Please ensure Javascript is enabled for purposes of website accessibility

New Management Accounting Designation Coming Your Way?

The AICPA and the London-based Chartered Institute of Management Accountants (CIMA) are proposing forming a joint venture to develop and promote a new global management accounting designation. The joint venture is designed to give management accounting a higher profile in the United States, advance the science of management accounting worldwide, and promote the U.S. CPA designation as a worldwide standard of professional excellence in accounting, according to a press release from the organizations. [JofA]

Another Future Big 4 Associate Wants Advice on How to Best Ruin Their Life Prior to Starting Work

Welcome to the cancel-your-holiday-in-Libya edition of Accounting Career Emergencies. In today’s edition, another Fall 2011 Big 4 associate would like to nail down a certification in addition to the CPA before starting work. Can I keep my head from exploding long enough to formulate a coherent response?

Caught in a ethical jam at work? Need a shredding service-provider that also has a knack of taking care of “problems”? Want to challenge your firm’s dress code but need an objective opinion? Email us at [email protected] and we’ll make like Anna Wintour.

Back to our overachiever du jour:

Caleb,

I am about to pass the CPA exam and have 8 months until I begin at one of the “Big Four” firms in Florida. I am excited to start at the firm as it was my first choice however, I am not certain I will be in public accounting for the long run (like most people). My question is, being uncertain about my career path, what other certification should I obtain before I start in 8 months?

I have considered the CISA, CFE, CMA, CFA, Six Sigma but, I am not sure as I am not certain of my long term path. I want something that will give me an edge if I leave the firm and/or switch careers.

What certification would you recommend?

Any suggestions are helpful.

Dear Overachiever Du Jour,

After murdering the remainder of Stranahan’s in the house, I’m better prepared to answer your query.

I appreciate your ambition and we definitely think that obtaining additional certifications is a good idea for those that move on from public accounting but I fail to see how this benefits you now before you have an inkling of what kind of career you want. HOWEVER, I’m here to help sort you out as best I can, so I’ve put aside my judgments for two.

Based on your “considerations” listed, you seem to have a case of accounting certification ADHD which is fine but there’s no clear pattern as to what your interests are. I’m not going to recommend you do something just because it may be a hot area (forensics) or in-demand (information systems) but I am going to recommend you rank these certifications based on your level interest. Want to eventually be a CFO? Then go for the CMA. Want to pile up the financial reporting bodies? Get the CFE. You get the point. The important thing is to pursue a certification you find interesting rather than one that will just puts a few letters behind your name that may (but probably not) impress someone.

But really, do you want to spend the summer prior to starting work studying for a test? Get the band back together, take a trip, something.

Should an Overachieving Auditor Ruin His Summer By Studying for the Certified Internal Auditor Exam?

Welcome to the I’ve-never-been-so-disappointed-with-commercials-in-my-life edition of Accounting Career Emergencies. In today’s edition, a future Big 4 auditor is thisclose to finishing up the CPA and is worried that his summer won’t be sufficiently ruined without an exam to study for. Is hitting the books for a Certified Internal Auditor badge the answer?

Need career advice? Need a myth about your firm debunked? Is your job driving you mad to the point of considering a terrorist act? Email us at [email protected] and we’ll keep your face off a most-wanted list.

Back to our glutton for punishment:

Dear Caleb,

I keep going back and forth on whether or not to go for another certification. This month I’m studying for, and taking, the last section of the CPA exam. I’m starting an auditing gig at a Big 4 firm this Fall. With no CPA exam to ruin my life this summer, I’ve considered ruining it by studying for a new exam, specifically the CIA.

I’ll have the required work experience for the certification as of June 2011, so my first set of biz cards would be able to read “Indentured Servant, CIA” right out of the gate, with it being updated to “Indentured Servant, CPA, CIA” in 2012, just in time for the world to end.

The CIA exam is cheaper than the CPA and probably easier at this point. Plus, everyone would think I worked for the CIA. Should I take the exams, or get a life that will be ripped away from me in a few months?

Best,
Indentured Servant

Dear Indentured Servant,

I think a more appropriate pseudonym for you might be “Auditing Overachiever” or “Don’t Know What to Do with Myself” OR “Prefers Books About Auditing as Opposed to Interacting with Humans, Even Those Who Might Want to Have Sex with Me.” NEVERTHELESS, I’m here to help.

Your letter is a little confusing but I’ll try to piece things together. Your job starts in the fall but you’ll have enough work experience (24 months) to obtain a CIA in June so that can only mean that you’ve been an auditor for awhile. It also means this new Big 4 gig is fresh start for you in some way, shape or form since you’ll effectively be a new hire. Making those assumptions, I’m not really sure what the CIA will do for you as a Big 4 auditor. Yes, having a extra credential is nice but it likely won’t mean squat to your co-workers, partners or clients and it won’t make you any extra money. Plus, as far as I can tell, the superficial motivation behind this endeavor – paraphrasing your words – is A) “I want to ruin my summer” B) “it’s cheaper than the CPA” C) “people will think I’m a spy.”

My response to these is A) What’s wrong with you? B) How is spending more money “cheaper”? C) No, they won’t.

See why I’m confused? The underlying motivation – if i can put you on the couch for a sec – is that you’re worried about being bored. Are you completely incapable of enjoying a summer if it doesn’t involve being indoors with your nose in a book? Take a vacation, take a staycation or do nothing but study for an exam that will get you an obscure certification? In my opinion, there’s extremely limited upside to the CIA at this point in your career so do yourself a favor, finish your CPA and give the certifications a rest for awhile. They’ll always be there for when the disappointment of the world NOT ending in 2012 gets you down.

In other words – get a life, dude.

The Path to CFO: Is the CMA Credential Just as Important as the CPA?

Many of you soldiering in public accounting have aspirations of one day achieving the pinnacle of many a numbers junkie’s career – Chief Financial Officer. You may think that becoming a CFO will mean hobnobbing with other C-suiters, first-class flights and access to exclusive swing joints but in all likelihood, it will consist of long hours, political maneuvering and maybe burning a few bridges.

While there are many paths to ascending to such a heralded position, one has to wonder if the skill set obtained in public accounting will really prepare you for all the demands and headaches that will inevitably come with a CFO position.

Because so many accounting grads get their start in public accounting, one ofobtaining the CPA credential. There’s no question that obtaining your CPA is a must for anyone that intends on spending a significant portion of their career in public accounting and little debate about the advantage of having those three letters on your résumé when you start looking outside public.

Tthe timing of that move may determine what kind of path you have ahead of you in order to land that coveted CFO gig. If you manage to stick out life in public until partner or in some cases the director or senior manager level the path is more clear. You may jump right into it immediately or you assume a position that reports to the current CFO and be groomed to assume the big chair at the appropriate time.

But what if you’re just starting your career and you’re fed up with public already? Or what if you’ve gotten laid off and you took a job in private. Are your dreams crushed at this point? What’s a wannabe CFO to do?

Speaking with John Kogan, CEO of Proformative, an online resource for finance, accounting and treasury professionals, obtaining the Certified Management Accountant credential is something that often gets overlooked.


“It’s the Rodney Dangerfield of finance certifications,” John told GC, “it doesn’t get enough respect.” The argument for today’s CFOs to have a CPA are being made and statistics have shown that more and more CFOs are, in fact, CPAs. The most recent data we can find shows that in 2009, 45% of Fortune 1000 CFOs were CPAs, up from 29% in 2003.

However, the viewpoint of “Warren Miller” in the comments of Francine McKenna’s guest post at FEI Blog on the subject, is that accountants usually make terrible CFOs:

[A]ccountants tend to make lousy CFOs because (a) they see everything as an accounting problem, (b) their ignorance of finance AND of human nature (where incentives are concerned) can be breathtaking, (c) they look backwards, and (d) they are conflict-avoiders. If accountants wanted to deal with the ambiguity of the future, they’d have never become bean-counters.

In addition, most accountants LOVE “rules.” They avoid conflict by hiding behind rules. They are go-along/get-along people. I’m fond of saying this: “If accountants had been running our country in 1776, we’d still be working for the King.”

So if the gamut of accountants are ignorant about finance matters, does the CMA provide a bridge to closing that knowledge gap? John Kogan thinks so, “The CMA designation wants to be the ‘CPA’ for finance professionals,” he said, “but it’s so far from being that.”

When you look at the two sections of the CMA exam on the Institute of Management Accountant’s website, you certainly get the impression that the CMA could be the “CPA for finance professionals” based on the curriculum:

PART I – Financial Planning, Performance and Control
• Planning, budgeting, and forecasting
• Performance management
• Cost management
• Internal controls
• Professional ethics

PART II – Financial Decision Making
• Financial statement analysis
• Corporate finance
• Decision analysis and risk management
• Investment decisions
• Professional ethics

So why isn’t the CMA a more coveted credential? John Kogan claims it’s due to poor marketing on the IMA’s part, “The CMA [credential] has similar requirements, not identical but similar, and they don’t enjoy the reputation of the CPA,” John said. “The CMA is getting its butt kicked because it doesn’t market itself well.”

You can easily make the argument that the AICPA has the distinct advantage of partnering with the Big 4 – firms that’s primary purpose is to serve as CPAs – on marketing and promotional efforts while the IMA has no apparent equivalent.

That being said, our recent conversation with IMA Chair Sandra Richtermeyer shed some light on the careers that are available for accountants moving into a financial role that the CMA designation complements well. She was of the notion that the CMA is simply not about cost accounting and John Kogan agrees, “I think anyone who knows anything about [the CMA] knows that the [designation] is broader than that, it’s just that very few people know what the heck it’s about,” he said. “Without a doubt, the skills that the IMA are teaching and certifying are corporate finance skills.”

If you consider yourself to be on the path to CFO Rockstar, maybe you have the CPA locked up but what’s next? Having the CPA credential may make you an attractive candidate on paper but it’s won’t guarantee success with the wide range of knowledge that CFOs need. So, while it may not hold a candle to the CPA in terms of prestige, the skills and knowledge that fall under the CMA are essential for any successful CFO.

How the ACFE is Promoting CFE Awareness

After Caleb forced me to write a few posts on Credentials for Accountants meant specifically for those of you who still do not know what you want to be when you grow up, I managed to bumble one so badly I was contacted by Scott Grossfeld, CFE CPA and Cttp://www.acfe.com/”>Association of Certified Fraud Examiners. See, it appears I made a typical media mistake in using fraud and forensics as interchangeable fields within the industry and Scott felt compelled to speak up.

This wasn’t exactly wrong (I was being lazy actually) but as CEO of the ACFE, he’s got a responsibility to make sure the media represent the field of fraud examination correctly, especially when it comes to giving forensic accountants credit for what he and his fellow CFEs do out there. Thankfully, we had a nice little chat and cleared up that little point.


Additionally, Scott promised us access to recent salary survey information available shortly that will give us a better idea of what CFEs make. For now, he told us that the data confirms a 22% pay premium for individuals with the CFE compared to individuals in the same position without the CFE. We liked this approach and wish more organizations would take an active role in monitoring and engaging in the conversation, as Scott was obviously doing by reading our series on credentials.

Along the way, however, I discovered that the ACFE is also on top of things by promoting the credential, interacting with their audience and reaching potential new members through new avenues like blogging and social media. The ACFE is excited to be launching a new social media campaign shortly that we can only hope rivals that of the AICPA’s total social media genius (except for that whole Feed the Pig thing, which still creeps us out but is brilliant and weird enough to get a pass).

The strategy of having a CFE on staff is akin to carrying insurance on your home or car, and diversifying a company’s staff can mean the difference between a lawsuit and a slap on the wrist thanks to our favorite unnecessary accounting legislation of all time, Sarbanes-Oxley. “If you look at the CFE, originally the idea behind it was that we had accountants who really didn’t know how to investigate and investigators who don’t know accounting so we were able to bring those two together,” he said. “If you look now, Enron was the big thing that really changed perspective… here’s a big financial risk but you could lose your company if you’re not careful (with SOX) and I think that really raised awareness. Before that fraud work was sort of like insurance, you knew you needed it but you couldn’t always justify it.”

But CFEs do justify their price from a prevention standpoint, assuming fraud to be a risk all companies are exposed to. “5 – 7% of the company’s revenue is lost to fraud, that’s where the fraud examiner pays for themselves,” he told us.

But how does the ACFE promote the usefulness of a 20 year old credential like the CFE? By getting to the kids when they’re still undecided, of course.

“It used to be that the CFE was a secondary credential. [Promoting the credential is the goal of] the higher education partnership we provide to educators. We have 300 colleges and universities in that program. Now it’s part of the discussion; risk is on the radar in terms of what companies are looking for. What we typically see is fraud being an elective type class though there are a few schools that specialize in fraud and or forensics.”

The ACFE also promotes its mission by encouraging those interested in pursuing a career in fraud-fighting to join the organization as a student member for something like $20 a year. Student Associate membership is open to undergraduate students enrolled in 9 semester hours (or equivalent), or graduate students enrolled in 6 semester hours (or equivalent) in an accredited college or university. We agree with this approach, as surrounding yourself with like-minded folks gives you a chance to expose yourself to those already on your desired path. There’s plenty of opportunity for mentorship, commiserating and gaining insight into what the credential actually means for your career.

All in all we approve of what the ACFE is doing and look forward to seeing whatever else they have up their sleeve unfold in the months and years ahead. Let’s face it, they’re pretty much guaranteed a job forever. We like.

Credentials for Accountants: Certified in Financial Forensics

If you’re the type that enjoyed spy shows as a kid and loves scoping out financial statements like CSIs love autopsying dead bodies, you might want to consider a CFF (Certified in Financial Forensics) when you grow up. Anyone considering this designation may want to add CFF to the end of their name with a CFE or CFA. If you’re looking at a CFF, you might want to hurry up and decide before future CFFs are required by the AICPA, starting September 1st, to pass the CFF examination.

In May of 2008, the AICPA introduced the CFF as a professional credential that combines specialized forensic accounting expertise with the core knowledge and skills that make CPAs among the most trusted business advisers.


Education Requirements
Becauential that represents an extensive knowledge base, CPE is an important component to qualify for and renew a CFF designation. New CFFs are required to demonstrate a certain amount of Lifelong Learning (based on the point system below) and must complete 60 hours every 3 years with renewal of the credential.

Professional Requirements
In order to qualify to become a CFF, CPAs must be an AICPA member in good standing, have five years professional experience in the field of accounting and must score at least 100 points on the application (points based on professional experience, knowledge, lifelong learning and forensic accounting credentials already held). Only CPAs can apply as a valid, unrevoked license to practice public accounting is a requirement as well.

The CFF Exam
The exam, which will be introduced as a requirement on September 1, 2010, is a four hour, 100% multiple choice exam administered by the AICPA. It consists of the following areas and weights (check out the CSOs from the AICPA here)

Professional Responsibilities and Practice Management

• AICPA 5%

• CPA Professional Responsibilities in Civil and Criminal Matters 5%

Fundamental Forensic Knowledge

• Laws, Courts and Dispute Resolution 5%

• Planning and Preparation 5%-10%

• Information Gathering and Preserving 10%

• Discovery 5%-10%

• Reporting, Experts and Testimony 5%-10%

Specialized Forensic Knowledge

• Bankruptcy, Insolvency and Reorganization 5%-10%

• Computer Forensic Analysis 5%-10%

• Economic Damages Calculations 5%-10%

• Family Law 5%-10%

• Financial Statement Misrepresentations 5%-10%

• Fraud Prevention, Detection and Response 5%-10%

• Valuation 5%-10%

Career Options
Many with the CFF credential stick to private practice and use the CFF as a way to distinguish themselves as passionate about forensic accounting.

Compensation and Other Benefits
We all know more letters = more money but in the case of the CFF, little real data can be found on the difference in compensation for CFFs versus plain old forensic accountants. We’re guessing this is because the CFF is a relatively new AICPA credential but as time goes on and frauds get larger and more complicated, we trust that this data will be much easier to come by. As a general rule, crendentialed CPAs are more valuable simply because pursuit of a credential in one’s specialty shows a level of professional dedication adored by HR departments and managers alike.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here

Credentials for Accountants: Certified Information Systems Auditor

Need help deciding what you want to be when you grow up? Check out the rest of our posts on credentials for accountants.

If you’re really into internal audits and information systems, want to make decent money and never want to worry about having to find a job, you may want to look into the CISA.


Education Requirements
None that we know of, beyond what you’d need to secure a job in the field to gain required professional experience.

Professional Requirements
CISA candidates must have 5 years of relevant experience in IS auditing, control or security work and adhere to the IASCA Code of Professional Ethics. Experience must be obtained in the 10 years before taking the exam.

CISA Exam
The exam is administered twice a year (June and December) and candidates must register no less than two months before the exam date. The exam is made up of 200 multiple choice questions that must be answered within 4 hours. The score is graded from 200 – 800 points and a CISA candidate must score at least 450 points to pass. It covers the following areas:

IS Audit Process (10%)
IT Governance (15%)
Systems and Infrastructure Lifecycle Management (16% of Exam)
IT Service Delivery and Support (14%)
Business Continuity and Disaster Recovery (14%)

The Information Systems Audit and Control Association (ISACA) sets the standards of and administers the CISA examination.

Compensation
PayScale has some interesting figures on compensation for those with the CISA and we have to say, it’s one of the more lucrative credentials we’ve covered thus far. Interestingly, GT pays its CISAs far better than P-Dubs.

Deloitte $59,942 – $86,500
Ernst & Young $60,737 – $90,757
KPMG $70,736 – $111,331
PricewaterhouseCoopers $58,448 – $97,657
Grant Thornton $56,500 – $143,400

IS Auditors make between $60,047 – $82,842 while IS Audit Managers can make up to $108,226. The money is good if you’re willing to put in the hours and pass a little more than half of the exam.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor. You can see more of her posts here.

Credentials for Accountants: Chartered Financial Analyst

Need help deciding what you want to be when you grow up? Check out the rest of our posts on credentials for accountants.

Into investments and looking to secure a credential that is recognized the world over as a standard of professional excellence? Getting the Chartered Financial Analyst (“CFA”) credential might be for you. You won’t be alone as 139,900 candidates in 160 countries have enrolled for June CFA exams this year.

Here’s the rest of the skinny on the CFA:

Education Requirement
To obtain a CFA, all you need is a bachelor’s and four years of relevant work experience, or a combination of education and experience that totals at least four years.

Professional Requirements
CFAs must have 48 months of qualified work experience to qualify to take the exams.


CFA Exam
The exam is administered only in English by the CFA Institute in June and December. The Candidate Body of Knowledge is the playbook from which all CFAs derive their moves; those who have recently passed the CPA exam can think of it as the opposite of the CPA exams, whereupon BEC is the largest section. Topics include the time value of money, corporate governance, equity investments and portfolio management.

The exam consists of three levels and Each has its own emphasis, with all of them weighing ethics heavily.

Level I emphasizes tools and inputs, and includes an introduction to asset valuation, financial reporting and analysis, and portfolio management techniques.

Level II emphasizes asset valuation, and includes applications of the tools and inputs (including economics, financial reporting and analysis, and quantitative methods) in asset valuation.

Level III study program emphasizes portfolio management, and includes strategies for applying the tools, inputs, and asset valuation models in managing equity, fixed income, and derivative investments for individuals and institutions.

All levels must be passed in order to secure the CFA designation. Each exam is 6 hours. There is no passing score, only pass/fail and candidates are given score reports that explain their performance according to other candidates. The exam uses a psychometric grading system similar to the CPA exam.

Studying takes about 10 – 15 hours per week for 18 weeks. Unlike the CPA, CFA candidates can take the exams as many times as they need to pass and there is no time limit to do so.

Career Options
A large number of CFAs end up as portfolio managers however other career options include research analyst, consultant, financial advisor or investment banking analyst. 7% of CFAs are actually chief executives.

Compensation and Other Benefits
Portfolio managers can make $77,443 – $144,360 (national average) so the obvious incentive to obtaining a CFA is the money. CFAs are overwhelmingly male, about 82% according to PayScale. For CPAs, the CFA designation offers quite a bit of flexibility in one’s career to work outside of accounting with a focus on financial products and investments.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts for GC here.

Credentials for Accountants: Certified Valuation Analyst

Need help deciding what you want to be when you grow up? Check out the rest of our posts on credentials for accountants.

The CVA isn’t like other certifications in that if you’re going for one, you’re probably trying to add to your arsenal of professional credentials and have a few days to spare for the intensive training.

What’s it take?
This is directly from the National Association of Certified Valuation Analysts (NACVA):

The Business Valuation Certification and Training Center’s compact five-day intermediate level curriculum is comprehensive and substantive, providing value from beginning to end. A good understanding of accounting, taxes, economics, finance, and a basic understanding of business valuation fundamentals are prerequisites. The BVTC’s primary goal is to provide you with information that will serve as a solid foundation for your professional valuation endeavors, whether or not you plan to pursue a designation.

The five-hour CVA exam is administered in a rotating yearly schedule in 13 U.S. cities (twice yearly in Chicago) following the five-day training.

The NACVA is a NASBA-recognized CPE provider, meaning the training and certification can satisfy CPE requirements for CPAs. State boards have the final say on what counts for CPE purposes so check with yours if you are interested in completing this program to satisfy CPE requirements. The NACVA has trained 15,000 CVAs since its inception in 1990 and its members are subject to the same sort of ethical standards as CPAs.

The entire program – not counting the exams and any study materials – runs about $3,555 (by comparison, the CPA exam costs around $1000 – $1500 just to sit, excluding CPA review fees or retakes) and the exam itself is $595.

Who would want a CVA?
Tax professionals, for one, but also M&A consultants, investment professionals, financial analysts, financial officers and of course accountants interested in valuation and providing this service to their clients.

Why would you want a CVA?
Businesses need to be valued for all sorts of reasons. Mergers and acquisitions make up a large part of this but the CVA also comes in handy for estate taxes, employee stock ownership plans, divorce, and partner break-ups. This makes it an always-in-demand credential in a constantly-evolving marketplace.

Compensation
Salary is impacted according to one’s position or other credentials. For example, a CFO with a CVA can expect to make a median salary of $125,000 according to PayScale. On the other side of the spectrum, a senior tax accountant with a CVA weighs in at an average of $60,000. But we knew tax was a thankless gig to begin with, didn’t we?

Since CVAs can also unravel bankruptcies and liquidations, the career options may be just about endless moving forward. Better start saving your pennies for that 5-day excursion.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts for GC here.

Credentials for Accountants: Certified Internal Auditor

This is the fourth in our series on certifications for accountants. Previously, we’ve covered the CFP, CMA, and CFE so if you’re not sure what you want to be when you grow up, be sure to check those out.

So, what’s the CIA all about?


Education Requirement
CIA candidates must hold a bachelor’s degree. Unlike the CPA exam, which often requires certain coursework or a minimum master’s level education in accounting, the CIA certification has no such requirements. The CIA exam is administered year-round by the Institute of Internal Auditors.

Professional Requirements
Those interested in pursuing a CIA designation must have at least 24 months (2 years) professional experience in internal auditing or its equivalent. Equivalent experience would be in the areas audit/assessment disciplines, including external auditing, quality assurance, compliance, and internal control. Candidates with a master’s degree can substitute their degree for one year of experience. Candidates may sit for the CIA exam before satisfying the experience requirement but will not be certified until meeting this requirement.

Career Options
Certified Internal Auditors can be in public or private industry and experience a diverse workload checking controls, planning the audit process for their company, testing, and compiling reports. Internal auditors may also give feedback on management policies and procedures based on their findings.

Compensation and Other Benefits
CIAs can expect to make a median yearly salary of $55k freshly certified and around $100k with 20 years of experience, making it a cozy career choice for auditors (Payscale). According to the U.S. Bureau of Labor, growth in auditing and accounting positions is expected to rise 18% between 2006 and 2016, which gives CIAs a certain level of job security not seen in other industries. Equally important, executive responsibility attached to Sarbanes-Oxley means CIAs are that much more critical to an organization by isolating incidents of fraud or waste.

Obviously, CIAs are not in it for the money but for fraud-fighters who love information systems, technology and auditing, the CIA is a safe, always-in-need designation worth looking into!