What Does A CGMA Do? (Benefits And How To Become)
Updated 22 September 2022
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Chartered Global Management Accountant (CGMA) is an internationally recognised management accountant designation. The American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA) offer this designation to qualified professionals. If you are keen on becoming a CGMA, knowing more about the job role and its duties can help you pursue this career option. In this article, we examine the answer to the question, "What does a CGMA do?" and list the qualifications required to become one and some benefits of the job
What Does A CGMA Do?
If you are considering a career in accounting, you may benefit from knowing the answer to "What does a CGMA do?". The American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA) are two bodies of professional accountants. The AICPA conducts the Certified Professional Accountant (CPA) examination and prepares study material to guide aspiring candidates. It also monitors and enforces that CPAs comply to statutory and regulatory guidelines. CIMA is a professional body of management accounting and its goal is to support the success of individuals and businesses who employ management accountants.
Chartered Global Management Accountant (CGMA) is a course offered by the two accounting bodies to promote and guide the work of management accountants. The organisations also take initiatives to improve and boost the career prospects of CGMAs internationally. CGMA designation holders are management accounting professionals who operate in the leadership roles of a business. They apply industry knowledge and financial analysis to understand various functional aspects of a business. They may work as a CEO, CFO or as an advisory member of the board of directors. Apart from working on developing business strategies, their primary responsibilities include:
Maintaining financial policies and management information systems
Assessing risk and supporting management in risk control and mitigation
Implementing corporate governance mechanisms, processes and internal control
Developing short-term and long-term strategies to reduce production and operational costs
Supporting management in financial planning and decision-making
Working with department heads before taking crucial financial decisions
Studying and negotiating the financial implications of large projects, loans or investments
Simplifying data and reports for effective communication with non-finance stakeholders
Using financial analysis and data to create plans and processes to improve business performance
Related: What Is An Accountant? Types And Career Advice
What Is The Difference Between Financial Accounting And Management Accounting?
Financial accounting is an accounting procedure that government and regulatory bodies legally mandate to track a company's annual financial performance. The accounting department prepares these reports and shares them with management staff, senior stakeholders, creditors and investors. Companies file their financial accounting reports with state or central government bodies for tax and auditing purposes. A financial accounting process focuses on past performance relating to a predefined period of time. The procedures in financial accounting conform to laws and standards that the National Financial Reporting Authority (NFRA) prescribes.
Management accounting is not subject to any legal standards, and its purpose is to set and reevaluate business goals. The information and the summary are for the benefit of an organisation's management staff and its employees. Professionals may create management accounting reports for each department or for an organisation as a whole. Accounting analyses present data and forecasts future growth prospects. Management accountants may be liable to maintain confidentiality and typically refrain from sharing reports and business information with individuals outside a business.
Related: What Is A Financial Accountant? (With Duties And Salary)
Why Is Management Accounting Important For A Business?
Management accounting provides inputs and insights that help managers and leaders make strategic financial decisions. Cost analysis is one of the key components of management accounting and helps businesses improve their products and services. A management accountant identifies financial patterns in a company's functioning and helps forecast future growth. They provide better internal control by identifying instances of resources being wasted and eliminating redundant expenditure. Cost reduction and increase in profitability are two prominent benefits that management accounting provides a company.
What Are The Benefits of Being A CGMA?
With more businesses realising the importance of management accounting, there is a growing requirement for qualified professionals in this domain. Companies recognise a CGMA as a distinguished financial professional. To become a CGMA, a financial professional requires expert-level knowledge in finance, operations, management and strategy. Hence, while hiring a CGMA, companies typically recognise the professional as an expert in their domain. A CGMA designation increases your probability of finding high-paying jobs in reputed national and international business organisations.
How To Become A CGMA
There are multiple paths that you can follow to become a recognised CGMA. You can choose one based on your educational qualifications and career goals. The eligibility criteria for each path may vary. You can get a CGMA designation through CIMA. It offers regular courses and fast-tracked courses. As a student training under the CIMA, you can clear examinations to become eligible for a CGMA designation. To become a CGMA through CIMA, follow these steps:
1. Pursue CIMA Certificate in Business Accounting
The CIMA Certificate in Business Accounting offers flexible options for students with any educational background to master the fundamentals of accounting, management and business principles. CIMA exempts you from certain exams if you have formal finance or accounting qualifications. Those who do not have a formal finance or accounting degree can appear for all exams prescribed in this course. The course consists of the following four subjects:
Fundamentals of business economics - part 1
Fundamentals of business economics - part 2
Fundamentals of financial accounting
Fundamentals of ethics, corporate governance and business law
You can take the exams in any order you want within 12 months from registration. Each examination has a duration of two hours and you can schedule an online exam by logging into your CIMA profile. If you are unable to pass an exam, you can prepare and try to clear it again.
Related: How To List Certifications On A Resume (With Examples)
2. Pursue the CIMA Professional Qualification
After completing the CIMA Certificate in Business Accounting, you can now apply for the CIMA Professional Qualification. The syllabus comprises three pillars, three achievement levels and three case study exams. You can take a 90-minute computerised objective test for each level at Pearson VUE test centres near you. After passing the objective tests for each level, you can appear for the three case study examinations.
You can register for a case study examination online on the CIMA website. It lasts for three hours and you can take it during four windows spread throughout the year. You can take the case study exam in a Pearson VUE assessment centre near you. Once you pass the CIMA Professional Qualification, the only remaining step in becoming a CGMA is to complete the Practical Experience Requirements.
3. Complete Practical Experience Requirements (PER)
The objective of Practical Experience Requirements (PER) is to test your ability to apply knowledge and skills in a professional role. To qualify for a CGMA designation, you provide evidence of your technical skills, business skills, people skills and leadership skills over a minimum period of 36 months. In this period, you demonstrate evidence of each skill in foundational, intermediate, advanced and expert-level competencies.
CIMA awards you the CGMA designation once you complete the CIMA Professional Qualification by passing nine exams, three case study tests and completing the 36-month PER. You can now become a member of CIMA. To maintain your CGMA designation, you can continue your membership with CIMA. CIMA also helps CGMAs upgrade their knowledge and skills by organising periodic professional development programmes. CGMAs also agree to follow and adhere to a code of ethics set by CIMA.
4. Choose a fast-track entry route if you are eligible
Apart from the regular CIMA Professional Qualification, CIMA offers a few fast-track programmes for senior professionals and executives. They are exempt from a few examinations, PER and may only appear for case study exams. The fast-track entry point programmes for CGMA include:
Global Professional Accountant Programme
Global C-suite Business and Finance Programme
CGMA Senior Executive Programme
CGMA Corporate Professional Pathway
Master's Gateway for MBA holders
How Does A CGMA Add Value To A Business?
A professional with a CGMA designation acquires skills that can help a business during challenging and volatile situations. Their skills help the business manage costs, reduce risks and drive better performance. A CGMA uses logic, data and analysis to help senior management officials make important decisions regarding long-term strategy. A CGMA adheres to a code of ethics and ensures that they help company officials be objective while formulating policies and processes. They transform and convey complex business information in simpler ways to aid decision-making processes.
A CGMA not only helps in decision making, but they also proactively participate and guide the management in implementing decisions. They analyse the impact of these decisions and convert them into measurable parameters to present them to management and employees in an easy-to-understand format. They may create and document standard operating procedures to implement control procedures for future reference and use.
Please note that none of the companies, institutions or organisations mentioned in this article are associated with Indeed.
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