Last Updated On July 27th, 2016 at 08:24 pm
The professional certification offered by the IMA in the fields of advanced financial and accounting management is referred to as the CMA or Certified Management Accountant. An individual possessing this certification has in-depth knowledge of decision support, analysis, professional ethics and financial management, control and planning, internal controls, cost management, performance and risk management. The knowledge base, as well as credentials of a CMA, proves to be highly beneficial while working in consulting firms, financial services, and multinational organizations.
In the US, the CMA is the highest qualification in the field of management accountancy. It provides global credibility and recognition as the IMA members. The individuals possessing the CMA certification get international opportunities in the world of finance and accounting, with numerous prospects and large pay packets. This certification also helps in increasing the competence and confidence of the individuals.
Eligibility Criteria for CMA Course
For getting CMA certification, it is necessary to fulfill the eligibility requirements that are laid down by the IMA. These are discussed below:
- The individuals must possess a bachelor’s degree in the fields of economics, finance or accounting. The study program for the degree must cover different aspects of business studies, like marketing, business law, taxation, and management.
- The individuals must obtain the essential work experience. This experience must be of at least two-year duration. The work must be related to a CMA area. The examples of these jobs are financial analysis, accounting, budgeting, and auditing. The candidates can also finish their work experience after taking their exam. The work requirement can also include part-time positions. A candidate must dedicate at least twenty hours per week to a job to make it a part-time work. One thing that must be kept in mind is that the part-time work of 4 years can fulfill the requirement of two-year work experience.
- The last eligibility requirement is to pass the CMA exam successfully. But in order to appear for this exam, one must obtain the membership of IMA first. Once the membership fee is paid, the candidate can appear for the exam within the next three years. The verification form must also be downloaded from the official website of IMA.
CMA Entrance Exam Pattern
The exam for the CMA certification consists of 2 sections. The organization of the exam was done in 4 parts before the year 2010. These parts included accounting, business analysis, strategic management and management accounting. Now, it contains 2 parts that must be finished in four hours. The material covered by these parts is similar to that of the former 4-part exam. Additionally, it lays stress on control, management, and analysis of the finances, along with decision support.
The exam is conducted three times every year. There are one hundred multiple choice questions in each section, along with 2 thirty-minute questions of the essay type. For completing the sections of multiple-choice questions, three hours are given to the candidates, and for the essays, one hour is given. For receiving suitable credits, the essay questions must be attempted properly. The result of the first and second part of the exam is given on a zero to five-hundred scale. The minimum passing score is 360. Three years, starting from the time of registration is given to the candidates for passing both sections of the certification exam.
Course Structure of CMA Course
The CMA course is divided into two parts. These parts are discussed below:
The first part consists of subjects like forecasting, budgeting, and planning; cost management, external finance reporting decisions, and performance management. The topics covered by these subjects are given below:
- Forecasting, Budgeting, and Planning: It covers topics like budgeting concepts, types of budgets, project budgeting, top-level planning, and Strategic planning process.
- Performance Management: The topics covered on this subject include costs, asset investments, key performance indicators, profits, revenues, and balanced scorecard.
- External Financial Reporting Decisions: Topics like income measurement, equity transaction’s impact, asset valuation, income statement, balance sheet and revenue recognition are covered by this subject.
- Cost Management: This subject includes cost measurement concepts, management of supply chain, value chain analysis, efficient accounting processes, lean manufacturing, overhead cost allocation, etc.
The subjects related to financial decision-making form the second part. The subjects along with the topics covered by them are provided below:
- Corporate Finance: This subject covers topics like international finance, managing working capital, working capital management, dividend policy, market risks, and foreign exchange.
- Risk Management: The topics covered on this subject include management and analysis of risk, political risk and legal compliance, operational risk, and ERM.
- Financial Statement Analysis: It includes earning quantities, profitability analysis, performance evaluation and interpreting financial ratios.
- Decision Analysis: This subject covers value and costs based approaches, pricing methodologies, implications of income tax, and relevant data concepts.
The ICAI-IMA Membership
A MoU has been formed between the IMA and ICAI or Institutes of Cost Accountants of India. This helps in enabling mutual cooperation and recognition between them for developing the management accountancy profession. This helps in providing benefits to the students and members of both these institutes while they pursue excellence in their training as well as education and continue their development in the profession of management accountancy. Due to this MoU, any member of the ICAI can obtain the membership of the IMA. The vice versa is also true. Any member of the IMA that enrolls in the ICAI does not get the certification of practicing in India.
The CMA certification is highly beneficial for those who are pursuing careers in the field of finance and accounting. The demand of the CMA certified individuals is increasing to an increase in the number of US financial multinational companies, foreign direct investment, and globalization in India.
The main responsibility of the CMA holders is to ensure that the business’s internal finances are in proper order. They also play a major role in the strategic planning of a business. They evaluate and design processes of businesses, and search for irregularities in accounting. They also do cost management, budgeting, and asset management and performance evaluation. They are also responsible for tracking the transactions. Thus, the job profile of CMA certifiers includes CFO or Chief Financial Officer, finance manager, budget analyst, staff accountant, CEO, and internal auditor.