Certified Management Accountant (CMA)

Certified Management Accountant (CMA)

Definition: The Certified Management Accountant (CMA) is a professional certification granted by the Institute of Management Accountants (IMA) signifying an individual’s expertise in financial management and strategic management. The certification requires passing a rigorous two-part examination covering various subjects in management accounting and fulfilling specific educational and professional experience criteria.

Examples

1. Industry Application: A CMA working for a large manufacturing company may lead cost analysis projects to improve profitability, streamline operations, and enhance budget efficiency.
2. Financial Strategy: A CMA in a financial consulting firm may advise clients on investment strategies, risk management, and financial planning, leveraging their management accounting skills.
3. Corporate Management: A CMA serving as a CFO in a mid-sized company utilizes their analytic skills to prepare management reports, optimize financial performance, and support strategic decision-making.

Frequently Asked Questions (FAQs)

What are the requirements to become a CMA?

To become a CMA, candidates must meet the following requirements:

1. Hold a bachelor’s degree from an accredited college or university, or an equivalent degree as determined by the IMA.
2. Pass the two-part CMA examination.
3. Acquire two continuous years of professional experience in management accounting or financial management.
4. Maintain membership in the IMA.

What topics are covered in the CMA exam?

The CMA exam is divided into two parts:

• Part 1: Financial Planning, Performance, and Analytics

  • External Financial Reporting Decisions
  • Planning, Budgeting, and Forecasting
  • Performance Management
  • Cost Management
  • Internal Controls
  • Technology and Analytics

• Part 2: Strategic Financial Management

  • Financial Statement Analysis
  • Corporate Finance
  • Decision Analysis
  • Risk Management
  • Investment Decisions
  • Professional Ethics

How long does it take to complete the CMA certification?

The time to complete the CMA certification varies, but most candidates take 12-18 months to prepare for and pass both parts of the exam, given their prior professional and educational commitments.

Is work experience required before taking the CMA exam?

No, work experience is not required before sitting for the CMA exam. However, candidates must obtain two continuous years of relevant professional experience within seven years of passing the CMA exam to earn the certification.

How does the CMA certification compare to the CPA?

While both the CMA and CPA are prestigious accounting certifications, they focus on different areas:

• CMA: Emphasizes management accounting and financial management within an organization.
• CPA: Focuses on public accounting, including auditing, tax, and regulatory compliance.

Related Terms

• CPA (Certified Public Accountant): A professional accounting designation issued by the American Institute of Certified Public Accountants (AICPA) for expertise in various fields of accounting and auditing.
• CGMA (Chartered Global Management Accountant): A globally recognized designation representing professionals in management accounting, jointly issued by the AICPA and the Chartered Institute of Management Accountants (CIMA).
• CFA (Chartered Financial Analyst): A globally recognized certification issued by the CFA Institute for professionals in investment management and financial analysis.

Online References

• Institute of Management Accountants (IMA)
• CMA Exam Details
• CMA Candidate Handbook

Suggested Books for Further Studies

• “Management Accounting: An Integrative Approach” by Kenneth Merchant and Wim Van der Stede
• “Cost Accounting: A Managerial Emphasis” by Charles T. Horngren, Srikant M. Datar, and Madhav V. Rajan
• “Strategic Management Accounting” by Keith Ward
• “CMA Exam Review 2023 & 2024: CMA Test Prep with Practice Questions” by Test Prep Books

Fundamentals of Certified Management Accountant (CMA): Accounting Basics Quiz

Thank you for exploring the detailed overview and quiz for the Certified Management Accountant (CMA) certification. Continue your journey in accounting and finance with rigorous preparation and dedication!