By Rodney Diaz,2014-05-15 15:14
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    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

    Part Four.

    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