Someone contemplating the multitudes of career paths a degree in accounting opens may wonder how to become a certified management accountant. Much like the more widely recognized certified public account designation, the title of certified management accountant is a respected credential conferred on accounting professionals who demonstrate their mastery of their field by meeting strict standards of education and experience and passing a comprehensive examination.
What is Management Accounting?
Management accounting incorporates accounting, business management and finance. Management accountants monitor a business’ financial health by establishing financial controls, conducting internal audits and overseeing spending. They also assess risk, determine the potential financial repercussions of business decisions, advise managers about possible financial consequences, aid in the development of appropriate business strategies and protect the stockholders’ interests by ensuring the company maintains its financial integrity. The Institute of Management Accountants, a global association that has more than 70,000 members around the world, and the organization behind the certified management accounting credential, says that 80 percent of financial professionals and accountants work inside businesses.
What is Required to Become a Certified Management Accountant?
Established in 1996, the certified management accountant designation is the premiere credential in management accounting. Candidates must be members of the Institute of Management Accountants, hold a bachelor’s degree from an accredited college or university and possess a minimum of two uninterrupted years of professional experience in financial management or accounting. In addition, they must enter the institute’s Certified Management Accountant Program, and then demonstrate their understanding of management accounting by passing an exam. To maintain their status as certified management accountants, professionals must continue to pay their annual membership and complete 30 hours of continuing education every two years.
What is Involved in the Certified Management Accountant Exam?
A computerized exam administered by Prometric, the Certified Management Accountant Exam has two parts. Part One: Financial Reporting, Planning, Performance and Control evaluates a candidate’s proficiency in the areas of budgeting, cost management, external financial reporting, forecasting, internal controls and performance management. Part Two: Financial Decision Making assesses a candidate’s understanding of corporate finance, decision analysis, financial statement analysis, investment decisions, risk management and professional ethics. While the exams may be taken in any order, individuals can sit for only one during a testing session. The four-hour exams consist of multiple choice and essay questions.
How Does the Certified Management Accountant Designation Compare to the Certified Public Accountant Designation?
Although certified management accountant and certified public accountant are both professional accounting designations, they are awarded by two different professional organizations to recognize the successful completion of two distinct sets of requirements. After considering their own professional goals, accounting professionals must decide for themselves whether or not to pursue one of these respected credentials. If they do elect to seek further accreditation, these programs are not exclusive. Accountants may choose to earn either one or both of these designations.
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Earning the right to call themselves certified management accountants is challenging. It also comes with a $2,500 price tag. So why do accounting and financial professionals do it? According to the Institute’s 2013 salary survey, certified management accountants earn an average of nearly $140,000 each year, over $30,000 more than their uncertified accounting peers. The widely respected designation also appeals to employers. Since the designation offers clear financial rewards and expanded career possibilities, it is no wonder that a professional is willing to put in the time and effort to become a certified management accountant.