based approaches are where education is moving. The CIMA syllabus is grounded in leading global practice, and is designed to develop specific skills that employers need today but are having difficulty finding. Some 36 percent of employers internationally reported talent shortages in 2014, and accounting and finance personnel represent one of the top categories for shortages.
In light of these trends, leading companies such as Shell, Cisco, IBM and GlaxoSmithKline are increasingly seeking out CGMA designation-holders. Paul Stephens, senior vice president of finance for AT&T’s business solutions and international operations, said that the company currently has several CPAs going through CGMA certification.
“We see this as an opportunity to continue the training that they had in school, and to build on their CPA certification,” he said. “It’s a way to build those intangible skills that are important to be a business leader within AT&T — and that includes such things as risk management, leadership, analytical thinking, all the stuff you need to do on top of just being a good technical accountant.”
When businesses talk about challenges, two issues usually top the list: complexity and the pressures of rapid change. The former requires deep knowledge from senior staff. The latter requires flexibility, adaptability and the ability to bring critical thinking to bear to find solutions. To me, bringing these disparate skills together is the essence of management accounting.
Objective tests measure knowledge well, but the application of more intangible qualities such as critical thinking or communications skills are trickier to quantify. This is where the CGMA exam comes in.
Anyone who has a teenage daughter or son knows that acing the written exam for a driver’s license doesn’t guarantee instant success once the child gets on the road. They need to prove they can pass an actual hands-on driving test.
That’s what we try to measure — in a much more sophisticated way, of course — with the CGMA exam, at least when it comes to real-world decision-making. Test takers are given advance information about an organization for the simulation so they can familiarize themselves with its resources, challenges and business context. And for the exam, they’re presented with a specific scenario that requires a strategic and tactical response, which is scored by reviewers. This isn’t a test of theoretical knowledge — it’s designed to replicate conditions that business leaders grapple with every day — and we’ve found that both employers and test takers are impressed by this unique kind of assessment.
“The format is very similar to a real-life business scenario, and I think that is good and important,” said Brian Schwab, a CPA in a top-tier accounting firm who recently took the exam. “In the real world, we need to sometimes turn around, to the best of our opportunity, all of the knowledge and advice we can pull together on a particular topic, and the exam forces you to do just that.”
We know businesses have a growing need for this blend of deep knowledge and critical thinking in their finance functions. And with the CGMA designation and the professional development resources that support it, we’re providing talent that’s precisely designed to meet this demand.
Ash Noah, CPA, FCMA, CGMA, is vice president of CGMA external relations at the American Institute of CPAs.
