Certified Management Accountant (CMA)

Definition

A Certified Management Accountant (CMA) is a professional designation in the field of management accounting and financial management. It signifies that the individual has expertise in strategic management and financial accounting. This certification is issued by the Institute of Management Accountants and requires passing a rigorous exam, having work experience and continuous professional education.

Phonetic

The phonetic pronunciation for “Certified Management Accountant (CMA)” is:Sər-ˈtī-fīd ˈma-nij-mənt ə-ˈkoun-tənt (C-M-A)

Key Takeaways

Recognition in Management Accounting: The Certified Management Accountant (CMA) certification offers global recognition as it validates an individual’s expertise in areas of managerial accounting, and financial management. This value is essential in prospective global roles within the realm of finance and accounting.
Knowledge and Skill Enhancement: The CMA certification ensures that you have a comprehensive understanding of cost management, internal controls, analysis, and decision-making support. This advanced knowledge helps in further enhancing the skills, ensuring long-term career growth.
Attractive Salary Prospects: The salary prospects for individuals with CMA certification are significantly higher as compared to those without it. The certification not only opens up a variety of job opportunities but also adds financial incentives to those jobs.

Importance

The Certified Management Accountant (CMA) is a crucial business/finance term as it refers to a professional designation signifying expertise in strategic management and financial accounting. The importance of CMAs in a business landscape revolves around their ability to combine accounting skills with strategic business management abilities. They analyze the financial status of a company, prepare and manage financial data, and aid in strategic decision-making. This makes them integral to businesses’ financial health. CMAs are globally recognized, enhancing the professional’s prospects, credibility, and earning capacity. Moreover, they are expected to adhere to standards of professional conduct, contributing positively to the profession’s reputation and a business’s credibility.

Explanation

A Certified Management Accountant (CMA) is a professional credential that signifies expertise in financial management and strategic management. Individuals who earn this certification are recognised as having specialized knowledge in the use of financial, strategic and operational information to drive and influence the strategic decision-making in an organization. It demonstrates the professional’s ability to manage internal business processes, making strategic financing and risk management decisions, formulating strategic planning and analysis, maintaining high-end financial management capabilities and providing a strategic perspective to executive leadership. Moreover, the CMA is used for jobs that require expertise in financial planning, analysis, control, decision support, professional ethics, and more. Companies across the globe acknowledge the value that CMAs bring to their business – they can apply their skills to a multitude of roles such as financial controller, finance manager, financial analyst, and even CFO or CEO. In recent years, the demand for CMAs has increased notably given their skills to navigate complex business landscapes, contribute to effective strategic management and their commitment to professional ethics.

Examples

1. Seville Corporation: Seville Corporation is a multinational company specialized in the manufacturing of electronic appliances. They employ several CMAs as part of their finance and accounting team. They use their expertise in management accounting to analyze costs of production, create relevant financial reports, and assist in strategic decision making that leads to better business performance. 2. Anderson Consulting Firm: This is a finance-focused consulting firm that often hires CMAs. These CMAs work with a range of clients, often small businesses, to streamline their accounting processes, provide in-depth financial analysis, and implement financial management strategies. Their services are particularly beneficial to businesses seeking to minimize costs and optimize profits. 3. Hudson Retail Group: A large retail chain with hundreds of stores nationwide, the Hudson Retail Group has a dedicated team of CMAs within their corporate structure. These CMAs contribute to the financial planning and strategy of the company, including budgeting, performance evaluation, and cost management. They also play a key role in assessing the financial implications of expansion strategies, such as opening new stores or launching new product lines.

Frequently Asked Questions(FAQ)

What is a Certified Management Accountant (CMA)?

A Certified Management Accountant (CMA) is a globally recognized professional accreditation that designates mastery in management accounting and financial strategy. It is awarded by the Institute of Management Accountants (IMA).

What does a CMA do?

A CMA is involved in strategic decision-making, financial management, performance management, and risk management within an organization. They provide financial analysis and guidance, help to strategize, create business plans, and participate in executive-level decisions.

How can one become a CMA?

To become a CMA, a candidate must pass the CMA exams administered by the IMA, hold a bachelor’s degree from an accredited college or university, have at least two continuous years of professional experience in management accounting or financial management, and adhere to IMA’s Statement of Ethical Professional Practice.

Are there any prerequisites before you can take the CMA exam?

Yes, you must have a bachelor’s degree from an accredited institution, two years of professional experience in management accounting or finance, and maintain membership with the IMA.

How long does the CMA certification last?

The CMA certification does not expire, but CMAs must earn 30 hours of continuing professional education (CPE), including two hours in ethics, each year to maintain their certification.

Is the CMA a global certification?

Yes, the CMA is a global certification, recognized around the world. Moreover, the program is the same wherever you take it.

How does a CMA differ from a CPA (Certified Public Accountant)?

While both CMAs and CPAs are involved in accounting, their areas of focus differ. A CMA typically works within a company, focusing on business strategy, financial analysis, and management, while a CPA is involved in auditing, taxation, reporting, and regulatory compliance, often working with external clients.

What job opportunities are available to a CMA?

A CMA can hold various job positions such as Financial Analyst, Financial Risk Manager, Financial Controller, Chief Financial Officer, Cost Accountant, Corporate Controller, and more.

Can CMA certification help increase my earning potential?

Yes, having a CMA certification often leads to a higher salary as compared to non-certified peers. According to IMA’s salary survey, CMAs globally earn 57% more in median compensation than their non-CMA peers.

Related Finance Terms

Management Accounting
Financial Reporting
Cost Management
Internal Controls
Performance Management

Sources for More Information

- IMA
- Accounting.com
- Finra
- Investopedia

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