What Is a Certified Management Accountant (CMA)?
Let me explain what a Certified Management Accountant, or CMA, really is. It's an accounting designation that shows you've got solid expertise in financial accounting and strategic management. If you earn this, you're known as a CMA, and it opens doors to roles like financial controller or even chief financial officer (CFO).
Key Takeaways on CMAs
Here's what you need to know right away: the CMA designation means expertise in financial accounting and decision-making. It sets you up for a broad range of careers in accounting. Plus, as a CMA, you're bound by strict professional standards and have to pass a tough two-part exam.
How Certified Management Accountants (CMAs) Work
The CMA certification, issued by the Institute of Management Accountants (IMA), builds on your financial accounting skills by adding management abilities that help in making strategic business decisions using financial data.
You see, the reports and analyses CMAs prepare often go further than what's required by generally accepted accounting principles (GAAP). For instance, besides the standard GAAP financial statements, CMAs might create management reports that give specific insights for decision-makers, like performance metrics on departments, products, or employees.
Important Notes on CMA Certification
Keep in mind that unlike the certified public accountant (CPA) certification, the CMA isn't mandatory for many finance jobs. Just like CPAs or chartered financial analysts (CFAs), CMAs follow a strict code of ethics. To get the CMA, you need a bachelor's degree or related certification, plus two years of continuous work in the field. You'll also have to pass a rigorous exam that usually takes over 300 hours to prepare for. According to the Financial Industry Regulatory Authority (FINRA), you must maintain active membership in the IMA as well.
Real-World Example of a Certified Management Accountant (CMA)
Consider Dorothy, an entrepreneur running a small construction supply company. She gets a chance to bid on a big contract that would mean hiring a lot more employees. She's excited but worried about handling the financial reporting for that growth.
To tackle this, she hires Dennis, a CMA. Dennis earned his designation by passing a two-part exam on topics like budgeting, forecasting, performance management, cost measurement, and internal controls. During his interview, he explains how these skills will help Dorothy evaluate the costs and benefits of the project and manage new customer logistics.
With Dennis on board, Dorothy expands her team without losing control over costs and procedures. In fact, his expertise brings more transparency, letting her assess team performance and project profitability better. Looking ahead, Dennis's mix of accounting and management skills positions him well for executive roles, either with Dorothy or elsewhere.
Special Considerations for CMAs
You should know that CMAs and other accountants are in growing demand. From 2019 to 2029, accountant hiring is projected to increase by 4%. This growth will likely persist in management accounting because companies have a lot of freedom in how they set up their systems, without strict standardization.
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