Certified Management Accountant Exam

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Certified Management Accountant (CMA)

History

The “Certified Management Accountant” (CMA) program was launched in 1972 by the National Association of Accountants (NAA), a professional organization dating back to 1919 that would later become the “Institute of Management Accountants” (IMA). [1] Today, the IMA provides networking, education, research, advocacy and professional credentialing services to more than 70,000 accountants and financial professionals worldwide. [2] The ICMA (Institute of Certified Management Accountants) is an affiliate organization responsible for developing, administering and scoring the CMA examination on behalf of the IMA.[3]

Function of the Test

CMA Study Guide

The CMA credential is granted to eligible individuals who take and pass the CMA certification exam and who have demonstrated that they meet CMA work experience requirement. Only those individuals who have earned a bachelor’s degree from an accredited college or university and who are active IMA members are eligible to sit for the exam. After passing the exam, successful candidates will be awarded the CMA credential provided that they have achieved two years of continuous full time employment in financial management or management accounting (or four years of continuous part time employment). If not completed before taking the exam, this “experience requirement” must be met within 7 years of passing the exam.[4] Accountants and financial professionals who have earned the CMA credential are recognized around the world as experts in their field with advanced skills in financial planning and analysis, decision support, ethics and management control.[5] CMAs are employed in a variety of sectors across the globe: from government and non-profit organizations to private financial management firms, academia, and large multinational corporations.[6] The CMA credential confers greater career flexibility and earning potential to those who achieve certification. CMA professionals have more career opportunities and earn up to 1/3 more than their non-certified counterparts in business.[7]

Test Administration

CMA Flashcards

To enter the CMA program and become eligible to sit for Part I and 2 of the CMA exam, candidates must be active members of the IMA and must have completed a bachelor’s degree from an accredited college or university.[8] Both parts of the exam are given during three testing periods every year in January/February, May/June, and September/October. Candidates schedule their preferred dates directly with the authorized testing vendor Prometric upon receiving authorization to test from ICMA. Each authorization applies to a single, specific testing window and exams cannot be scheduled or rescheduled outside the authorized window without re-registering and paying the exam fee to ICMA.[9] Both a “CMA Entrance Fee” of $240 and an “Examination Fee” must be paid to the IMA in order to sit for the exam. The examination fee is $395 per part. Students and academic members receive substantial discounts. The CMA Entrance Fee for these categories is $120, and the Examination Fee for students is $296.25 per part (a 25% discount) and $197.50 per part for academics (a 50% discount).[10] Testing centers are compliant with the Americans with Disabilities Act (ADA), and accommodations may be made available for candidates on request as long as they do not interfere with measuring the knowledge or skills included in the exam. Requests for any necessary accommodations must be made at least two months before the exam.[11] Candidates have three years from the time they enter the CMA Certification Program in which to pass both parts of the exam. A candidate may retake either part of the exam any number of times, but each part can be taken only once during a given testing window, and no more than three times in a 12-month period. Candidates must re-register and pay the appropriate fees for each attempt.[12] If a candidate has not passed both parts of the exam within three years, the passed part expires and the candidate will need to begin again by paying the CMA Entrance Fee and registering, paying for, and completing both parts of the exam.[13]

Test Format

Sections of the CMA Test
CMA Pt 1 Test Subject Areas Percent
External Financial Reporting Decisions 15%
Planning, Budgeting and Forecasting 30%
Performance Management 20%
Cost Management 20%
Internal Controls 15%
Total 100%
CMA Pt 2 Test Subject Areas Percent
Financial Statement Analysis 15%
Corporate Finance 15%
Decision Analysis 15%
Risk Management 15%
Investment Decisions 15%
Professional Ethics 15%
Total 100%

Test Structure

The CMA consists of two parts. Part 1 contains five major topics: External Financial Reporting Decisions; Planning, Budgeting and Forecasting; Performance Management; Cost management; and Internal Controls. This part contains 100 multiple choice questions plus two essays with four hours to complete all of it. Part 2 covers six topics: Financial Statement Analysis; Corporate Finance; Decision Analysis; Risk Management; Investment Decisions; and Professional Ethics. Similar to Part 1, Part 2 allows four hours to complete 100 multiple choice questions and two essays.

Test Environment

Testing for the CMA takes place at Prometric Testing Sites. There, proof of identity is required. Candidates are expected to arrrive at least half an hour before their test is scheduled to begin to allow enough time to check in and find a seat. A calculator small, six-function calculator is allowed during the exam. Electronic devices are typically prohibited from the testing center.

Test Content

  • Sample CMA Questions
  1. Which of the following is NOT considered part of the production budget?
    A. Manufacturing costs
    B. Distribution costs
    C. Inventory levels
    D. Supervisor salaries
  2. Which concept underscores the importance of accounting performance measurement in the decision making process?
    A. Supply chain management
    B. Responsibility accounting
    C. Generally Accepted Accounting Principles
    D. Total Quality Management
  3. Which is true with respect to the difference that variable costing versus absorption costing would have on an income statement?
    A. Absorption costing uses variable costs classified by job
    B. Inventory figures are reported differently
    C. Variable costing defers fixed overhead costs
    D. Costs are not reported as a cost of goods sold
  4. Which benefit is NOT adirect result of benchmarking?
    A. Improvement of operations
    B. Creation manufacturing efficiency
    C. Increase of customer base
    D. Measurement of ability to compete
  5. According to the Institute of Management Accountant, a management accountant demonstrate credibility by...
    A. providing fair and objective information
    B. informing subordinates to keep information confidential
    C. performing activities responsibly
    D. avoiding conflicts of interest
  6. Multinational corporations protect themselves against foreign currency translation exposure by...
    A. using a standard exchange rate
    B. hiring accountants from their subsidiaries' countries
    C. purchasing materials from foreign nations
    D. preparing consolidated financial statements
  7. How does an organization facilitate customer payments when it sells products in multiple states?
    A. Lockbox systems
    B. Concentration banking
    C. Electronic commerce
    D. Accounts payable
  8. Capital budgeting considers all but which of the following factors?
    A. The cost of the project
    B. The cash flow of a project
    C. The net investment for the organization
    D. The rate of return of the project
  9. Which of the following behaviors is NOT considered to lead to unethical behavior?
    A. Slight exaggerations on performance evaluations
    B. Disrespect for authority
    C. Whistle blowing
    D. Using untruthful sales practices to generate customers

More free CMA practice test questions.

Scoring

Exam Part 1 and Part 2 each consist of 100 multiple-choice, and two essay questions. For each part, candidates first complete the multiple-choice section and turn it in for grading; those who answer 50% or more of the questions correctly are given the essay questions to complete. Essays are reviewed and graded offline, and the score obtained on the essay is added to the score from the multiple-choice section to determine a final, weighted score for that exam part. Grading is subject to checks and balances to insure that grading is performed in a fair, equitable and consistent manner for all candidates.[14] Scores on Parts 1 and 2 of the exam are scaled to account for varying degrees of difficulty among different exam “forms” or versions. Scaled scores for each part may range from 0-500, with a scaled score of 360 being the minimum passing score for each part. Scores are mailed to candidates approximately 6 weeks after they have completed both parts of the exam. Only those who do not pass the exam are sent a detailed “performance report” showing performance on each of the 5 topic areas and on the essay section as an aid in preparing to retake the exam.[15] The CMA exam is a rigorous exam. In 2014, worldwide pass rates were 35% for Part 1 (Financial Planning, Performance, and Control) and 49% for Part 2 (Financial Decision Making). Candidates in Europe and the Americas performed better overall, with Part 1 pass rates at 53% and Part 2 pass rates at 63% and 57%, respectively.[16] Those who complete both parts of the exam within two months and who score exceptionally well may be eligible to receive a “Certificate of Distinguished Performance” from the ICMA Board of Regents. Additional awards are available to top scorers.[17]

Answers to Sample Questions

1;B 2;B 3;B 4;C 5;A 6;D 7;B 8;D 9;C

References

  1. ^ About IMA: Our History January 9, 2015
  2. ^ About the IMA: Our Mission January 9, 2015
  3. ^ Become a CMA January 9, 2015
  4. ^ CMA Handbook December 27, 2014
  5. ^ Become a CMA December 27, 2014
  6. ^ CMA Brochure December 27, 2014
  7. ^ Become a CMA December 27, 2014
  8. ^ CMA Examination Handbook January 4, 2015
  9. ^ CMA Examination Handbook January 4, 2015
  10. ^ Exam Fees January 4, 2015
  11. ^ CMA Examination Handbook January 4, 2015
  12. ^ FAQs: Study and Exam Process January 4, 2015
  13. ^ Exam Procedures and Registration January 4, 2015
  14. ^ CMA Examination Handbook January 4, 2015
  15. ^ CMA Exam Scores January 8, 2015
  16. ^ ICMA CMA Examinations Summary of Pass Rates December 27, 2014
  17. ^ CMA Handbook December 27, 2014