1.5 CIMA as a Professional Body: Members, Candidates, the Profession & Society
Key Takeaways
CIMA was founded in 1919 as the Institute of Cost and Works Accountants, received a Royal Charter in 1975 and took its current name in 1986.
A professional body protects the public by setting qualification standards, requiring continuing professional development and enforcing a code of ethics with disciplinary powers.
For candidates, CIMA sets the syllabus and assessments for the Certificate in Business Accounting and the CGMA Professional Qualification.
The CIMA Code of Ethics sets five fundamental principles: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.
CIMA serves the profession and society through research, guidance such as the Global Management Accounting Principles, and representation to governments and standard setters.
Why this topic is examined
Syllabus area A2 asks you to explain the role of CIMA as a professional body for management accountants: the need for a professional body in management accounting, and CIMA's role in relation to its members, candidates, the profession and society. Questions usually test whether you can match an activity to the right stakeholder group or recognise why self-regulation by a professional body benefits the public.
Why a profession needs a professional body
Employers, investors and the public rely on management accountants for information they cannot easily check themselves. A professional body gives them confidence that a member:
- has passed a recognised qualification covering the required knowledge and skills;
- keeps that knowledge current through continuing professional development (CPD);
- is bound by a code of ethics and can be disciplined if they breach it; and
- belongs to a community that shares research, guidance and best practice.
Without a professional body, anyone could call themselves a management accountant, standards would vary widely, and there would be no route for complaints about misconduct.
How CIMA developed
| Year | Milestone |
|---|---|
| 1919 | Founded as the Institute of Cost and Works Accountants (ICWA) to meet industry's need for better cost information |
| 1972 | Renamed the Institute of Cost and Management Accountants (ICMA) |
| 1975 | Granted a Royal Charter |
| 1986 | Renamed the Chartered Institute of Management Accountants (CIMA) |
| 1995 | Members given the right to use the title Chartered Management Accountant |
| 2012 | CIMA and the AICPA launch the Chartered Global Management Accountant (CGMA) designation |
| 2017 | CIMA and the AICPA form the Association of International Certified Professional Accountants, operating as AICPA & CIMA |
The name changes follow the evolution described in Section 1.4: from cost accounting in factories to management accounting across every type of organisation.
CIMA's role for each stakeholder group
| Stakeholder | What CIMA does | Example |
|---|---|---|
| Candidates (students) | Sets the syllabus, learning outcomes and exams; provides study resources; sets the requirements for membership | The Certificate in Business Accounting (BA1 to BA4) and the CGMA Professional Qualification |
| Members | Awards designations; requires CPD; issues the Code of Ethics; provides ethics support; investigates complaints and applies sanctions | Members use designatory letters such as ACMA or FCMA and the CGMA designation |
| The profession | Researches and publishes guidance and frameworks; promotes the value of management accounting | The Global Management Accounting Principles and the CGMA Competency Framework |
| Society | Acts in the public interest by maintaining professional standards; contributes to consultations by governments, regulators and standard setters | Commenting on proposed regulation affecting business reporting |
Candidates
For you as a Certificate candidate, CIMA's role is the most visible. CIMA:
- publishes the syllabus, with topic weightings and learning outcomes (BA2: context 10%, costing 25%, planning and control 30%, decision making 35%);
- sets and marks the objective tests, delivered by Pearson VUE either at test centres or online;
- provides official study support through the CGMA Study Hub and approved learning partners; and
- defines the route from the Certificate into the CGMA Professional Qualification, and on to membership once exams and practical experience requirements are complete.
Members
Once qualified, members must maintain their competence and follow the Code of Ethics. CIMA can investigate complaints against members and students, and sanctions for misconduct can include removal from membership. This disciplinary power is what makes self-regulation credible to the public.
The profession and society
CIMA and AICPA & CIMA produce research and practical guidance. The Global Management Accounting Principles (first published in 2014, second edition in 2023) and the CGMA Competency Framework describe what good management accounting looks like and the skills a finance professional needs. Through consultations and advocacy, CIMA represents the profession's view to governments and regulators. Because members work inside organisations, high professional standards help those organisations make sound decisions, which benefits employees, customers, investors and the wider economy.
The CIMA Code of Ethics
The CIMA Code of Ethics is based on the International Ethics Standards Board for Accountants (IESBA) Code. It applies to members and registered students. Detailed ethical conflict resolution is examined in BA4, but BA2 expects you to know the framework as part of CIMA's role.
Five fundamental principles
| Principle | Meaning |
|---|---|
| Integrity | Be straightforward and honest in all professional and business relationships; do not be associated with false or misleading information |
| Objectivity | Do not let bias, conflict of interest or undue influence override professional judgement |
| Professional competence and due care | Maintain the knowledge and skill needed for competent service and act diligently |
| Confidentiality | Do not disclose information obtained at work without proper authority or a legal or professional right or duty, and do not use it for personal advantage |
| Professional behaviour | Comply with laws and regulations and avoid conduct that discredits the profession |
Threats to compliance
The Code groups threats into five categories:
| Threat | Management accounting example |
|---|---|
| Self-interest | Your bonus depends on the division's profit, tempting you to delay recording costs |
| Self-review | You are asked to review a costing system you designed yourself |
| Advocacy | You promote an overly optimistic forecast to help secure a bank loan |
| Familiarity | You fail to question expense claims from a close friend in another department |
| Intimidation | A director threatens your job unless you remove an adverse variance from a report |
Safeguards, such as review by another person, rotation of duties, whistleblowing procedures and CIMA's ethics support, reduce threats to an acceptable level. If a conflict cannot be resolved internally through the organisation's procedures, a member should seek professional advice and, in the last resort, refuse to remain associated with the misleading information.
Important
Remember the difference between a principle and a threat. Integrity and objectivity are principles; intimidation and self-interest are threats to those principles. Examiners often mix the two lists in the answer options.
CIMA's ability to investigate complaints and remove members for misconduct mainly serves which purpose of a professional body?
Reducing the cost of objective test exams for candidates
Giving the public and employers confidence that members follow enforceable ethical standards
Setting the international financial reporting standards used in statutory accounts
Guaranteeing that every member's employer will be profitable
In which year was the Institute of Cost and Works Accountants, the body that became CIMA, founded?
1972
1986
1975
1919
A management accountant is told by a director that she will lose her job unless she removes an adverse variance from the board report. Under the CIMA Code of Ethics, which threat does this create?
Intimidation threat
Self-review threat
Familiarity threat
Advocacy threat
Sections you finish are checked off in the contents.