For candidates who are curious about what they should do after the examination, there is just one answer: relax. Nothing is more important than to use this time to relax. This examination is not easy to prepare for or to attempt, thus, the candidates who have done so...
Reciprocity Between ICAI and IMA If a person is a member of the ICAI (Institute of Chartered Accountants of India), he or she can apply for the CMA (US) membership provided the person has a valid ICAI certificate. Visit the IMA page here. Conversely, if a person is a...
1. Understand the Examination To start off, do not panic. Having a clear understanding of what exactly needs to be done helps the candidate in focusing on creating achievable goals. If the candidate has direction, he or she will be able to attempt and pass the...
This is intended to brief the candidate about the examination format, length, difficulty level, and the type of questions to expect on the day of the examination. Format The examination is completely computer-based and is conducted at several Prometric centres around...
Part 2 of the CMA (US) examination consists of financial analysis and decision making. Part 2 is divided into six sections. The percentage in the brackets represent the weightage of that topic: Financial Statement Analysis (25%) Corporate Finance (20%) Decision...
Certified Management Accountant (US) has special importance in India since it is a globally-recognised qualification. A Mutual Recognition Act (MRA) between the IMA in the USA and the ICWA in India has rendered it equivalent to the ICWA qualification in India,...
A candidate has to meet certain requirements before he or she is eligible to appear for the examination. Education Requirements First and foremost, an undergraduate degree from an established university is a must for any candidate. A candidate must go through...
Given below are the steps to apply for the CMA (US) examination: Pay IMA Membership Fees When the candidate has decided to take the examination, he or she may join the IMA as a professional member. If the candidate is a resident of USA or Canada and is below 33 years...
Part 1 of the CMA (US) examination consists of financial reporting, planning, performance, and internal control. A candidate may find this like an introduction to the FAR section, a bit like the AUD section with regards to internal control, and a detailed, in-depth version of the BEC section of the CPA examination if he or she would have taken it before.
Part 1 is divided into five sections. The percentage in the brackets represent the number of questions pertaining to that topic:
- External Financial Reporting Decisions (15%)
- Planning, Budgeting, and Forecasting (30%)
- Performance Management (20%)
- Cost Management (20%)
- Internal Control (15%)
A. External Financial Reporting Decisions
This is a new section in the examination. It covers the base of financial accounting, which includes preparation of financial statements, assets and liabilities valuation, operating and capital leases, equity transactions and their impact on the business, recognition of revenue, measurement of income, and the major differences between the accounting principles—GAAP of the USA and the IFRS.
Candidates are required to interpret and understand the items on the balance sheet, income statement, statement regarding changes in equity, cash flow statement, and the relationship among all these financial statements. Candidates who have studied accounting as a subject before would find this section straightforward.
B. Planning, Budgeting, and Forecasting
As mentioned above, this section has the most weightage in the examination. It covers the process of strategic planning, budgeting concepts, profit plans for the year and supporting schedules, different types of budgets, top-level planning and analysis, and forecasting.
Candidates are required to calculate several financial items like the cost of goods manufactured, cost of goods sold among other items in the budget. This section also contains conceptual questions such as the definition of budgeting and other terms related to it. Since this is the largest section of Part 1, the questions go in-depth and become lengthy and complex.
It is advised to go slowly in this section; as the familiarity with the section increases, the accuracy of calculations and answers also increases.
C. Performance Management
This section contains questions regarding the different ways to evaluate the performance of a business, including factors for performance evaluation, responsibility accounting, variance analysis based on flexible budgets and standard costs, key indicators of performance, and balanced scorecards.
Candidates who have worked in the accounting division of a company would find most of the evaluation tools familiar. However, a few elements such as standard costs would not be familiar to these candidates as they are used in manufacturing firms rather than service firms. It is advised to spend more time to understand the concept of standard costs.
D. Cost Management
This section accounts for 20% of the examination. It covers cost concepts, flow, and terminology, cost objectives, cost accumulation systems, concepts of cost measurement, overhead cost allocation, supply chain management, and business process performance.
It focuses on job order costing, activity-based costing, and process costing. Candidates must be familiar with concepts such as ERP, lean manufacturing, value chain analysis, the theory of constraints, continuous improvement, ABM, and efficient accounting processes.
E. Internal Controls
The last section of Part 1 represents 15% of the total. It covers internal control risk, corporate governance, procedures and standards, internal control environment, types of audits, responsibility and authority for internal auditing, assessment of the adequacy of accounting information system controls, and business continuity planning.
The questions are mostly conceptual and simple to understand, although the answers could be ambiguous in nature.
In conclusion, there is not much rote-learning in Part 1 of the examination. The questions are conceptual and require candidates to be clear with each of them and must be able to tell between the subtle differences among them. Questions are lengthy; it is advised to do the calculations carefully to avoid any errors and work on the long questions before the short ones if the candidate is running out of time.