CMA Entrance Exam: An Overview

computerized CMA examIn order to become a CMA, you have to go through the CMA entrance exam. What exactly does it cover? Is it very difficult? Let’s take a look.

CMA Entrance Exam: The Format

The exam is 100% computerized with 100 multiple choice questions and two 30-minute essay questions. It consists of the following parts:

  • Financial Planning, Performance and Control.
  • Financial Decision Making.

Candidates are free to take either one or both parts of the exam within the same test windows. The exams have to be completed within 3 years, counting from the date the candidates pay the entrance fee.

CMA entrance exam: part one contentCMA Entrance Exam Content

The following curriculum and format is based on the latest release:

CMA Exam Part 1

  • Planning, budgeting, and forecasting.
  • Performance management.
  • Cost management.
  • Internal controls.
  • Professional ethics.

CMA Exam Part 2CMA entrance exam part two content

  • Financial statement analysis.
  • Corporate finance.
  • Decision analysis and risk management.
  • Investment decisions.
  • Professional ethics.

More Information On Each Topic

CMA Exam Part 1

Planning, budgeting, and forecasting (30%)

  • How to annual profit plans and supporting schedules.
  • Different types of budget e.g. activity-based budgeting, project budgeting and flexible budgeting.
  • Top-level planning and analysis.
  • Forecasting including quantitative methods e.g. regression analysis and learning curves.

Performance Management (25%)

  • How to analyze the finance statement items such as revenue, cost, profit and investment in assets.
  • Variance analysis based on flexible budgets and standard costs.
  • Responsibility accounting for revenue, cost, contribution and profit centers.
  • Balanced scorecards

 Cost Management (25%)

  • Cost concepts, flows and terminology.
  • Alternative cost objectives.
  • Cost measurement concepts.
  • Cost accumulation system e.g. job order costing, process costing, activity-based costing.
  • Overhead cost allocation.
  • Operational efficiency and business process performance topics e.g. JIT, MRP, theory of constraints, value chain analysis, benchmarking, ABM and continuous improvement.

Internal Control (15%)

  • Risk assessment
  • Internal control environment, procedures and standards.
  • Responsibility and authority of internal auditing.
  • Types of audits.
  • Assessing the adequacy of accounting information systems control.

Ethics (5%)

  • Ethical consideration for management accountants.

CMA Exam Part 2

Financial Statement Analysis (25%)

  • Principal financial statements and their uses.
  • Limitation of financial statement information.
  • Interpretation and analysis of financial statement e.g. ratio and comparative analyses.
  • Market value vs book value.
  • Fair value accounting.
  • Major difference between IFRS and US GAAP.
  • Off-balance sheet financing.
  • Cash-flow statement preparation, analysis and reconciliation.
  • Earnings quality.

Corporate Finance (25%)

  • Types of risk.
  • Measures of risk.
  • Portfolio management.
  • Options and futures.
  • Capital instruments for long-term financing.
  • Dividend policy.
  • Factors influencing the optimal capital structure.
  • Cost of capital.
  • Managing and financing working capital.
  • Mergers and acquisitions.
  • International finance.

Decision Analysis and Risk Management (25%)

  • Relevant data concepts.
  • Cost-volume-profit analysis.
  • Marginal analysis.
  • Make vs buy decisions.
  • Pricing.
  • Income tax implications for operational decision analysis.
  • Operational risk, Hazard risk and financial risk and strategic risk.
  • ERM

Investment Decision (20%)

  • Cash flow estimates.
  • Concepts of DCF (discounted cash flow), net present value, IRR (internal rate of return).
  • Non-discounting analysis techniques.
  • Income tax implications for investment decisions.
  • Ranking investment projects.
  • Risk analysis.
  • Real options.
  • Valuation models.

Professional Ethics (5%)

  • Ethical consideration for the organization.

It Looks Like an Awful Lot of Stuff to Study. What’s the Pass Rate?

The latest released pass rate has a rather dismal statistics: 35% for Part 1 and 42% for Part 2. Having said that, if you are looking at candidates from the “Americas” (mostly US) only, the pass rate is a more encouraging of 51-60% for the two parts.

For details, please refer to this page on CMA exam pass rate.

Now… Ready To Join The CMA Program?

If you would like to become a CMA, please check out the steps here or learn more about CMA entrance exam in this FAQ section.

For more information on the CMA entrance exam as well as tips on study tactics, please consider signing up to my e-course which is completely free. You can learn about the mini e-course here or sign up directly below.

Source: CMA Handbook

Comments

  1. Hiral says

    Hi…i am a Indian CA. Want 2 knw frm whr wud i get study material for CMA. And for which exam should i appear 1st CPA or CMA?

  2. mahesh says

    Hello,

    I am working in Eaton corporation since 5 years as a finanacial analyst i am pursuing mba finance and in third sem i am holding a bachelors in accounting .and also doing cfa level 1. so to get exemptions should i first do my masters in accounting ? or do you suggest to do acca or cima ? which one is best ? how cma will help me and how average time does it take to complete cma ?Kindly advise

    • StephanieStephanie says

      Hi Mahesh, given there are only 2 papers in the CMA exam nowadays, I don’t think there is any exemption (because it’s kind of hard to waive half of the exam). I would just focus on getting it done based on the knowledge you gained from the other professional exams. CFA level one is especially useful for the CMA exam.

      Once you are a CMA you can waive 9 papers out of the 14 required in ACCA: http://ipassthecmaexam.com/acca-exemptions-from-cma/

  3. Maggie says

    Hi Stephanie,

    I already passed Canada CMA Entrance exam, just wonder is that any help on my USA CAM or CPA? Thank you so much for your kind help!

    • StephanieStephanie says

      Hi Maggie, I am not 100% but sounds like it isn’t helpful to get prerequisite or waiver form either the US CMA. I am 100% sure it won’t work for US CPA. In fact, CMA Canada is good enough for management accounting qualification. I would say you only need to look for CPA if you want an additional credential. We have a lot more info on the US CPA exam here: http://ipassthecpaexam.com

  4. Monica says

    Hi Stephanie,
    Do you require work experience to qualify for CMA exam? I am afraid then i won’t be eligible for this exam, i have done my Bachelors in Commerce.

  5. marshall_jayb@yahoo.ca says

    Hello Stephanie,

    i am a graduate of accounting and an ACCA Holder with 3years audit experience in a “BIG 4″ professional services firm. i am looking to sit for the CMA this year. My questions are:
    1. Are there exemptions for ACCA Holders for any of the CMA exam parts?
    2. What opportunities are available for CMA holders in USA precisely TEXAS…..I mean are lucrative jobs readily available for CMA Holder in Texas like it is for the CPA Holders.

    Thanks

    • StephanieStephanie says

      Hello, if you are a ACCA holder then you are automatically qualified to take the CMA exam, but there is no exemption on the exam itself. Afterall there are only two parts and it’s pretty hard to get 50-100% exemptions.

      On general job opportunities in Texas, sorry I don’t have an answer since I don’t live in that state, but you can take a look at this salary report compiled by IMA among IMA members in the US:
      http://www.discoverima.org/index.html

      I will also work on an analysis based on this report shortly.
      Stephanie

  6. Hanan AK says

    Hi!
    My name is Hanan AK and i have done MBA, am 29 years old and working at a Chartered Accountancy firm as an auditor junior (Internee). Due to my 5 years gap in studies I am confused, all I want to do combination of studies which will ultimately lead me to high paid jobs in finance sector…am interested to do CMA than CFA. please let me know is it a good combination? why am considering CMA because it’s more into management line, you can say advance version of MBA and CFA is a standard. what you think, please guide me.
    Also I heard that after completing CMA (USA), CFA level 1 is exempted. Is it true???

    Please reply me asap. so i can join classes for CMA which is going to start after 1 week.

    regards,

    Hanan AK

    • StephanieStephanie says

      Hi Hanan,
      CMA is good for management (or general) accounting roles in corporations especially those with manufacturing capacity and deals with costing and inventory. It is also good if you aim for strategic planning or management roles in big multinational corporations. If this is what you are generally aiming for, then CMA is an excellent choice.

      CFA would make sense if you go for asset management, hedge funds and financial analyst in investment bank. It is a very different career path. In terms of the exam, there are overlap in Part 2 of CMA and Level 1 of CFA, but I haven’t heard of an exemption…

      Regards, Stephanie

  7. ali says

    Hi Stephanie,
    Your work deserves high appreciation for guiding to this extent. I’ve a question. I’m ACCA (finalist) and would like to sit for CMA in September. Is it manageable to sit for both parts in one sitting or do you advise giving one at a time. I believe I’ve above average understanding of all the concepts in both parts. But still need courage for giving both at once.
    Your reply shall be appreciated. Keep the hard work up.

    • Stephanie Ng says

      Hi Ali, thanks for your note! I am sure there were people doing both parts together and succeeded. I didn’t do it for CMA, but I took 4 parts of the CPA exam within two days (and passed). It all depends on your time commitment and your dedication, and some luck I guess :)
      Stephanie

  8. JACOB says

    Hi,

    I have completed MBA finance from USA, am in New Delhi. Interested in doing CMA can you please guide me how and were to start and what will be total fee.

  9. Sutej says

    Hi Stephanie,

    Am a BCom graduate from Bangalore university in India. I have checked on the url provided on 2013 handbook and my university is listed. I would like to understand what immediate steps do I need to satisfy Educational qualification to be eligible for CMA certification
    Really appreciate your help on this

  10. MAYANK CHOPRA says

    Hi Stephanie,

    I am a Chartered Accountant (India) & have undergone 3 years of training in the field of auditing, assurance & taxation. Further I have 3 years of experience post qualifying my Chartered Accountancy Degree.

    I want to ask will my above mentioned experience is valid to set off my 2 years experience requirement for CMA.

    Thanks in advance.

  11. Deepika says

    Hi Stephanie,

    I am a chartered accountant from India and have got 2 years post qualification experience.
    I am currently based out in Hongkong and facing the challenges to get a stable job in the required field. Thought to pursue CPA US but seems like 2012 have been a bad year for ppl like me as the US CPA rules changed drastically. But now when i saw CMA then just a question. If I qualify CMA then Can I get some credit hours in order to become eligible for CPA US Uniform exam.

    I cant afford to go for regular MBA here in hongkong its too way expensive and i just got married I am looking for something which doesnt hold me for a long. Can you suggest me some better options and ultimately CPA US.

    Eagerly waiting for your response. Do reply !!

    Regards,
    Deepika

    • Stephanie Ng says

      Hi Deepika,
      I hear you… CMA could be an option but to be honest, this qualification will likely be recognized only in big, US based corporations in Hong Kong. Also, CMA cannot be used to waive any requirement for CPA (only these statutory qualifications can: http://ipassthecpaexam.com/iqex/).

      If you can get hold of a HKICPA membership, then yes, there is a quick way to become a US CPA… but I would think that process takes even longer.

      You don’t need a US CPA qualification to work in Hong Kong. It might be hard with an Indian qualification, but talk to headhunters and see their suggestions. Can’t think of a quick way to find a job for you for now, but if I do I will drop a note here again. Best of luck! Stephanie

  12. Deepika says

    Hey Stephanie,

    Thanks a lot for your response. At least I got some clarity in a way that only degree will not make a differences. I am very much depressed at the moment so able to take wrong decision…I was thinking if not CPA then CMA or any other course. but Yeah…that not worth…

    If possible can you advice me some qualification which can help me improve my CV in terms of qualifications.

    I might be creating more work for you. Apologies for the same !!

    But will be thankful if you can give me a right path.

    Regards,
    Deepika

    • Stephanie Ng says

      Hi Deepika, can’t really think of a qualification at the moment. Is there a MRA between Indian CA and ACCA? ACCA is also well recognized in Hong Kong (not as good as it used to be, but good enough).

      Otherwise, I would just focus on getting started with any accounting job in Hong Kong. Work in smaller company first, then move on to bigger ones if preferred.

      Qualifications help but in my opinion, a good resume + good interview is equally if not more important in your case.

  13. Deepika says

    Sorry about this…But You know My cousin we both are of same age she also finished here bachelors with me from Delhi university, and joined Deloitte in Delhi, India. And she did her CPA than. I am curious to know how can she be eligible for CPA Exams if she also had the same qualification (Eradicating ICAI completely from my education) I remember she did that in 2009 2010. Can you please help me resolve this puzzle.

    regards,
    Deepika

    • Stephanie Ng says

      Hello Deepika, no problem, and it is an easy question for me to answer. The state boards made a lot of changes around 2012. Since then, Indian Charter accountancy and ACCA are no longer considered equivalent to a US bachelor degree. In other words, they see these qualifications as professional instead of educational. Stephanie

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