Passing CMA Part 1 exam : Clear Guide to Cracking the CMA USA Exam

Admin 29 Dec, 20239.1k

Introduction

Certified Management Accountant (CMA) USA is the highest Management Accounting Certification offered by the Institute of Management Accountants (IMA). This will enable you to formulate robust financial strategies and become proficient in financial planning, analysis, control, and decision making.�

With a CMA USA, you can become a financial planning analyst, controller, or even a finance manager. You may even get the chance to climb up the corporate ladder to become a CFO.�

To become a CMA USA, you must learn from the best CMA coaching institute in India, NorthStar Academy.�

What is the exam pattern and format for CMA Part 1 exam?

CMA Part 1 exam is a computerised exam conducted in two parts with 100 multiple-choice questions and 2 essay questions within 4 hours.�

You are eligible to take the exam on any weekday within the testing windows of January/February, May/June, and September/October through Prometric testing centres.

However, most people struggle to clear the CMA Part 1 exam, with pass rates averaging as low as 35-45%.

Here is all that you need to know about CMA Part 1 Exam study?

The IMA or the Institute of Certified Management Accountants is the globally recognized body that prepares Content Specification Outlines (CSOs) referring to the degree of coverage expected in each topic.

This can be helpful to you because :

Communicate the details of the exam content.�
Help the candidates in exam preparation.�
Equip trainers with adequate information for their courses.

The IMA defines the three levels of coverage as:

A: Requires knowledge and comprehension by the candidates.

B: Focusses on knowledge, comprehension, application, and analysis.

C: The candidate needs the skill of knowledge, comprehension, application, analysis, synthesis, and evaluation.

The CMA Part 1 exam tests you at a skill level C for all areas which ideally means that all candidates must be completely knowledgeable about the material being studied.�

Skills required to be CMA USA:

Knowledge: It refers to the ability of the candidate to recall the material that was previously learned
Comprehension: One must be able to interpret and explain subject matter accurately.�
Application: It is the ability to demonstrate the use of the material in a situation
Analysis: One must be able to break down a subject matter or recognize relationships between components and identify critical elements
Synthesis: It refers to the skill to form hypotheses to create new operations
Evaluation: One must also have the ability to criticise, justify and derive conclusions from the material.�

PCMA Part 1 exam certification test covers Financial Planning, Performance, and Analytics.

Six core sections are covered in CMA Part 1 Exam

External Financial Reporting Decisions�
Planning, Budgeting, and Forecasting
Performance Management�
Cost Management�
Internal Controls�
Technology and Analytics�

A. External Financial Reporting Decisions

Financial statements

Balance sheet
Statement of changes in equity
Statement of cash flows
Integrated reporting
Income statement�

Recognition, measurement, valuation, and disclosure

Asset valuation
Equity transactions
Revenue recognition
Income measurement
Valuation of liabilities
Major differences between U.S. GAAP and IFRS

If you have studied accounting in school or college, this should be an easy section and would include a majority of computational questions.�

B. Planning, Budgeting, and Forecasting

Strategic planning

Analysis of factors affecting strategy
Alignment of tactics with long-term strategic goals
Characteristics of a successful strategic planning process
Strategic planning models and analytical techniques
Long-term mission and goals

Budgeting concepts

Operations and performance goals
Characteristics of a successful budget process
Resource allocation
Other budgeting concepts

Forecasting techniques

Regression analysis
Learning curve analysis
Expected value

Budgeting methodologies

Annual business plans (master budgets)
Project budgeting
Activity-based budgeting
Zero-based budgeting
Continuous (rolling) budgets

Flexible budgeting

Annual profit plan and supporting schedules

Operational budgets
Financial budgets
Capital budgets

Top-level planning and analysis

Pro forma income

Financial statement projections

Cash flow projections

Remember that budgeting might seem like the longest section of Part 1. In the CMA Part 1 exam, you will be expected to calculate various items such as the cost of goods manufactured, sold, and other items in the budget.�

You may even be tested on some conceptual questions such as the definition of budgeting. Section B is more in-depth than section A, however, the concepts are not difficult, but the questions in some budgeting scenarios may get lengthy or complex.

C. Performance Management

Cost and variance measures

Comparison of actual to planned results
Management by exception
Use of standard cost systems
Analysis of variation from standard cost expectations
Use of flexible budgets

Responsibility centers and reporting segments

Types of responsibility centers
Reporting of organizational segments
Transfer pricing

Performance measures

Product profitability analysis
Business unit profitability analysis
Return on investment
Residual income
Investment base issues
Customer profitability analysis�
Key performance indicators (KPIs)
Balanced scorecard

Candidates are tested on the methods used for performance evaluation in companies. If you have worked in the accounting department previously, you must be familiar with most evaluation tools.�

Certain components in the syllabus, like standard costs, are used mostly in manufacturing companies as opposed to service-oriented companies. Hence, if you are working for a service company, you could benefit from spending more time on understanding the standard cost concept.

D. Cost Management

Measurement concepts

Cost behavior and cost objects
Actual and normal costs
Joint and by-product costing
Standard costs
Absorption (full) costing
Variable (direct) costing

Costing systems

Job order costing
Activity-based costing
Process costing
Life-cycle costing

Overhead costs

Fixed and variable overhead expenses
Determination of allocation based. Allocation of service department costs
Plant-wide vs. departmental overhead

Supply chain management

Lean resource management techniques
Theory of Constraints
Capacity management and analysis
Enterprise resource planning (ERP)

Business process improvement

Value chain analysis
Process analysis, redesign, and standardization
Activity-based management
Continuous improvement concepts
Cost of quality analysis
Efficient accounting processes
Best practice analysis
Value-added concepts�

You need to develop expertise in various costing methodologies since this section will include calculations.�

E. Internal Controls

Governance, risk, and compliance

Internal control structure and management philosophy
Internal control risk
Corporate governance
Internal control policies for safeguarding and assurance
External audit requirements

System controls and security measures

General accounting system controls
Application and transaction controls
Network controls
Backup controls
Business continuity planning

The internal control questions are mostly conceptual, so could be a little ambiguous. With a lot of practice, you will be able to get the hang of identifying the correct answers.�

F. Technology and Analytics

Information systems

Enterprise resource planning systems
Accounting information systems
Enterprise performance management systems

Data governance

The life cycle of data
Controls against security breaches
Data policies and procedures

Technology-enabled finance transformation

System development life cycle
Process automation
Innovative applications

Data analytics

Data mining
Analytic tools
Business intelligence
Data visualization

This section will help you stay on top of market trends in the industry, so it is necessary to learn this section correctly.�

CMA USA exam format

CMA USA exam is a computerised exam with 2 essay questions and 100 Multiple-choice questions (MCQs).�

The four hours of the CMA Part 1 exam are divided into � 3 hours for the MCQs and 1 hour for the essays.�

You need to correctly answer at least 50% of the MCQs in your CMA USA exam to move to the essay question.�

In the CMA USA essay section, you must complete sub theory or calculation questions based on two scenarios describing a typical business situation.

While answering a conceptual essay question, write as much as you can about the topic so that at least you can gain partial credit.

While all of this may seem overwhelming, please know that you are not alone. With�NorthStar Academy�s comprehensive CMA USA program, you will get access to a framework for studying for success. You will be able to clear your exams on your very first attempt and make your parents proud.�

Frequently asked questions (FAQs)

1. What is CPE?

As mentioned on the IMA website, �Once you�ve completed and passed both parts of the CMA exam, you must complete 30 hours of continuing professional education (CPE) each year.

2. Who is the best CMA USA online faculty?

Irfat�sir has widely been acclaimed as the best mentor for CMA USA. He is often referred to as the �God of Costing�. He has won the Teaching Excellence Award for his expertise and mentorship.

3. Which institute is the best for US CMA online classes?

NorthStar Academy�is the best institute for US CMA online classes.�

4. What is the passing rate for USA CMA?

USA CMA has an average passing rate of 35-45% globally.

5. Is the CMA Part 1 exam easy?

The CMA Part 1 exam can be cleared easily with the right preparation and studying with dedication. Institutes like�NSA�can help you achieve the right framework for success.�

Conclusion

Finally, if you want to dedicatedly spend studying time on CMA USA and To be sure of clearing your exam in the first attempt, you can enroll in�Northstar Academy�s comprehensive CMA program�to get access to experienced faculty such as�M Irfat��Teaching Excellence Award�, learn from the basics, access to a global cohort, study materials, and exam preparation through aggressive mock tests.