CERTIFIED MANAGEMENT ACCOUNTANT:
CREDENTIAL FOR SUCCESS
Neal R. VanZante
Professor of Accounting
Kendra S. Huff
Assistant Professor of Accounting
Texas A&M University-Kingsville
In his paper titled “Certified Management Accountant: Credential for Success,”
presented at the 1996 conference of the American Academy of Accounting and Finance,
VanZante compared the purposes of and contents of the CPA and CMA Examinations
and concluded that the CMA Examination should be considered the relevant
“credentialing” examination for most accounting positions.
VanZante noted that the major purpose of the CPA Examination, which had been substantially revised two years earlier, was to license public accountants and that it focused on knowledge and skills that CPAs need to have early in their careers. The focus of the CMA Examination was to measure an individual’s knowledge and skills required for a successful career. VanZante also pointed out that the 150-hour educational movement provided an opportunity for many accounting students to take courses to help improve their analytical and communication skills – the very skills important for
successful completion of the CMA Examination.
The 1996 paper ended with recommendations that the Institute of Management Accountant’s (IMA) new Director of Academic Development should emphasize the greater relevance of the CMA Examination, but noted that the CMA Examination and CPA Examinations should be considered complementary rather than competitive alternatives. VanZante stated that obtaining knowledge consistent with pursuit of the CMA designation should benefit all accounting students throughout their careers regardless of their particular choice of positions.
Recently, the IMA has conducted in-depth studies that resulted in major changes to the CMA examination. In addition to changes in the examination structure and content, the CMA examination designed to test material that has been determined to be most relevant to the career needs of those individuals who aspire to become CMAs. Beginning July 1, 2004 a new CMA Examination was offered. Between July 1, 2004 and December 31, 2007 both the current and new CMA examinations will be administered. The content of the CMA exam was reorganized and minimally updated to reflect relevant business practices. Other changes since the 1996 paper include the major revision and
computerization of the CPA examination in 2004 and the continued growth of the
150-hour educational requirement.
This paper begins with brief descriptions of the new CPA and CMA
examinations. Then, discussion turns to the relevance of the CMA examination for
successful career opportunities. Next, sources of detailed information about the new
examinations are then identified. Concluding remarks suggest that the CPA and
CMA Examinations should still be considered complementary, rather than
competitive alternatives, but that the CMA is still the credential for success.
The New CPA Examination
Effective in April 2004, a new computerized CPA Examination was offered at
Prometric testing centers nationwide. In addition to testing new material, the new CPA
Examination allows for testing of critical skills in a realistic setting through the use of
“simulations.” The focus of the CPA examination is "on the knowledge and skills that
new CPAs in public accounting need to have early in their careers to protect the public"
(AICPA, 1993, p. 2). The American Institute of Certified Public Accountants (AICPA,
2002)reaffirmed this emphasis on entry-level skills. The Board of Examiners of the
AICPA provides content specifications of the CPA examination in order to "alert
accounting educators about the knowledge and skills candidates will need to prepare for
the practice of public accounting" (AICPA, 1993, p. 1).
The CPA Examination now consists of 80% multiple-choice questions on each
of its four parts. The remaining 20% of each part consists of “simulations.” However,
the new Business Environment & Concepts (BEC) section will be 100%
multiple-choice questions until “simulations” are developed.
Most of the subject matter contained in the BEC section had not been previously tested. New subject matter tests the candidate’s understanding of
economic concepts, information technology, and general business measurement. This
new material was added because of a growing recognition that an understanding of
the business environment is a key factor in applying the audit risk model.
The AICPA describes simulations as an assessment of knowledge and skills in a context approximating that found on the job. Some of these simulations involve research
activity, such as searching authoritative literature and the Internal Revenue Code. Other simulations require candidates to access work papers or other published materials. The
simulations require candidates to have basic computer skills, knowledge of common
spreadsheet and word processing functions, the ability to use a financial calculator or a
spreadsheet to perform standard financial calculations, and the ability to use electronic
tools such as databases (AICPA, 2002).
The New CMA Examination
Effective in July 2004, a new CMA examination was offered. The content of the
CMA exam was reorganized and minimally updated to reflect relevant business
practices. The majority of examination content requires candidates to demonstrate
their analytical, synthesis, and evaluation skills. To this end, examination content
specifications include the “level” of coverage as follows: (A) skills of knowledge and
comprehension, (B) skills of application and analysis as well as knowledge and
comprehension, and (C) skills of synthesis and evaluation in addition to the first four
skills identified in B. Level A topics represent just over 10% of examination time
while over half of examination time requires candidates to demonstrate Level C skills.
The CMA Examination was revised to group skills and abilities that a
managerial finance or accounting professional uses in analyzing, managing, and
evaluating business solutions, rather than reflecting the academic silos in which the skills are initially learned (IMA, 2004).
Three of the four parts of the new Examination consists of objective format
questions. The fourth part consists of business-oriented essays and problems. CMA
candidates are required to complete the first three parts before sitting for the new “capstone” examination part. According to the IMA (2004) the new Part Four
facilitates more effective testing of higher-level skills of evaluation, critical thinking,
and judgment. All of the topics in the first three examination parts may be included in the new Part Four (requiring application of knowledge to business-oriented
situations) while organization management, organization communication, behavior
issues, and ethics is exclusive to
Relevance of CMA Examination
While changes have been made in examination content to recognize developments in accounting and business, the basic character of the CMA
examination has remained as established by the IMA in 1972. The CMA examination
has continued to cover the technical accounting and business body of knowledge
needed by management accountants to contribute to the success of their organization
and has incorporated ethics as an important part of each examination.
“Perspectives on Education for Success in the Accounting Profession” (Big 8
Accounting Firms White Paper, 1989) voiced major concerns about the preparation of