The Certified Management Accountant (CMA) designation is the most prominent certification for management accountants: there are close to 20,000 CMAs worldwide. This article will examine the CMA designation in depth so that you can weigh the costs and benefits of pursuing a CMA.
What Is the CMA Designation?
The Institute of Management Accountants (IMA), a worldwide association, awards the CMA designation to accounting and financial professionals who successfully complete its requirements:
- Complete a bachelor's degree from an accredited college or university
- Obtain a basic background in economics, statistics and financial accounting
- Acquire two years of relevant work experience
- Pass two exams covering advanced financial planning, risk analysis, internal controls and financial decision making
Once you become a CMA, you'll need to accrue 30 hours of continuing professional education credits, two of which must cover ethics, each year. You must also purchase an annual IMA membership to maintain your CMA status.
What Is the Institute of Management Accountants?
The IMA is a global organization of approximately 65,000 accountants and financial professionals who work inside businesses and organizations. The institute helps these professionals to further develop their management accounting skills and knowledge, connect with their peers in the field and expand their career opportunities. It also promotes high standards of ethics and best practices in the industry. The IMA was founded in 1919 and it has been offering the CMA designation since 1972.
The CMA Exam
The CMA exam is divided into two parts, each of which lasts four hours. You can take the two exams in whichever order you prefer; part I is not a prerequisite for part II. Each part is administered during three, two-month exam windows each year: January and February, May and June, and September and October. The exam is administered by Prometric Testing Centers, which has locations throughout the United States and around the world. You must pass both exams within three years of entering the CMA program. Also, you must register for an exam within one year of entering the program.
Part I of the exam covers financial planning, performance and control. It focuses on planning, budgeting and forecasting, performance measurement, cost management, internal controls and professional ethics. Part II covers financial decision making and focuses on financial statement analysis, corporate finance, decision analysis and risk management, investment decisions and, again, professional ethics.
The exam questions are based on real-world scenarios, so textbook studying alone is not enough to pass the tests. Your mandatory two-plus years of relevant work experience will mean the difference between passing and failing. The CMA exam has a global pass rate of about 40%, according to the IMA.
There are opportunities for CMAs at a wide range of companies, because all companies need someone to manage their finances. CMAs work for public companies, private businesses and government agencies under a variety of job titles, including: management accountant, cost accountant, managerial accountant, industrial accountant, private accountant or corporate accountant. Many CMAs also hold other designations, such as Certified Public Accountant (CPA), Certified Financial Manager (CFM), Certified Fraud Examiner (CFE) and Certified Internal Auditor (CIA).
What Does the CMA Designations Mean to Employers?
Obtaining a CMA demonstrates a commitment to the profession because of the time and financial costs required. The CMA designation also signals that a job applicant or employee has a minimum level of experience in the profession and a post-graduate-level understanding of management accounting principles and how to apply them in real life.
Because CMAs must meet annual continuing education requirements, employers know that they are always learning, improving their skill sets and staying on top of any new developments in the field. A CMA holder also completes ongoing ethics training and agrees to uphold the IMA Statement of Ethical Professional Practice.
According to the IMA, the following companies "have CMAs in key management roles:" 3M, Alcoa, AT&T, Bank of America, Boeing, Cargill, Caterpillar, ConAgra, Hewlett-Packard, Johnson & Johnson, Microsoft, Procter & Gamble, KeyCorp, Whirlpool, Saudi Aramco, Verizon and Xerox. This list should not be considered exhaustive, but it offers a snapshot of the caliber of company you may be able to work for as a CMA.
The Bottom Line
Those who earn the CMA designation distinguish themselves as the best management accountants in the business, and they earn the salaries to prove it. According to the IMA's Annual Salary Survey, CMAs on average earn nearly $27,000 more in total annual compensation (defined as salary, bonuses and profit sharing) than non-CMAs. A new designation, the Chartered Global Management Accountant, offered by the American Institute of CPAs, may prove to be equally valuable in the coming years, but for now, the CMA designation is the pre-eminent certification for management accountants. Overall, becoming a CMA shows that you are experienced, skilled and dedicated in advanced financial planning, risk analysis, internal controls and financial decision making.