A Combination of Accounting, Finance & Strategic Insight
CGMA (Chartered Global Management Accountant) is the global version of the CMA (Certified Management Accountant). The CGMA designation recognizes the unique competencies and skills of management accountants, who combine accounting and financial knowledge with strategic insight. The designation indicates that the CGMA holder has management accounting expertise in areas such as: leading strategically to make more informed decisions; helping organizations manage change, risk and uncertainty; protecting corporate assets; and promoting operational efficiency and effectiveness. While CGMA designation holders are primarily found in business, industry, and academia, they may also work in CPA firms.
Financial Accounting is a specialized branch of accounting that keeps track of a company's financial transactions. Using standardized guidelines, the transactions are recorded, summarized, and presented in a financial report or financial statement such as an income statement or a balance sheet.
Management Accounting, on the other hand, deals with the use of accounting information by managers within an organization. Management accounting provides managers with necessary information to make informed business decisions. Management accounting is essential for an organization to be better equipped and to control functions.
Management accounting information differs from financial accountancy information in several ways:
Ø while shareholders, creditors, and public regulators use publicly reported financial accountancy information, only managers within the organization use the normally confidential management accounting information.
Ø while financial accountancy information is historical, management accounting information is primarily forward-looking.
Ø while financial accountancy information is case-based, management accounting information is model-based with a degree of abstraction in order to support generic decision making.
Ø while financial accountancy information is computed by reference to general financial accounting standards, management accounting information is computed by reference to the needs of managers, often using management information systems.
Key point here is that a CPA and a CGMA offer both financial and management accounting and can provide the overall picture that a company needs to thrive.
-Michael Hermanson, CPA | CGMA