After earning a Bachelor of Science in Accounting, many professionals consider studying for the certified management accountant (CMA) exam. But there is a lot to think about before taking this step.
For instance, is a certification in management accounting the right path for you? Or would becoming a certified public accountant (CPA) better suit your career goals? Beyond earning an accounting degree, how much preparation will you need to do to pass the CMA exam?
Here’s an overview of all these topics, along with helpful tips as you consider taking the CMA exam and becoming a certified management accountant.
What Is a CMA and What Does a Certified Management Accountant Do?
In the United States and around the globe, the CMA is an advanced certification obtained by finance professionals who work in management accounting. The CMA credential indicates that someone not only possesses an accounting degree and sufficient knowledge and experience in accounting, but also that they are skilled in more strategic financial accounting practices. The exam and title are issued by the Institute of Management Accountants (IMA).
Beyond crunching numbers and generating reports, a certified management accountant will also gather data that will empower key stakeholders to make informed decisions. In the field of management accounting, a CMA may offer recommendations for how an organization should manage investments, capitalize on market trends, ensure compliance, and mitigate risk. An experienced professional with the CMA credential will also typically oversee budgeting, planning, and the operations of junior-level accounting staff.
Why Should Professionals Pursue the CMA Certification?
Management accounting is a specialized field that requires a significant amount of knowledge and expertise. A CMA certification can open many new doors for an accountant who wants to be involved in business leadership and financial management. Access to these types of challenging and rewarding experiences is one of the top reasons to earn the CMA accounting title.
While an accounting degree such as an online bachelor’s degree in accounting is generally required for entry into the profession, employers will recognize the additional skills and experience that come with earning a CMA designation. For less seasoned professionals, successfully completing the CMA accounting exam can mean rapidly closing any skill gaps and accelerating their career more quickly.
Becoming a CMA involves meeting a very high professional standard and proving your competencies, which can ultimately help advance your career. Overall, having the credibility of the CMA certification attached to your name can also result in a higher earning potential and more advanced responsibilities.
Is a CMA Designation Worth It?
Someone interested in a management accounting career will naturally be curious about the bottom line of a CMA certification. Is the amount of time and money that goes into becoming a certified management accountant worth it from a financial standpoint? On average, do CMAs experience a meaningful return on that investment?
As the IMA reports, the higher pay associated with the CMA title does leave certified professionals in the black. According to the organization, certified management accountants around the globe earn 63% more than non-certified professionals in 2020.
Moreover, as revealed in a 2017 IMA report, management accounting professionals who take the exam between the ages of 22 and 35 can make up to $1,745 in net earnings for each hour of study time. For someone who spends roughly 300 hours on exam preparation — and who invests money in earning the CMA credential and maintaining an IMA membership — this can result in a net value of up to $523,642 across one’s working life.
These figures point toward “a significant return on investment,” as the IMA notes. “To put it succinctly for non-certified accountants, there is simply no better investment of your time and money than those hours and dollars spent attaining and maintaining the CMA credential.”
CMA vs. CPA: What’s the Difference?
The path to earning a CMA certification and becoming a certified management accountant is somewhat similar to the process of becoming a certified public accountant and passing the CPA exam.
Either qualification can help an accountant demonstrate mastery of accounting principles, commitment to a higher standard of ethics, and dedication to the field. Certified accountants can also see higher pay rates. Moreover, either the CMA or CPA can make a positive impression on clients and employers who seek accounting professionals with a certain level of experience and a good reputation.
The difference between these accounting designations and roles is that CMAs are better prepared to participate in financial management. They can help with strategy and financial decision-making, often drawing on a combination of accounting expertise, industry insight, and professional experience to advise companies on matters related to corporate finance.
Can You Get Both a CPA License and a CMA Certification?
Not everyone who wants to work in management accounting will become a certified public accountant. But, for some professionals, earning a dual certification and possessing both a CPA license and CMA credential has its advantages.
It is a way to set yourself apart from other job applicants and expand your career possibilities into both public accounting and management accounting. Plus, there are increased earning possibilities.
IMA’s 2020 Global Salary Survey found that U.S. accountants who held both the CPA and CMA designations earn 55% more than those without either. By comparison, being a CMA without a CPA license resulted in a 36% salary advantage in the U.S. (As noted earlier, international data shows that CMAs around the world earn a median total compensation that is 63% higher than their non-certified counterparts.)
About the CMA Accounting Exam
Before setting your sights on becoming a certified management accountant and launching into CMA accounting exam preparation, it’s wise to make sure you meet the eligibility requirements. Moreover, it can help to take a look at the general test structure to help direct your guided or self-study.
CMA Exam Eligibility
Before attempting to enroll in the CMA program, be advised that you will need to hold an active IMA membership and meet the academic qualifications and work experience requirements. Specifically, the Institute of Management Accountants requires that you hold a bachelor’s degree or equivalent certification. Plus, you will need to have worked for at least two consecutive years in financial management or management accounting.
You will also have to pay membership and exam fees, but academic and student IMA members may be eligible for discounted rates.
CMA Exam Structure
This two-part exam tests CMA candidates on a dozen different management accounting subjects and skills.
The first component of the CMA exam, “Financial Planning, Performance, and Analytics,” covers the following six competencies:
- External financial reporting decisions
- Planning, budgeting, and forecasting
- Performance management
- Cost management
- Internal controls
- Technology and analytics
The second part, “Strategic Financial Management,” addresses six additional competencies:
- Financial statement analysis
- Corporate finance
- Decision analysis
- Risk management
- Investment decisions
- Professional ethics
When taking the CMA accounting exam, keep in mind that you will sit for these two parts separately. However, you will need to complete both within a three-year period to earn your CMA designation.
Is the CMA Accounting Exam Hard to Pass?
The CMA exam is not widely considered an easy test. According to the IMA, the organization that produces the CMA accounting exam, the global pass rates across both test sections were 45% in May 2020. This challenging test requires a great deal of study time and preparation.
4 Tips and Strategies for Success on the CMA Exam
Here are some tips to consider before you start preparing for the CMA review process:
1. Choose an IMA-Endorsed Program for Your Accounting Degree
The IMA’s Higher Education Endorsement Program recognizes business school curricula that meet strict educational standards and enable students to prepare for CMA certification and a career in management accounting. By taking courses through an IMA-endorsed program, prospective CMA candidates engage with accounting principles and other concepts that directly relate to exam material.
2. Determine Whether You Prefer Studying Solo or in a Structured Course Environment
Some people find the routine and camaraderie of a test prep course to be motivating and encouraging. Others thrive on a solo study regimen where they can set their own pace. Reflect back on your online accounting degree experiences and consider what study format worked best for you.
3. Choose Exam Prep Materials Suited to Your Learning Style
Whether you are more of a visual or auditory learner (e.g., watching video lectures and creating your own flashcards), or someone who learns by doing (e.g., taking notes and trying practice questions), research what CMA accounting review courses and test preparation materials are available. Find ones that help you retain concepts successfully and make steady progress toward your study goals. Spend some time exploring free resources before purchasing any one test prep book or enrolling in a CMA course.
4. Aim for Mastery Rather Than Short-Term Memorization
Avoid the pitfall of cramming concepts to ace the exam. The CMA accounting designation sets experts apart, so a focus on expanding the depth and breadth of your understanding will help you succeed. As you study, apply the concepts into your professional life to help solidify your knowledge.
CMA Accounting Certification: How a Bachelor’s Degree Helps
If you’re just starting out toward a career in finance and management accounting, you may be unsure of what degree is best for a prospective certified management accountant.
In the simplest terms, the IMA requires that CMA test-takers hold a bachelor’s degree from an accredited institution. While the organization does not specifically demand an accounting degree, it can be a smart choice for someone eager to pursue this path. This is especially true since at least two years of related professional experience are part of the eligibility requirements.
Earning a bachelor’s degree in accounting or finance from an IMA-endorsed college or university can help you build the foundational and advanced skills required to enter the profession. Plus, with supportive and experienced faculty at your side, you can more confidently prepare for what’s ahead with your CMA certification and career.
Consider UAB’s IMA-Endorsed Online Accounting Program
The online Bachelor of Science in Accounting at the University of Alabama at Birmingham is one of just several dozen academic programs endorsed by the IMA as a leader in CMA accounting exam test preparation. Students who graduate from UAB’s online accounting degree program are already well prepared to earn the esteemed CMA designation.
To learn more about UAB’s online Bachelor of Science in Accounting and how it can help prepare you for a career as a certified management accountant, reach out to an enrollment advisor today.