Tue, Aug 15, 2006
MERGER WARS! THE EMPIRE STRIKES BACK!
This is to inform ICMA Members that the merger negotiations between IMA and ICMA have now officially been terminated by both parties by mutual agreement.
It has been a long and interesting journey (to a far off Galaxy?) for the ICMA Executive. The merger talks initially commenced as an unofficial private discussion between the ICMA President Leon Duval and IMA President and CEO Paul Sharman in late 2004, when the two shared their vision of a unified profession with global standards. This was followed by a more official discussion in July 2005 between the two Presidents.
Following this 2005 discussion a resolution was put to the ICMA AGM in September 2005 to endorse a proposed merger of ICMA Australia with IMA (USA) on the proviso that existing membership statuses are appropriately preserved on transfer of membership to the merged entity. This resolution was passed with a large (but not unanimous) majority.
Discussions were then held in New Jersey between the representatives of the two bodies on Jan 30, 31 and Feb 1, 2006 and many issues were discussed. As there were more stakeholders present at this meeting compared to the first merger meeting, some changes were made by IMA that were contrary to the expectations of resolution put to the ICMA membership at its 2005 AGM.
However, as these changes were largely within the parameters of the authority given by the ICMA membership at the 2005 AGM; the ICMA President Leon Duval and IMA President and CEO Paul Sharman signed a draft MOU in February 2006 that each body agreed to take to their respective Executive Boards (at IMA this is called the Board of Regents) for ratification. In this MOU there were two issues that were potential 'deal-breakers':
1. That the IMA Board of Regents must agree to recognise all ICMA members with a CMA certification as being full-CMA members of IMA.
2. That the ICMA's two module CMA program is continued as a separate pipeline for qualified accountants.
The second 'deal-breaker' arose after the ICMA studied closely the syllabus and structure of IMA's CMA program and found that it does not differentiate between accounting graduates and non-accounting graduates (unlike the ICMA's GMA 'Conversion Program'), and thus requires all potential CMAs to study undergraduate-level course content. ICMA Australia felt this was needless duplication for accounting graduates and members of other recognised professional accounting bodies (such as. CPA, CA & CIMA). In contrast, ICMA Australia has positioned itself as a post-graduate professional accounting qualification in which its CMA program builds on knowledge and experience already obtained. Also the IMA's CMAs are required to have only 2-years experience as against the 5-years required by the ICMA Australia. As such, ICMA Australia believed that if its existing two part post-graduate CMA program is abandoned and prospective CMAs are required to take IMA's four undergraduate level courses as the education prerequisite for membership, the membership pipeline from the other accounting bodies (e.g. CPA, CA & CIMA) will disappear. The ICMA believed that this will give rise to serious questions on the membership growth potential of IMA in overseas market, especially in Australasia; and therefore the long term viability of the IMA Regional Council after the merger. Except for the Middle-East and the Netherlands (and of course the USA), ICMA Australia has more CMAs than IMA in every other country indicating its market acceptance vis-a-vis the IMA's CMA certification route.
In June 2006, the IMA's Board of Regents representative responded and it appeared that two issues of contention essentially remained, i.e. the recognition of all membership categories of ICMA, and the recognition of each body's education programs for CMA certification. The IMA response was discussed by your Executive in July 2006, and the IMA's changes to the February 2006 Draft MOU were rejected by ICMA Australia, and a counter proposal was made.
Subsequently, some discussions on the ICMA's counter proposal took place at a meeting between Professor Janek Ratnatunga and an IMA Board of Regents representative in North America, and it was agreed that the two Institutes terminate the merger talks and instead work closely to advance the profession of management accounting as independent bodies.