Everything You Need to Know About the CMA Exam

Establish the foundation from which each examination will be developed.

Provide a basis for consistent coverage on each examination.

The goal of financial reporting is to provide information that is useful in making decisions. There is the technical aspect of acquiring and consolidating data, but CMAs are expected to go further and make use of the financial statements and their components. An understanding of integrated reporting (IR) is increasingly important.

The CMA is an international designation, so CMAs must be aware of the major differences in reporting under IFRS vs. GAAP and the impact each has on analysis. Many large corporations have growing presences internationally, so to advise these companies, CMAs should be able to function effectively in reporting environments across the globe.

CMAs should be able to use financial information to set long-term goals (as well as short-term goals that will help accomplish them) in service of their organization’s strategic plan or mission. This includes budgeting for proposed initiatives and forecasting how they will affect future revenues and expenditures.

CMAs need to be able to determine whether performance standards are being met with respect to operational goals. This includes topics such as standard costing, flexible budgets, variance analysis, the balanced scorecard, and more.

Being able to monitor and manage costs is crucial to goal setting and project management. As a CMA, you will need to be able to demonstrate an understanding of cost behavior, supply chain management, benchmarking, product market value, and more.

Designing internal controls and ensuring they are being maintained is vital for all decision makers. New projects and goals must comply with existing controls and fall into the organization’s existing risk strategy.

Added in 2020 to the CMA exam, this domain is a testament to how technological advancement is rapidly changing expectations of CMAs. As time passes, a CMA’s role is being defined as more of a data reporter and critical decision maker.

CMAs take the basic information reported in the financial statements and extrapolate data for use in decision-making. You will need to calculate and understand the uses of the current ratio, the quick (acid-test) ratio, the cash ratio, the cash flow ratio, and the net working capital ratio. Advanced accounting knowledge is a prerequisite to recommending or defending a course of action. You have to know how the numbers support your claims.

CMAs should know how to raise and work with capital. You will need to understand how organizations generate a return long term, how interest and exchange rates affect revenues over time, and how international diversification can offset the costs inherent to cross-border transactions.

CMAs need a firm understanding of product and production decisions. CMAs must employ cost-volume-profit and marginal analysis at an advanced level. The exam may ask you to calculate a break-even point, calculate the effect of operating income on a make-or-buy decision, evaluate and recommend pricing strategies, etc.

Risk assessment involving different types of systematic and unsystematic risks is integral because risks are a factor in every high-level business decision. An understanding of Enterprise Risk Management (ERM) is generally required, more specifically, COSO Enterprise Risk Management – Integrated Framework).

CMAs should understand capital budgeting with regard to investment decisions and be able to use the two main discounted cash flow (DCF) methods, net present value (NPV) and internal rate of return (IRR), to recommend project investments. This is an extension of the ideas established in Corporate Finance, but with an applied focus on investment decisions.

Underpinning all of this is the IMA’s focus on professional ethics, which may be tested in conjunction with any topic area.

Everyone is familiar with this type of question, and it’s the most common type on the CMA exam. You’ll either have to complete a sentence or be asked a straightforward question. You’ll have four single-statement answers to pick from.

These are questions that include negative phrasing, like except, not, least, etc. You’ll be given four options. Three of them will be correct, and you’ll have to choose the one that’s wrong. They can be tricky under a time crunch, but negative words should be bold.

The exam will pose a question stem giving you a list of numbered statements that are distinct from the answer choices. The answer choices will have you decide which of the statements answers the question. It could be one, multiple, or none. Candidates agree this is the most difficult type of question to answer, so we’ve created a video to help.

These are actually almost the same as questions with two or three answer options, but their presentation makes them visually distinct. Rather than a list of numbered statements, your answer choices will have columns.

These different kinds of questions will challenge you to think about the CMA subject matter in different ways. But if you master the material, you’ll be able to find the right answer no matter how the question is posed.

With 100 questions on both parts of the CMA exam, spending an average of 1.5 minutes per question will leave you 30 minutes before you have to move onto the essays. This will allow you to spend a few minutes reviewing any flagged questions and any extra time will roll over to the CMA essay section.

We suggest you limit your review to 15 minutes. This will leave you 15 minutes to carry over to your essay questions.

Don’t wait until your exam day to try to limit the time you spend on a question. You need to practice under similar conditions.

•   Set a timer for 30 minutes and take a 20-question quiz.
•   When the timer goes off, review your progress and quiz score.

This is especially valuable on cumulative quizzes because it will ensure you’re used to quickly recalling information from different sources.

Time is your most valuable resource on the CMA exam, so don’t let any go to waste. Spending an extra 10 or 15 minutes proofreading your essay or adding extra details can earn you valuable points.

Since the CMA exam displays all of your time in one large countdown, it is important to set benchmarks for your progress to make sure you’re staying on track. Writing down what time (according to the countdown) you should be at after every 20 questions is a great way to monitor your progress.

You will have two essay scenarios on the CMA exam, but each scenario will have multiple questions. Resist the urge to allocate more time to the essay with more questions. These essays have been designed to take 30 minutes each to answer, so a scenario with fewer questions will likely require more detail or calculations than one with many shorter questions.

You will have 1 hour to complete both essays, at minimum. Any time not used during the multiple-choice section will be added to this hour. In addition, you will be able to freely travel between the two essay scenarios (but you cannot return to the MCQ section).