Institute of Certified Management Accountants

Effective January 1, 2015

Content Specification Outlines

Certified Management Accountant (CMA) Examinations
The content specification outlines presented below represent the body of knowledge that
will be covered on the CMA examinations. The outlines may be changed in the future
when new subject matter becomes part of the common body of knowledge.
Candidates for the CMA designation are required to take and pass Parts 1 and 2.
Candidates are responsible for being informed on the most recent developments in the
areas covered in the outlines. This includes understanding of public pronouncements
issued by accounting organizations as well as being up-to-date on recent developments
reported in current accounting, financial and business periodicals.
The content specification outlines serve several purposes. The outlines are intended to:

Establish the foundation from which each examination will be developed.

Provide a basis for consistent coverage on each examination.

Communicate to interested parties more detail as to the content of each

examination part.

Assist candidates in their preparation for each examination.

Provide information to those who offer courses designed to aid candidates in

preparing for the examinations.

Important additional information about the content specification outlines and the
examinations is listed below.
1. The coverage percentage given for each major topic within each examination part
represents the relative weight given to that topic in an examination part. The
number of questions presented in each major topic area approximates this
percentage.
2. Each examination will sample from the subject areas contained within each major
topic area to meet the relative weight specifications. No relative weights have
been assigned to the subject areas within each major topic. No inference should be
made from the order in which the subject areas are listed or from the number of
subject areas as to the relative weight or importance of any of the subjects.

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3. Each major topic within each examination part has been assigned a coverage level
designating the depth and breadth of topic coverage, ranging from an introductory
knowledge of a subject area (Level A) to a thorough understanding of and ability
to apply the essentials of a subject area (Level C). Detailed explanations of the
coverage levels and the skills expected of candidates are presented below.
4. The topics for Parts 1 and 2 have been selected to minimize the overlapping of
subject areas among the examination parts. The topics within an examination part
and the subject areas within topics may be combined in individual questions.
5. With regard to U.S. Federal income taxation issues, candidates will be expected to
understand the impact of income taxes when reporting and analyzing financial
results. In addition, the tax code provisions that impact decisions (e.g.,
depreciation, interest, etc.) will be tested.
6. Candidates for the CMA designation are assumed to have knowledge of the
following: preparation of financial statements, business economics, time-value of
money concepts, statistics and probability.
7. Parts 1 and 2 are four-hour exams and each contains 100 multiple-choice
questions and 2 essay questions. Candidates will have three hours to complete the
multiple-choice questions and one hour to complete the essay section. A small
number of the multiple-choice questions on each exam are being validated for
future use and will not count in the final score.
8. For the essay questions, both written and quantitative responses will be required.
Candidates will be expected to present written answers that are responsive to the
question asked, presented in a logical manner, and demonstrate an appropriate
understanding of the subject matter. It should be noted that candidates are
expected to have working knowledge in the use of word processing and electronic
spreadsheets.

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In order to more clearly define the topical knowledge required by a candidate, varying
levels of coverage for the treatment of major topics of the content specification outlines
have been identified and defined. The cognitive skills that a successful candidate should
possess and that should be tested on the examinations can be defined as follows:
Knowledge:

Comprehension:

Application:

Analysis:

Synthesis:

Evaluation:

Ability to remember previously learned material such as

specific facts, criteria, techniques, principles, and procedures
(i.e., identify, define, list).
Ability to grasp and interpret the meaning of material (i.e.,
classify, explain, distinguish between).
Ability to use learned material in new and concrete situations
(i.e., demonstrate, predict, solve, modify, relate).
Ability to break down material into its component parts so that
its organizational structure can be understood; ability to
recognize causal relationships, discriminate between behaviors,
and identify elements that are relevant to the validation of a
judgment (i.e., differentiate, estimate, order).
Ability to put parts together to form a new whole or proposed
set of operations; ability to relate ideas and formulate
hypotheses (i.e. combine, formulate, revise).
Ability to judge the value of material for a given purpose on
the basis of consistency, logical accuracy, and comparison to
standards; ability to appraise judgments involved in the
selection of a course of action (i.e., criticize, justify, conclude).

The three levels of coverage can be defined as follows:

Level A:

Requiring the skill levels of knowledge and comprehension.

Level B:

Requiring the skill levels of knowledge, comprehension,

application, and analysis.

Level C:

Requiring all six skill levels, knowledge, comprehension,

application, analysis, synthesis, and evaluation.

The levels of coverage as they apply to each of the major topics of the Content
Specification Outlines are shown on the following pages with each topic listing. The
levels represent the manner in which topic areas are to be treated and represent ceilings,
i.e., a topic area designated as Level C may contain requirements at the A, B, or C
level, but a topic designated as Level B will not contain requirements at the C level.

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CMA Content Specification Overview

Part 1

Financial Reporting, Planning, Performance and Control

(4 hours 100 questions and 2 essay questions)
External Financial Reporting Decisions
Planning, Budgeting and Forecasting
Performance Management
Cost Management
Internal Controls

Part 2

15%
30%
20%
20%
15%

Level C
Level C
Level C
Level C
Level C

Financial Decision Making

(4 hours 100 questions and 2 essay questions)
Financial Statement Analysis
Corporate Finance
Decision Analysis
Risk Management
Investment Decisions
Professional Ethics

25%
20%
20%
10%
15%
10%

Level C
Level C
Level C
Level C
Level C
Level C

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Content Specification Outlines

Certified Management Accountant (CMA) Examinations
Part 1 - Financial Reporting, Planning, Performance, and Control
A. External Financial Reporting Decisions (15% - Levels A, B, and C)
1. Financial statements
a. Balance sheet
b. Income statement
c. Statement of changes in equity
d. Statement of cash flows
2. Recognition, measurement, valuation, and disclosure
a. Asset valuation
b. Valuation of liabilities
c. Equity transactions
d. Revenue recognition
e. Income measurement
f. Major differences between U.S. GAAP and IFRS
B. Planning, Budgeting and Forecasting (30% - Levels A, B, and C)
1. Strategic planning
a. Analysis of external and internal factors affecting strategy
b. Long-term mission and goals
c. Alignment of tactics with long-term strategic goals
d. Strategic planning models and analytical techniques
e. Characteristics of successful strategic planning process
2. Budgeting concepts
a. Operations and performance goals
b. Characteristics of a successful budget process
c. Resource allocation
d. Other budgeting concepts
3. Forecasting techniques
a. Regression analysis
b. Learning curve analysis
c. Expected value

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4. Budgeting methodologies
a. Annual business plans (master budgets)
b. Project budgeting
c. Activity-based budgeting
d. Zero-based budgeting
e. Continuous (rolling) budgets
f. Flexible budgeting
5. Annual profit plan and supporting schedules
a. Operational budgets
b. Financial budgets
c. Capital budgets
6. Top-level planning and analysis
a. Pro forma income
b. Financial statement projections
c. Cash flow projections
C. Performance Management (20% - Levels A, B, and C)
1. Cost and variance measures
a. Comparison of actual to planned results
b. Use of flexible budgets to analyze performance
c. Management by exception
d. Use of standard cost systems
e. Analysis of variation from standard cost expectations
2. Responsibility centers and reporting segments
a. Types of responsibility centers
b. Transfer pricing models
c. Reporting of organizational segments
3. Performance measures
a. Product profitability analysis
b. Business unit profitability analysis
c. Customer profitability analysis
d. Return on investment
e. Residual income
f. Investment base issues
g. Key performance indicators (KPIs)
h. Balanced scorecard

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D. Cost Management (20% - Levels A, B, and C)
1. Measurement concepts
a. Cost behavior and cost objects
b. Actual and normal costs
c. Standard costs
d. Absorption (full) costing
e Variable (direct) costing
f. Joint and by-product costing
2. Costing systems
a. Job order costing
b. Process costing
c. Activity-based costing
d. Life-cycle costing
3. Overhead costs
a. Fixed and variable overhead expenses
b. Plant-wide versus departmental overhead
c. Determination of allocation base
d. Allocation of service department costs
4. Supply Chain Management
a. Lean manufacturing
b. Enterprise resource planning (ERP)
c. Theory of constraints and throughput costing
d. Capacity management and analysis
5. Business process improvement
a. Value chain analysis
b. Value-added concepts
c. Process analysis
d. Activity-based management
e. Continuous improvement concepts
f. Best practice analysis
g. Cost of quality analysis
h. Efficient accounting processes
E. Internal Controls (15% - Levels A, B, and C)
1. Governance, risk, and compliance
a. Internal control structure and management philosophy
b. Internal control policies for safeguarding and assurance
c. Internal control risk
d. Corporate governance
e. External audit requirements

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2. Internal auditing
a. Responsibility and authority of the internal audit function
b. Types of audits conducted by internal auditors
3. Systems controls and security measures
a. General accounting system controls
b. Application and transaction controls
c. Network controls
d. Backup controls
e. Business continuity planning

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Part 2- Financial Decision Making

A. Financial Statement Analysis (25% - Levels A, B, and C)
1. Basic Financial Statement Analysis
a. Common size financial statements
b. Common base year financial statements
2. Financial Ratios
a. Liquidity
b. Leverage
c. Activity
d. Profitability
e. Market
3. Profitability analysis
a. Income measurement analysis
b. Revenue analysis
c. Cost of sales analysis
d. Expense analysis
e. Variation analysis
4. Special issues
a. Impact of foreign operations
b. Effects of changing prices and inflation
c. Off-balance sheet financing
d. Impact of changes in accounting treatment
e. Accounting and economic concepts of value and income
f. Earnings quality
B. Corporate Finance (20% - Levels A, B, and C)
1. Risk and return
a. Calculating return
b. Types of risk
c. Relationship between risk and return
2. Long-term financial management
a. Term structure of interest rates
b. Types of financial instruments
c. Cost of capital
d. Valuation of financial instruments

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3. Raising capital
a. Financial markets and regulation
b. Market efficiency
c. Financial institutions
d. Initial and secondary public offerings
e. Dividend policy and share repurchases
f. Lease financing
4. Working capital management
a. Working capital terminology
b. Cash management
c. Marketable securities management
d. Accounts receivable management
e. Inventory management
f. Types of short-term credit
g. Short-term credit management
5. Corporate restructuring
a. Mergers and acquisitions
b. Bankruptcy
c. Other forms of restructuring
6. International finance
a. Fixed, flexible, and floating exchange rates
b. Managing transaction exposure
c. Financing international trade
d. Tax implications of transfer pricing
C. Decision Analysis (20% - Levels A, B, and C)
1. Cost/volume/profit analysis
a. Breakeven analysis
b. Profit performance and alternative operating levels
c. Analysis of multiple products
2. Marginal analysis
a. Sunk costs, opportunity costs and other related concepts
b. Marginal costs and marginal revenue
c. Special orders and pricing
d. Make versus buy
e. Sell or process further
f. Add or drop a segment
g. Capacity considerations

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3. Pricing
a.
b.
c.
d.
e.

Pricing methodologies
Target costing
Elasticity of demand
Product life cycle considerations
Market structure considerations

D. Risk Management (10% - Levels A, B, and C)

1. Enterprise risk
a. Types of risk
b. Risk identification and assessment
c. Risk mitigation strategies
d. Managing risk
E. Investment Decisions (15% - Levels A, B, and C)
1. Capital budgeting process
a. Stages of capital budgeting
b. Incremental cash flows
c. Income tax considerations
2. Discounted cash flow analysis
a. Net present value
b. Internal rate of return
c. Comparison of NPV and IRR
3. Payback and discounted payback
a. Uses of payback method
b. Limitations of payback method
c. Discounted payback
4. Risk analysis in capital investment
a. Sensitivity and scenario analysis
b. Real options

F. Professional Ethics (10% - Levels A, B, and C)

1. Ethical considerations for management accounting and financial
management professionals
a. IMAs Statement of Ethical Professional Practice
b. Fraud triangle
c. Evaluation and resolution of ethical issues

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2. Ethical considerations for the organization
a. IMAs Statement on Management Accounting, Values and Ethics:
From Inception to Practice
b. U.S. Foreign Corrupt Practices Act
c. Corporate responsibility for ethical conduct

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