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CMA Exam Part 2: Certified Management Accountant Exam Part


cma exam part 2

There are two parts to the Certified Management Accountant (CMA) exam: Part 1 and Part 2. Each part addresses a different assortment of topics in order to provide an objective measure of your management accounting knowledge and skills. To pass the exam, you have to be well acquainted with each part. Learn about CMA exam Part 1, then use this information to help you master CMA exam Part 2.


CMA Part 2 Syllabus

CMA Part 2: Financial Decision Making

Content Area Coverage Percentage Coverage Level
A. Financial Statement Analysis 25% Level C
B. Corporate Finance 20% Level C
C. Decision Analysis 20% Level C
D. Risk Management 10% Level C
E. Investment Decisions 15% Level C
F. Professional Ethics 10% Level C

As this table shows, Part 2 of the CMA exam is called Financial Decision Making and has six content areas.

The Institute of Certified Management Accountants (ICMA) produces the CMA exam and reveals the information covered by each exam part in the content specification outlines (CSOs). The CSOs serve to

  • Lay the foundation for the development of each exam part,
  • Ensure each part has consistent coverage,
  • Communicate the details of the exam content to interested parties,
  • Help candidates prepare for the exam, and
  • Equip review providers with information for their courses.

Within the CSOs, a coverage percentage appears next to each exam part topic as a representation of that topic’s relative weight. The CSOs also assign a coverage level to each exam topic, ranging from an introductory knowledge to a thorough understanding of the subject matter. The three levels of coverage are:

  1. Level A: Requiring the skill levels of knowledge and comprehension.
  2. Level B: Requiring the skill levels of knowledge, comprehension, application, and analysis.
  3. Level C: Requiring the skill levels of knowledge, comprehension, application, analysis, synthesis, and evaluation.

The coverage levels build on each other, so Level C may contain the requirements of Level A and Level B.

The CSOs don’t tell you the order or the frequency of the topics on the exam.

CMA Part 2 Topics

Part 2 focuses on financial decision making. In the CMA Handbook, the Institute of Management Accountants (IMA), the worldwide association of accountants and financial professionals in business that offers the CMA certification, summarizes the CMA Part 2 content areas and topics.

  1. Financial Statement Analysis
    1. Calculation and interpretation of financial ratios
    2. Performance evaluation utilizing multiple ratios
    3. Market value vs. book value
    4. Profitability analysis
    5. Analytical issues including
      1. Impact of foreign operations
      2. Effects of changing prices and inflation
      3. Off-balance sheet financing
      4. Earnings quality

You also must be informed about special issues such as foreign currency fluctuations, fair value accounting, and US GAAP vs IFRS.

The coverage of this section is similar to that of Section A in Part 1, which discusses financial accounting, but the focus is more on analysis and comparison using key financial data and ratios. In other words, Part 1 Section A requires you to understand past performance using financial statements, while Part 2 Section A involves evaluating future prospects.

  1. Corporate Finance
    1. Types of risk including:
      1. Credit
      2. Foreign exchange
      3. Interest rate
      4. Market
      5. Political instruments for long-term financing
    2. Initial and secondary public offerings
    3. Dividend policy
    4. Cost of capital
    5. Working financial management
    6. Raising capital
    7. Managing and financing working capital
    8. Mergers and acquisitions
    9. International finance

To do well with this section, you must understand short-term and long-term financial management as well as the benefits and limitations of major financial instruments.

You will see a mix of conceptual and computational questions. The variety of questions can be very broad, but the calculations are likely quite basic.

  1. Decision Analysis
    1. Relevant data concepts
    2. Cost-volume-profit analysis
    3. Marginal analysis
    4. Make vs. buy decisions
    5. Income tax implications for operational decision analysis
    6. Pricing methodologies including:
      1. Comparable
      2. Cost-based
      3. Value-based

In this section, you will be tested on how management accountants provide data and perform analysis for the decision-making process.

Risk management is also part of decision analysis, but we will go through this topic in Section D.

  1. Risk Management
    1. Types of risk including:
      1. Business
      2. Hazard
      3. Financial
      4. Operational
      5. Strategic
      6. Legal compliance
      7. Political
    2. Risk mitigation
    3. Risk management
    4. Risk analysis
    5. ERM (enterprise risk management)

Organizational managers need to identify, assess, and respond to risks in order for the organization to achieve its goal. The CMA exam Part 2 concentrates on the ERM model. You are most likely to get conceptual questions in this section.

  1. Investment Decisions
    1. Cash flow estimates
    2. Discounted cash flow concepts
    3. Net present value
    4. Internal rate of return
    5. Discounted payback
    6. Payback
    7. Income tax implications for investment decisions
    8. Risk analysis
    9. Real options

This section covers how management accountants help make important decisions about whether to proceed with an investment or choose between investment alternatives.

  1. Professional Ethics
    1. Ethical considerations for management accounting professionals and for the organization

The content of this section is based on the IMA Statement of Ethical Standards. The principles and standards are concise and easy to understand. Candidates should memorize the names of the four standards, and more importantly, know how they are applied in real business situations.

CMA Exam Part 2 Format

Each CMA exam part contains a specific number of two types of questions:

  • 100 Multiple-choice questions (MCQs)
  • 2 Essay questions

You’ll have four hours of total testing time for each exam part, and your time will be divided like this:

  • 3 hours for the MCQs
  • 1 hour for the essays

You will only be eligible to move on to the essay section if you answer at least 50% of the MCQs correctly. If you are eligible, the exam will send you on to the essays once you’ve answered all of the MCQs or after 3 hours have passed, whichever comes first. You can’t go back to the MCQ section once you leave it: you have to remain in the essay section.

In the essay section, you read two scenarios describing a typical business situation and complete 8-10 written response or calculation questions based on these scenarios.

CMA Part 2 Questions

The CMA exam MCQs have three parts:

  1. The question stem: includes the question, necessary details for answering the question, and sometimes, irrelevant information as well.
  2. The correct answer choice: responds to the question stem better than any of the other answer options.
  3. The 3 distractors: appear to be correct at first glance but are actually incorrect.

Along with the more common, straightforward MCQ question, you’ll see a few other types of MCQs on each exam part:

  • Negative question stem: demonstrates that the correct answer choice is an exception by using words like “not,” “least, “false,” and “except”.
  • Combination of correct answers: asks which of three to four numbered statements are correct by providing answer choices with different combinations of the statement numbers.
  • Multiple variables: asks candidates to select the answer choice comprising all the correct variables presented in multiple columns of variables.

CMA Part 2 Essay Questions

Part 2 of the CMA exam expects you to respond to two essay scenarios by answering about 3-5 questions. To answer the questions, you may have to write a few paragraphs or perform a calculation.

Subject matter experts grade the CMA exam essays and award partial credit when merited. Because there is the opportunity for partial credit, you should always write as much as you can about the topic when answering a conceptual essay question, as this process will help you maximize your points. For that same reason, you should show your work when completing computational questions. An example of getting partial credit would be receiving points for using the correct formula even if you made a mathematical error.

When making a chart or table, keep the formatting simple and the information organized clearly.

CMA Part 2 Pass Rate

The historical pass rate of CMA Exam Part 2 is around 35%.

CMA Exam Pass Rates

2013* 2014* 2015* 2016* 2017*
Part 2 42% 49% 55% 50% 50%

Because CMA exam Part 2 boasts higher pass rates than Part 1, it looks like Part 2 is easier. However, the reason for Part 2’s higher pass rate could be that most candidates take Part 1 before Part 2, so they are typically more prepared when they reach the second part of the exam. However, as neither part consistently presents a pass rate higher than 50%, there’s no doubt that the CMA exam, on the whole, is quite challenging.

CMA Part 2 Passing Score and Grading Process

To pass either exam part, you must achieve a score of 360. The CMA exam scores are scaled and range from 0 to 500. The ICMA transforms your raw score (the number of questions you got right) to a scaled score so that no matter which test form you take, the ICMA can report the scores with uniformity and consistency.

The CMA exam essays are graded offline in a long and laborious process, so you won’t receive your CMA Part 1 exam results of pass or fail immediately. In order to achieve consistent, accurate, and fair grading, the ICMA grades all of the CMA exams taken within a testing window at the same time and performs sample grading first to ensure that every solution has been accounted for. Reviewers check the grades throughout the grading process and, once the grading is complete, conduct an additional review of exams on the border of passing.

The ICMA calculates your final score by adding the score of the MCQ section to the score of the essay section. Your score for the entire part will be scaled to reflect the total weighted score of pass/fail. You don’t have to pass both sections; your total score determines your pass/fail status.

You should receive your exam results about 6 weeks from the end of the month in which you tested. They will be emailed to you and posted to your online profile. If you failed an exam part, Prometric will email you a Performance Report about 14 days after your results show up in your candidate profile. Your Performance Report will label your performance for each of the key topic areas in the MCQ section as either satisfactory, marginal, or unsatisfactory. You’ll also see your overall performance on the essays.

CMA Part 2 Study Time

You can sit for both Part 1 and Part 2 of the CMA exam at one of Prometric testing centers around the world. You can only take an exam part during these three testing windows:

  1. January/February
  2. May/June
  3. September/October

Various CMA exam industry voices have suggested different amounts of study time for Part 2.

CMA Exam Part 2 Study Time

IMA Gleim Wiley Hock My Recommendation
Part 2 150-170 100 90 150 60 minimum / 120 maximum

My minimum CMA exam study time recommendation for Part 2 is based on how much time you’ll need to complete these specific activities within the Gleim CMA Review System:

  • Complete the diagnostic quizzes
  • Read the textbook
  • Answer the True/False questions
  • Watch the Gleim Instruct videos
  • Take the MCQ practice quizzes
  • Complete one practice exam

My maximum recommendation also includes answering all of the practice quizzes in the test bank and reviewing the answer explanations for your incorrect answers.

The biggest factor affecting how much time you’ll need to study for the CMA exam is your level of familiarity with the material at the start of your review. But no matter how much you know at the beginning of your studies, you must still resolve to study for as long as it takes to reach the cognitive levels at which the exam tests.

If you’re already fairly confident with several of the Part 2 topics, you can probably base your study schedule off the minimum amount of time I recommend. If a good portion of the CMA exam material is new to you, you should plan to study for my suggested maximum amount of study time. To reach these study time marks, you’ll need to study for this many weeks and hours per week:

CMA Exam Part 2 Study Schedule

Total Hours Number of Weeks Number of Hours Per Week Number of Hours Per Day
Minimum 60 6 10 ~1 ½
Maximum 120 12 10 ~1 ½

CMA Part 2 Study Plan

Make your CMA Part 2 study plan by following these steps:

  1. Evaluate your current weekly schedule to identify the number of study hours you have available each week.
    1. Lay out a general timeline of your week covering all your weekly activities and the amount of time each takes.
    2. Tally up all your free hours to ensure it’s enough to accommodate your CMA exam studies.
    3. To acquire more study time, determine the activities you can remove or reduce until you’re done with the CMA exam.
  2. Decide to study for 1-2 hours a day.
    1. Complete a few short study sessions or one longer study session a day.
    2. Study when most convenient for your mind and body (you want to feel awake, alert, and comfortable).
    3. Rely on your study planner to stay on track.
  3. Schedule your exam date.
    1. Once you know how many weeks you’ll require to be completely prepared, determine which CMA testing window you will be able to test in.
    2. Contact Prometric (either via their 800 number or website) as soon as possible to secure your preferred test date.
    3. Pick two or three equally ideal test dates in case of unavailability.

CMA Part 2 Practice Questions

If you’re looking for free CMA Part 2 practice questions, you’ll find them in a number of places.

  • Free CMA Exam Questions from Gleim
  • Free CMA Exam Review Pop Quiz from Wiley

You can also access my FREE CMA mini-course to start your CMA exam preparations.

CMA Part 2 Syllabus Overlap with Other Professional Exams

If you’ve already taken a different professional accounting exam or are planning to take another after the CMA exam in the future, I’ve got good news for you: There is quite a bit of content overlap among the CMA exam and these accounting and finance exams.

CFA Exam

There is some overlap in Section A (Financial Analysis) with the CFA FRA section as well as with the entire section on corporate finance. There is also a lot of coverage on Ethics in CFA Level 1. The Codes and Standards are different, but the underlying concepts as well as how the questions are formatted are quite similar.

CPA Exam

It’s hard to match the syllabus overlap by section, but you’ll see quite a few FAR and BEC questions in CMA Part 2. You’ll definitely have an advantage if you’ve taken these two exams recently.

CIA Exam

Unlike CMA Part 1, Part 2 has little overlap with the Internal Auditor exam except that it also covers professional ethics.

How to Pass CMA Exam Part 2

If you’ve already passed Part 1, you can take a day or two to relax, but you should get back into studying shortly thereafter so you stay in study mode. Remember, you’ve already done this, so you understand the testing layouts and types of questions you’ll see. Use this information to establish your study priorities and apply the best habits for studying effectively. If you’re starting with Part 2, finalize your study plan and dive right in so you can pass efficiently.

You’ll need to know many different financial ratios to pass Part 2. I suggest you memorize the formulas of all the key ratios and get very familiar with the analytical tools as well. You can make flashcards to help you accomplish this. In each flashcard, write down the formula and any important analysis information. You’ll also need to know the applications and understand how external investors use them to evaluate the company’s financial health.

Finally, you can prepare for Part 2 success by applying some of the portfolio management concepts to your personal investments in a spreadsheet. This practice will give you a better understanding of the concepts and ratios.

Above all, you must commit to the exam, pick the right review course, and study with a strong strategy. Taking these steps gives you a much better opportunity to pass.

Best of luck on your exam!

CMA Part 2 Tips from My Bloggers

Gavin Gleim CMA customer Waqar Gleim CMA customer
Gavin’s Part 2 hacks  Waqar comparing
Part 2 with Part 1

Video Summary of CMA Exam Part 2

Here is a video summary of CMA exam Part 2 for those who prefer to learn visually.

Reference Reading

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About the Author Stephanie Ng

I am the author of How to Pass The CPA Exam (published by Wiley) and the publisher of this and several accounting professional exam prep sites.

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  • Ram says:

    Dear Steaphanie, I am one of the followers of your site, Over the period, you have improved the site and contents. Kudos to you and your team. Just want your guidance; I have started CMA 2013; Out of touch in 2014. How to proceed now? Regards, Ram

  • Dalia says:

    Dear Stephanie ,

    Please I need to take CMA certification to improve my career bath, how can you help me I will start study CMA part 2 self study, is there any way to help me.

  • farida says:

    I am new to this blog.I want to appear for my cma exam part two in next test window i.e in june.I want to know about preparation .Can you help me out?I am from middle east area.

  • Rob says:

    Hi Stephanie,
    For the exam, will we get an annuity table or will we need to rely on our financial calculator for PV calc’s etc.?

  • Rob says:

    Hi Stephanie,
    Quick Question,
    I am going through some of the MCQs that are available under the gleim system (part 2) and I am noticing that most questions (90%) are from the textbook information but there are around 10% of them that are very detailed that you can’t find in the text. Is that by design? or will we have major surprises on the real exam from that of the gleim tests? or was this just an anomaly and gleim information very much mirrors the real thing?

    • Stephanie Ng says:

      Hi Rob, we can never tell, but Gleim has some questions that look out-of-the-blue because they could be mixing questions from other professional exams, e.g. from CPA and CIA. Some students skip them, but I recommend not, because they are there for a purpose. One of them is to train you think on your feet. No review courses can cover everything that could be out for the actual exam, so by getting some really hard questions, you get used to it, at least mentally 🙂 That’s how I see it anyway. If you go through the comment section I believe some other readers raise this point as well. Cheers, Stephanie

  • katamba lsmail says:

    Hello am katamba in Uganda. I want to offer CMA, hope with how I can access it online

    • Stephanie Ng says:

      Hi Katamba, you can certainly study online (as long as your internet connection is fast enough). For the actual exam, you have to take it at an exam center. There should be one in or near Uganda. Regards, Stephanie

  • Neha says:

    I have the gleim 2015 edition cma review book. Will that suffice for 2016 cma exams?

  • Rami says:

    Dear Stephanie,

    First of all, thanks for such a great website! It’s become my go to guide for anything related to the CMA. I just have two small questions I hope you can help me with..I’ve only recently decided to go forward with studying for the CMA and bought the Gleim books with the online Test Prep. That being said:
    1. Starting studying in January 2016, do you think its possible to pass the exam in the February testing window (probably end of Feb), which is basically 2 months?
    2. Is studying only the Gleim books enough to pass? As going through the books I noticed the text seems quite direct and short and didn’t involve a lot of explanations and analysis.

    Looking forward to hearing from you and many thanks in advance!

    • Stephanie Ng says:

      Hi Rami, glad to hear you’ve made the decision to go for the CMA! Happy to know you like my site. If you able to study and work on the practice questions for ~150 hours within 2 months, then yes, should be fine.

      For most candidates, Gleim is sufficient. There are a lot of explanations in the multiple choice answers. There used to be criticism on how dense the Gleim book was, so they streamlined it and made them shorter and more direct. There are also not that many examples. But you can certain take any of the multiple choice questions as example. As far as I know, this new format works and sells much better. Regards, Stephanie

  • Latif says:

    Thank you Stephanie for this great information. I hold MS in finance, and I would like to start with CMA part 2 and then part 1. I am not sure whether this is possible or not.

  • Rob says:

    Hi Stephanie,
    I wanted to say I passed part 2 exam.
    Remember I thought it was long… I wanted to thank you for your help.
    I am working on part 1 now… how do you recommend I prepare for that one?

  • Rami says:

    Hey Stephanie,

    Just want to ask whether its enough if I only solve multiple choice questions in the Test Prep question bank, because it turns out the books I bought only have the question bank for the multiple choice questions and not the practice essay questions!! Sent Gleim an email and they said I’d have to pay an addition $150 for each part to get the Essay bank, so that kind of sucks…so not sure if its worth the investment now. Do you think I would really need it to pass or is it enough if I just practice on the multiple choice questions?

    Thanks a lot.


    • Stephanie Ng says:

      Hi Rami, do you have the mock exam? If you have at least one chance to see how the essay questions may look at, it is not a must to get them in my opinion. Most people find the essays more straight-forward. You can take a few classic multiple choice questions and turn them into essay questions, and write down (or better, type on computer) and see how well you do in a timed environment. If you pick a few questions from each study until, you will be well prepared. Good luck! Stephanie

      Here is my page on essay question for your info: https://ipassthecmaexam.com/cma-exam-essay-prep/

      • Rami says:

        Hi Stephanie. Well I think I should have the mock exam, not sure. It just turned out that I only have access to the normal Test Prep without the essays with the books that I bought…let’s hope it’s enough! Can’t stand studying anymore, really want to get over with it!

        Thanks again :))

  • Kouser says:

    hi Stephanie
    I am new here in your blog.I am planning to go for a qualification like CMA or ACCA. I am confused which one I should choose.which one will give me much return.and how much these courses will cost?

  • Balaji says:

    I am very impressed with your info’s. I am very eager to do cma. So guide me without any dealy what are the steps I should follow. Dear sir if you are not help me out in this regard I will take any decision and I may spend money irrelevantly. Please guide me I am believing more Thanks in Advance

  • faizan says:

    HI, how are you ? i want to ask you that i have done my MBA finance now i want to do CMA , so it will be helpful for my future ? The second thing is how many courses will be exempt after MBA.
    i will be waiting fot your positive response thanks………………

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