I Pass The CMA Exam!

Understanding the CMA syllabus and Relative Difficulty of Each Section

CMA syllabusSaher is an 21-year-old Indian residing in Dubai. She took Part 1 and 2 back-to-back after passing her CFA level 1 in June.

25% of the hardship is complete if you just understand what the CMA syllabus is about. The perspective of the CMA syllabus is different if you have an accounting and finance background (in terms of both education and career).

I thought it would be helpful if I break it down for those planning to write the CMA exam.

While CMA stands for Certified “Management” Accountant, it is divided into 2 parts and involves more than just management accounting:

  • Part 1: Financial Reporting, Planning, Performance, and Control
  • Part 2: Financial Decision Making

CMA Exam Part 1

Although this is considered to be the tougher of the two, it is not as hard as it is portrayed to be. YES INDEED! But still, the portion is much harder to absorb.

If you don’t have the relevant background, this part can be quite the challenge.

A. External Financial Reporting Decisions (15%): Very Easy to Score

The section includes basics of accounting: Financial Statements, understanding the elements of financial statement, revenue recognition etc.

B. Planning, Budgeting, and Forecasting (30%): Common Knowledge / Theoretical

Basic budgeting concepts, types of budgets, hierarchy, timelines etc. Aim to score at least 25% in total (meaning more than 80% of this section).

C.Performance Management (20%): Less Scoring /  Multiple Concepts

Types of variances, calculating variances, balanced score card.

D. Cost Management (20%): Less Scoring / Multiple Concepts

Types of costs, costing methodologies, cost efficiencies, over heads, cost allocations, business improvements

E. Internal Controls (15%): Lowest weight yet most complex

Introduction to internal controls, types of controls, testing controls, IT controls etc.

CMA Exam Part 2

Part 2, on the other hand, is much easier to understand. If you have a background in accounting or finance (and especially finance), you can easily ace this exam.

If you have no background in a accounting/finance, the concepts are still easier to understand but there is a lot of Math involved.

A. Financial Statement Analysis (25%): High weighting; very easy to score with accounting background

Understanding financial statements, ratio analysis and profitability analysis.

B. Corporate Finance (20%): Multiple concepts, part theoretical part calculation based.

This topic is a big chunk in part 2 dealing with risk management of portfolio, basic corporate finance concepts like time value of money, intrinsic value, raising capital, risk and return relationships, corporate structures. etc.

If you have studied finance in college, you’ll find it easier to study and solve the questions.

C. Decision Analysis (20%): Most complex in Part 2

Cost/profit/volume analysis, pricing and margin setting methods . Focuses on operational efficiencies.

D. Risk Management (10%): Small topic, theoretical, scoring

There is only 1 chapter, focusing on types of risks and mitigating and prevention of risks.

E. Investment Decisions (15%): Calculation intensive

The classic Net Present Value and Internal Rate of Return in investment decision making.

F. Professional Ethics (10%): Theoretical, easy to score

Standards and principles of conduct, inducing ethical behaviour in organisations. Apart from memorising the standards and the principles, this is basic knowledge.

I hope this gives you more clarity and happy studying! 🙂

(Note: All of the above are simply opinions of the topics based on my experience. It may vary from person to person)

Note from Stephanie

Thanks for the analysis and especially your thoughts on their relative difficulty. I’d like to expand on internal control, a section you find the most complex in Part 1.

Internal control is heavily tested in the US CPA exam. This is a tricky area in that it could be very conceptual and subjective, as in there is no clear, black-and-white answer. You’ll have to pick the “best” answer out of the possibly, seemingly correct ones. this makes the questions very difficult.

There are lots of stats available in the CPA exam and I notice that Indian candidates are noticeably weaker in internal control. I have no idea why, but it could be that Indian companies use a different approach. If you are an Indian candidate, it’s worth spending more time tackling this section.


About the Author Saher M

Hey there, I am working in Dubai as Junior Associate in a management consultancy firm. I am a CFA level 2 candidate, and during the wait, I took and passed Part 1 and 2. I am now accumulating my experience to become a CMA.

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