Peeling away financial reporting issues one layer at a time

Before You Vote On the AICPA-CIMA Merger, Follow the Money

If you are an AICPA member, you would have recently received an email like this one:

“…[The AICPA’s] governing Council has authorized an online member ballot on a proposal by the AICPA and The Chartered Institute of Management Accountants (CIMA) to create a new association representing the entire accounting profession, while preserving the membership bodies of both organizations. I encourage you to vote “yes” on this important member ballot, which opens on April 18.

The proposal builds on the foundation that the AICPA and CIMA put in place in recent years—the Global Management Accounting Principles, the CGMA Competency Framework derived from conversations with employers around the world, and the AICPA|CIMA Competency and Learning website.

The AICPA’s Board of Directors, governing Council, Business and Industry Executive Committee, and Government Performance and Accountability Committee have endorsed the proposal; and 51 state societies have passed resolutions of support. It also has broad support from employers and finance leaders in the U.S. and around the world.

Learn more about the benefits of this proposal at

Mark your calendars to vote “yes” starting April 18. Thank you for your support.”

[bold in original, italics supplied]

From Whence This Came

As one might expect, anything the AICPA has published to inform your vote is supportive of the merger proposal.  Before I play the contrarian, let’s review some relevant history.*

In 1999, the AICPA powers that be were concerned that stagnant membership growth would threaten the organization’s revenue stream.  To turn things around, they could either endeavor to make the AICPA more relevant to practicing CPAs, or to add non-CPAs to the membership base (e.g., information technologists and attorneys).  They chose the latter, and the proposal to develop the so-called “Cognitor” credential was soundly rejected by the membership.

In 2012, this time without a membership vote, the AICPA entered into a joint venture with the Chartered Institute of Management Accountants (CIMA).  CIMA agreed to change the name of its credential from “Chartered Management Accountant” to “Chartered Global Management Accountant” (CGMA). For its part, the AICPA sold CGMA certificates, initially to any member who wanted to pay the fee.  Perhaps sensing the sham of gaining a new credential without even having to pass a test of competency, only about 10% of the AICPA members bought in.

Isn’t it Rich!

I find no small amount of irony in the fact that the primary institutional advocate of CPAs has been on a two-decade quest to promote a different credential.  One would think that the AICPA would be helping CPAs protect its turf, but it’s the other way around.  Notably, the merged organization would be called the “Association of International Certified Professional Accountants.”  Notwithstanding the more generic branding, the current AICPA claims that the reconstituted AICPA  “would continue to focus efforts on keeping the CPA strong in the U.S.

But recent history suggests otherwise.  My understanding is that when the AICPA first proposed to offer a CGMA credential, the ongoing requirement would be for all CGMAs to also be licensed CPAs.  That was later broadened to eliminate the licensing requirement, and then finally that it would be extended to anyone who could merely qualify to sit for the CPA exam.  Hence, there is a real possibility that the public will be confused regarding the distinction between a real CPA and non-CPA CGMA — and a wide gulf separating the two in the form of competency.

So much for “…keeping the CPA strong in the U.S.”  In point of fact, the brand has already been diluted by the joint venture with CIMA.  For the life of me, I can’t see what value a CPA will get out of the merger. Heretofore, nothing prevented a CPA from also being a member of the CIMA; and the old-school CPA/CMAs have been sold down the river.

Questioning the Honesty of the CGMA

Just write a check and get a credential?  I really can’t think of a more shameful act perpetrated by the AICPA!

I suppose we can be thankful that 90 percent of CPAs voted with their feet against complicity in such hypocrisy. And it must be said that the greatest hypocrisy is perpetrated by those among the 10% who merely wrote a check to use their CGMA as a marketing tool — competing against their brethren CPAs no less!

Sure, there are CPE requirements to retain one’s CGMA credential. But CPE does not competency make — not even close.  Everyone knows that CPE is a sham cash cow for the AICPA and the state societies (more on that later).  Whether you are a CPA or a CGMA or both, you really don’t have to learn a darn thing to keep your credential current.  To comply with the rules, just sit yourself down pretty much anywhere you want (most of the time, not even leaving your desk or interacting with a real person), and do your best imitation of cream cheese on a bagel for about 40 hours a year.

A Digression — I have the same concerns regarding the CPA exam.  Credentialing requires passing an exam (albeit lengthy and challenging to most candidates) that merely tests one’s ability to competently perform typical tasks assigned by supervisors to CPAs with less than two years of experience on the job.  Therefore, the overall quality of the veterans in our profession to perform more challenging functions rests on what one might have learned on the job, or remembered from school days, or from cream-cheese-on-a-bagel style CPE.  

Follow the Money

As I alluded to earlier, a CGMA holder must write checks for thousands of dollars — often made out to the AICPA, or a state society — for dues and CPE credits. And kindly remember that, unlike CGMAs, CPAs don’t have to be members of the AICPA (or a state society) to hold a license.  A CPA need not pay a penny to these organizations to keep their license current.  And many don’t — that’s the problem!

The email we have been sent proudly trumpets — writ large using bold type no less — that 51 state societies are supporting the CGMA movement.  Of course, they are getting a cut of the action!  A friend shared with me that he once heard a society leader complaining that they had not received their quarterly royalty check from the AICPA for CGMA dues brought in.  Surely, these are not insignificant amounts.

The email also states that the “AICPA’s Board of Directors, governing Council, Business and Industry Executive Committee, and Government Performance and Accountability Committee have endorsed the proposal.”  Well, you had better support the proposal or you are not going to keep moving up the AICPA leadership ladder, I can assure you of that!

Also, during the FRF-SME debacle in 2013 (which I wrote about here and here), a source told me that the AICPA executive staff receives a significant part of their compensation as bonuses based on sales of related CPE, and even the credential itself.

1999 may be a long time ago for many current AICPA members.  But to those who do remember, the parallels of the current CGMA proposal to the Cognitor debacle are self-evident.  The AICPA leadership dodged that humiliation with little more than egg on their faces, so what does the current cast of characters have to lose by a moonshot of their own?

What is truly lost by the AICPA leadership’s attempted exploitation of the CGMA for personal gain is much-needed investment in the prestige and quality of the CPA credential.


The good news is that the proposal needs a two-thirds majority of the voting members to pass.   That makes a “no” vote really powerful, for it takes two “yes” votes to offset one “no”.

But, if that alone doesn’t move you to vote, kindly consider why the AICPA might have scheduled the voting for smack in the middle of your busy season.  Cynical me suspects that they are trying to discourage “no” voters’ participation.  Their thinking could be that “yes” voters will be highly motivated to participate, but that many “no” voters are more indifferent; and therefore less likely to tear their attention away from the immediate and pressing needs of clients/supervisors.

Use your “no” vote!  Protect the value of your CPA credential!  Perhaps this one last time, the leaders of the AICPA will get the message that they should concentrate more on providing value for membership dollars than on lining their own pockets with them.


*My historical account, as well as a few other portions of this post, paraphrase a December 2015 commentary from Accounting Today, by Paul Miller and Paul Bahnson.

* * * * * *

New additions to the Accounting Onion Bookstore:

41HEU4nNr4L._SX330_BO1,204,203,200_David Mosso has pretty much done and seen it all when it comes to accounting standards setting, most significantly having spent nearly twenty years at the FASB, and having been a board member for ten of them. His book has three principle themes:

  1. The politicization of standard setting has been far more harmful than beneficial.
  2. GAAP must be fundamentally changed. Mosso’s proposed system of accounting rules consists of little more than a few principles, which together comprise his “Wealth Measurement Model” (WMM). The gist of that model is to recognize “all” of the assets and liabilities of an entity and to measure them at fair value, which apparently out of convenience is specified to be in accordance with existing FAS 157. Mosso claims that the comprehensive nature of WMM makes it capable of generating timely signals of looming problems to both investors and policy makers.
  3. Upon implementation of the Wealth Measurement Model, subsequent accounting standard setting could be limited to a sort of rapid-response version of the Emerging Issues Task Force for addressing implementation issues arising out of innovations in business practices and new technologies.

41vaQ0-5CML._SX331_BO1,204,203,200_Walter Schuetze had a storied career at KPMG.  He was a charter FASB member, and became the SEC Chief Accountant where he famously advocated for simpler accounting standards based on mark-to-market accounting.  This book is a wonderful collection of his clearly-written and persuasive writings on these topics.


  1. Reply Carolyn April 16, 2016

    Excellent advice for those who really want to understand what the merger is about and which way to vote

  2. Reply Tom Hood April 18, 2016

    Tom, I understand and appreciate your point of view but would like to respectfully disagree with a couple of key points. First, I am one of the leaders of the 51 state CPA societies who supported this effort. We came to this conclusion only after an intense exposure, feedback and polling from over 1,000 ‘grassroots’ members in our 4 hour FREE Professional Issues Updates (I take a little offense to CPE as our cash cow). Seventy-six percent (76%) of our members voted overwhelmingly in support, 20% needed more information (this was in the fall) and only 4% opposed. I think the major point about this is that the CGMA is not a competing credential but a complementary credential primarily for our business and industry members and consultants in CPA firms. It will not ‘compete’ with CPAs in public practice. It is also an attempt to position the Profession globally by virtue of the JV with CIMA. I also think your assertion about how much money this represents to states is exaggerated, the money for ‘partnering’ is more of a cost recovery rather than a significant (or not insignificant) amount. I always enjoy your blog and would ask those who read it to consider all sides of this issue before voting. Thanks!

  3. Reply Andrew B. Blackman, CPA (NY, NJ, & CA) April 19, 2016

    I was one of those vocal CPAs who openly opposed the AICPA attempts at broadening the membership through the various efforts AICPA leadership has tried to influence existing members to support since the late 90s. The eloquent and passionate plea here to defeat this latest cash grab sounds like many earlier ones dating back to Mr. Melacon’s initial attempts to feather his nest and I fully support the sentiments expressed to vigorously oppose this latest Trojan Horse. The comments from Mr. Hood above are what I’d expect from a good soldier of the network that will reap some of the financial benefits of this latest attempt to sell the profession down the river. I’m glad I’m closer to the end of my accounting career than the beginning, because it is clear the long-term goals from those who are unfortunately in charge is to win a war of attrition that is now nearing a 20-year mark and their hope that the newer breed of CPA will be more malleable (as well as have no memory of the past efforts that amount to the same nonsense as this one) in convincing members that AICPA leadership knows best. XYZ>cognitor>CGMA is all the same load. Don’t fall for it. Don’t be persuaded. Vote No! I’d add vote often, but then I’d be using the same tilting the game board strategy of those in charge. Just please give them the good old fashioned thumbs down.

  4. Reply Andrew B. Blackman April 20, 2016

    I committed a misspelling of Mr. Melancon’s name in my prior post to this forum. I would regret if those who do not know the proper spelling and wanted to use my misspelled name in a search engine would miss out on this remarkable man’s career.

    While I know many fine accountants, I am embarrassed that too many cannot see that this emperor has no clothes. More likely they don’t care, at least not most of the time. Through wielding his influence to appoint members to the AICPA BOD and ultimately who becomes chair, Melancon holds too much sway over a profession he is driving into the dirt.

    So, with that, I am pleased to announce I just voted NO. Please do not be fooled by the charlatans at the controls (visualize back to the Wizard of Oz film where the wizard is vainly trying to preserve his chicanery by pulling on various levers to make himself appear god-like and all powerful).

    The power is your vote. Use it to vote NO!

  5. Reply GASCPA48 April 24, 2016

    @Tom Hood

    Since you volunteered the results of your “grass roots” survey… a few questions:

    1. Were the positive respondents to your survey all CPA?
    2. In future scenarios, if this proposal passes, do you see the non-CPAs having equal voting rights as CPAs in the AICPA and (your society)?
    3. If the proposal passes, wouldn’t it be possible for future non-US/ non-CPA members to vote in favor of future AICPA initiatives seeking to expand audit privileges in the US to include CPA’s credentialed(and regulated) by jurisdictions outside the US? (Giving the AICPA cover to openly lobby for such an initiative)
    4. Doesn’t this proposal take us one step closer to the possible offshoring of the profession?
    5. Could you provide access to the questions posed, how the recipients were selected, results, etc. for your “grass roots” survey?

  6. Reply ConcernedCPA May 9, 2016

    I wonder if the state society leaders were told that the use of the title CGMA by non CPAs is illegal in the majority of states and violates the Uniform Accountancy Act?

  7. Reply James May 16, 2016

    I do not trust the AICPA or my state society since the State gave almost 1000 CPA certificates to non certified public accountants without passing a test. One board member at the time told me it was ok to do that because most of the people were old and would die soon. At the time I was the same age as the average age of those individuals.

  8. Reply Ben May 18, 2016

    I agree. I am a CPA & CMA and the CGMA is disgraceful.

  9. Reply The Last LPA May 31, 2016

    James, for the record, neither the AICPA not your state CPA society gave non-certified PAs CPA certificates, it was done by the decision of the state accountancy board, and furthermore such a practice has been done by a number of state accountancy boards, including Illinois, Georgia, Tennessee, Minnesota, Ohio, Washington, Massachusetts, and Connecticut.

    There is no disgrace in such a practice, and no evidence that the public was harmed as a result of it. As a matter of fact, if we were to be perfectly honest, most dissenters such as yourself are against it purely for egotistical reasons. The findings of a study conducted by Richard Sathe, a professor at the University of St. Thomas in St. Paul, MN involving this very topic makes this fact very clear. Great research, very insightful findings.

    In short, get over yourself, and get out of your feelings. It’s not a big deal, it really isn’t

  10. Reply Ahmed Faraz Haider, CPA December 4, 2016

    Why would the CGMA which is a secobd rate qualification from the UK, unable to sign off on audits in that country, be accepted as equal of the US CPA who can provide audit sevices.

    For clarification, the preferred qualication for audits in the UK is the CA. Why would the US accountants accept to be equal to be below UK CAs? This is absolutely a dilution of the CPA brand and a sneaky backdoor way of offshoring US accounting skills.

  11. Reply Edwin Yau December 29, 2016

    Chartered management accountants(ACMA/FCMA) by Royal Charter are management accounting mandated. Chartered accountants (CA) by Royal Charter are public accounting mandated. Both came into being by virtue of Royal Charter in UK. They are thereby equal in terms of Charter status. Some accounting professionals tend to prefer a business career whilst others prefer a public practice career.

    Edwin Yau, CA CPA ACMA CGMA

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