The Certified Management Accountant (CMA) exam has two parts: 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 must be well acquainted with each part. Learn about CMA exam Part 1, then use this information to help you master CMA exam Part 2.
|A. Financial Statement Analysis
|B. Corporate Finance
|C. Decision Analysis
|D. Risk Management
|E. Investment Decisions
|F. Professional Ethics
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
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 introductory knowledge to a thorough understanding of the subject matter. The three levels of coverage are:
The coverage levels build on each other so that 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.
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 that offers the CMA certification, summarizes the CMA Part 2 content areas and topics.
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.
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.
This section will test you on how management accountants provide data and perform analysis for the decision-making process.
Decision analysis also includes risk management, but we will go through this topic in Section D.
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.
This section covers how management accountants help make important decisions about whether to proceed with an investment or choose between investment alternatives.
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.
Each CMA exam part contains a specific number of 2 types of questions:
You’ll have 4 hours of total testing time for each exam part, and your time will be divided like this:
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 responses or calculation questions based on these scenarios.
The CMA exam MCQs have three parts:
Along with the more common, straightforward MCQ question, you’ll see a few other types of MCQs on each exam part:
Part 2 of the CMA exam expects you to respond to 2 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.
The historical pass rate of CMA Exam Part 2 is around 35-45%.
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.
(The IMA hasn’t released the CMA pass rates for 2021 or 2022.)
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 ICMA grades the CMA exam essays offline in a long and laborious process, so you won’t receive your CMA Part 1 exam results of a 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.
You can sit for both Part 1 and Part 2 of the CMA exam at one of the Prometric testing centers around the world. You can only take an exam part during these three testing windows:
Various CMA exam industry voices have suggested different amounts of study time for Part 2.
|60 minimum / 120 maximum
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 on 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:
|Number of Weeks
|Number of Hours Per Week
|Approximate Number of Hours Per Day
Make your CMA Part 2 study plan by following these steps:
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 between the CMA exam and these accounting and finance exams.
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.
It’s hard to match the syllabus overlap by section, but you’ll see quite a few Financial Accounting and Reporting (FAR) and Business Environment and Concepts (BEC) questions in CMA Part 2. You’ll definitely have an advantage if you’ve taken these 2 exams recently.
Unlike CMA Part 1, Part 2 has little overlap with the Internal Auditor exam except that it also covers professional ethics.
If you’ve already passed Part 1, you can take a day or 2 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.
Now that you know so much about CMA exam Part 2, you’re well on your way to passing it. But, to give yourself the best chance of achieving complete CMA exam success, you should also rely on the right CMA review course for you. You can use my comparison of the CMA review courses available to discover which course you need. Then, you can use my exclusive CMA review discounts to save big on the best CMA exam study materials.
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.