CEO Message – Mutual Recognition Agreements and IFAC

Prof. Janek Ratnatunga
Prof. Janek Ratnatunga, CEO, ICMA Australia

The ICMA is often asked two different but related questions: (1) do you have any Mutual Recognition Agreements (MRAs) with other global professional accounting bodies, and (2) is ICMA a member of the International Federation of Accountants (IFAC)?

In answering the first question, it is worth noting that The Institute of Certified Management Accountants (Australia) was formed as the only global specialist management accounting body operating at the post-graduate level. In other words, the ICMA draws its membership mainly from individuals who are already members of other professional bodies which operate at the school-leaver and undergraduate-level of education and training.

The ICMA therefore is not a generalist professional body with large numbers of members; but instead an exclusive specialist body with tight controls over who does our education programs. Other large global management accounting bodies allow their courses to be taught by training organisations and individuals external to them; and controls quality by only running the examinations. ICMA (Australia) does not permit unrelated third parties to teach the course syllabus. Only ICMA trained professionals are permitted to teach the CMA program via Recognised Provider Institutions; and all assessments are done only by ICMA.

This difference in approach to training specialist management accountants makes it difficult for ICMA (Australia) to enter into any Mutual Recognition Agreements with other global professional accounting bodies. Most MRAs require full reciprocal membership rights; which is not possible as CMA (Australia) members require all members to complete the 2 post-graduate level subjects: (1) Strategic Cost Management and (2) Strategic Business Analysis; no matter what their previous educational and professional training is. This quality requirement required of our members will not be compromised by ICMA when entering into MRAs.

This brings me to the second question: i.e. is ICMA a member of the International Federation of Accountants (IFAC)? The IFAC is now only a body for the financial accounting profession after that body closed its management accounting section about 5 years ago. Some management accounting bodies resigned from IFAC at that time [e.g. IMA (USA)]; whilst others continued their membership for their own strategic reasons [e.g. CIMA (UK)]. The IFAC draws its membership from a wide variety of professional bodies including those at the Accounting Technician and Bookkeeper levels. For these reasons, the ICMA has not applied for IFAC membership.

From time to time ICMA conducts its own review of members’ wishes regarding IFAC. In the past ICMA members have overwhelmingly voted not to apply for membership of the International Federation of Accountants (IFAC) as it sees no strategic reasons for doing so. However, at the last AGM (November 2013) two committees were formed: (1) to look into the strategic reasons and costs associated with joining IFAC and (2) to explore the possibility of joining with other management accounting bodies to set up a global body Management Accounting Collaborative; with similar objectives to IFAC, but with a focus only on management accounting.

When these reports are in; I will communicate the results to all members.

Best Wishes to all members in their professional life

Professor Janek Ratnatunga

CEO, ICMA Australia

About Prof Janek Ratnatunga 1129 Articles
Professor Janek Ratnatunga is CEO of the Institute of Certified Management Accountants. He has held appointments at the University of Melbourne, Monash University and the Australian National University in Australia; and the Universities of Washington, Richmond and Rhode Island in the USA. Prior to his academic career he worked with KPMG.