Certified Management Accountant (CMA)

Certified Management Accountant (CMA)

What is a certified management accountant?

The Certified Management Accountant (CMA) is an accounting designation which signifies expertise in financial accounting and strategic management. This certification builds on financial accounting skills by adding management skills that help make strategic business decisions based on financial data.

The Institute of Management Accountants (IMA) issues CMA certification.

Key points to remember

  • A CMA designation signifies expertise in financial accounting and strategic management.
  • Certification is issued by the Institute of Management Accountants and applicants must pass a two-part exam, among other requirements.
  • CMAs offer a wide range of career options.

Understanding a certified management accountant (CMA)

CMAs offer a wide range of career options. They can access management positions such as vice president of finance, controller, chief financial officer and chief executive officer. CMAs can specialize in many roles, such as personnel accountant, cost accountant, corporate accountant, internal auditor, tax accountant, financial analyst and budget analyst.

Unlike the Chartered Public Accountant (CPA) certification, CMA certification is voluntary.

CMAs are subject to a code of ethics. The 2003 Freddie Mac scandal is an example of management accountants who do not adhere to a code of ethics. Company managers and management accountants deliberately underestimated the profit of the company. They also illegally used company resources for fundraising for federal candidates to influence decisions regarding Freddie Mac. These actions were illegal and unethical and violated the CMA code of ethics.

CMA applicants must be active members of the IMA and hold a bachelor’s or related professional certification and two years of continuous work experience in management accounting or financial management. They must also pass a rigorous examination.

Applicants should plan to study 150 to 170 hours per part to prepare for the two-part CMA exam. Applicants have four hours to answer the 100 questions and two essay questions for each part.

The first part covers financial reporting, planning, performance and control. It includes the following sections:

  • External financial reporting decisions: 15%
  • Planning, budgeting and forecasting: 30%
  • Performance management: 20%
  • Cost management: 20%
  • Internal controls: 15%

The second part covers financial decision making and includes the following sections:

  • Analysis of financial statements: 25%
  • Corporate finance: 20%

  • Decision analysis: 20%
  • Risk management: 10%
  • Investment decisions: 15%
  • Professional ethics: 10%

As of January 1, 2020, the exam structure will change. The first part will cover financial planning, performance and analysis and will include the following sections:

  • Cost management: 15%
  • Internal controls: 15%
  • Technology and analytics: 15%
  • Decisions regarding external financial reports: 15%
  • Planning, budgeting and forecasting: 20%
  • Performance management: 20%

The second part will deal with strategic financial management and will include the following sections:

  • Risk management: 10%
  • Investment decisions: 10%
  • Professional ethics: 15%
  • Analysis of financial statements: 20%
  • Corporate finance: 20%
  • Decision analysis: 25%

Live and virtual classes are available for applicants, as are the exam questions and the glossary terms. For more information, see the IMA CMA exam information page.

Special considerations

The hiring of accountants is expected to increase by 11% from 2020 to 2024. Business and process changes are expected to continue to shape the management accounting industry. Due to the lack of standardization, growth is expected to continue in the management accounting sector, as companies have considerable freedom in the design of management accounting systems. Management accounting designs and processes vary widely from company to company.

Other factors that contribute to the increased demand for management accountants include staffing needs, a healthy economy, advanced business platforms and corporate globalization.

History of certified management accountants

The industrial revolution created the need for superior cost accounting systems. The rail industry has influenced the accounting industry with financial statements, cost estimates, reports and other metrics to help businesses make informed decisions. The evolution of the rail industry and the rapid growth of financial institutions have shifted the focus from management accounting to include functions other than cost accounting, such as human resource accounting.

During the industrial revolution until the mid-1900s, companies made huge investments in natural resources, factories and equipment, which required cost accounting. In addition, management accounting has been used as cost accounting. After World War II, the teaching of management accounting was formalized when it was introduced into the master’s degree program in business administration at MIT and Harvard University. From the 1950s to the 1980s, the accounting industry focused on providing information for management control and planning.

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