Institute of Certified Management Accountants Effective May 1, 2010

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 arts ! and ". 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 organi#ations 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& ' ' ' ' ' (stablish the foundation from which each examination will be developed. rovide 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. rovide information to those who offer courses designed to aid candidates in preparing for the examinations.

)mportant additional information about the content specification outlines and the examinations is listed below. !. 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. ". (ach examination will sample from the subject areas contained within each major topic area to meet the relative weight specifications. *o relative weights have been assigned to the subject areas within each major topic. *o 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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.. (ach 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 /0evel A1 to a thorough understanding of and ability to apply the essentials of a subject area /0evel C1. 2etailed explanations of the coverage levels and the skills expected of candidates are presented below. 3. The topics for arts ! and " have been selected to minimi#e 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. 4. 5ith regard to 6.7. 8ederal income taxation issues% candidates will be expected to understand the impact of income taxes when reporting and analy#ing financial results. )n addition% the tax code provisions that impact decisions /e.g.% depreciation% interest% etc.1 will be tested. 9. Candidates for the CMA designation are assumed to have knowledge of the following& preparation of financial statements% business economics% time$value of money concepts% statistics and probability. :. arts ! and " are four$hour exams and each contains !,, multiple$choice questions and " essay questions. Candidates will have three hours to complete the multiple$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.

;. 8or 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. )t should be noted that candidates are expected to have working knowledge in the use of word processing and electronic spreadsheets. <. (thical issues and considerations are tested in both arts ! and ". )n art !% ethics will be tested from the perspective of the individual and in art "% from the perspective of the organi#ation.

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)n 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: Ability to remember previously learned material such as specific facts% criteria% techniques% principles% and procedures /i.e.% identify% define% list1. Ability to grasp and interpret the meaning of material /i.e.% classify% explain% distinguish between1. Ability to use learned material in new and concrete situations /i.e.% demonstrate% predict% solve% modify% relate1. Ability to break down material into its component parts so that its organi#ational structure can be understood= ability to recogni#e causal relationships% discriminate between behaviors% and identify elements that are relevant to the validation of a judgment /i.e.% differentiate% estimate% order1. 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% revise1. 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.% critici#e% justify% conclude1.

Comprehension: Application: Analysis:

Synthesis:

Eval ation:

The three levels of coverage can be defined as follows& !evel A& !evel ": !evel C: >equiring the skill levels of knowledge and comprehension. >equiring the skill levels of knowledge% comprehension% application% and analysis. >equiring 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 7pecification ?utlines 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 0evel C may contain requirements at the @A%A @B%A or @CA level% but a topic designated as 0evel B will not contain requirements at the @CA level.

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CMA Content Specification Overview #art 1 $inancial #lanning, #erformance and Control (4 hours 100 questions and 2 essay questions)
Planning, udgeting and !orecasting Performance Management Cost Management Internal Controls Professional Et)ics "#$ &'$ &'$ ('$ '$ %evel C %evel C %evel C %evel C %evel C

#art 2

$inancial %ecision Ma&ing (4 hours 100 questions and 2 essay questions)

!inancial Statement Anal*sis Corporate !inance +ecision Anal*sis and ,is- Management Investment +ecisions Professional Et)ics &'$ &'$ &'$ &#$ '$ %evel C %evel C %evel C %evel C %evel C

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Content Specification Outlines for t)e Certified Management Accountant (CMA) Examinations
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. Cuestions in both parts of the CMA exam will assume that the successful candidate can effectively integrate and synthesi#e this knowledge with the specific topics covered in the content specification outline.

Part ( . !inancial Planning, Performance and Control

A/ Planning, udgeting and !orecasting ("#$ . %evels A, , and C) 1' " dgeting concepts a. ?perations and performance goals b. Characteristics of a successful budget process c. >esource allocation d. ?ther budgeting concepts 2' $orecasting techni( es a. >egression analysis b. 0earning curve analysis c. (xponential smoothing d. Time series analysis e. (xpected value )' " dgeting methodologies a. Annual business plans /master budgets1 b. roject budgeting c. Activity$based budgeting d. Dero$based budgeting e. Continuous /rolling1 budgets f. 8lexible budgeting *' Ann al profit plan and s pporting sched les a. ?perational budgets b. 8inancial budgets c. Capital budgets '/ 0op.level planning and anal*sis a. ro forma income b. 8inancial statement projections c. Cash flow projections
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/ Performance Management (&'$ . %evels A, , and C) 1' Cost and variance meas res a. Comparison of actual to planned results b. 6se of flexible budgets to analy#e performance c. Management by exception d. 6se of standard cost systems e. Analysis of variation from standard cost expectations 2' +esponsi,ility centers and reporting segments a. Types of responsibility centers b. Transfer pricing models c. >eporting of organi#ational segments )' #erformance meas res a. roduct profitability analysis b. Business unit profitability analysis c. Customer profitability analysis d. >eturn on investment e. >esidual income f. )nvestment base issues g. (ffect of international operations h. Critical success factors i. Balanced scorecard C/ Cost Management (&'$ . %evels A, , and C) 1' Meas rement concepts a. Cost behavior and cost objects b. Actual and normal costs c. 7tandard costs d. Absorption /full1 costing e Eariable /direct1 costing f. -oint and by$product costing

2' Costing systems a. -ob order costing b. rocess costing c. Activity$based costing d. 0ife$cycle costing

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)' -verhead costs a. 8ixed and variable overhead expenses b. lant$wide versus departmental overhead c. 2etermination of allocation base d. Allocation of service department costs *' -perational Efficiency a. -ust$in time manufacturing b. Material requirements planning /M> 1 c. Theory of constraints and throughput costing d. Capacity management and analysis .' " siness process performance a. Ealue chain analysis b. Ealue$added concepts c. rocess analysis d. Benchmarking e. Activity$based management f. Continuous improvement concepts g. Best practice analysis h. Cost of quality analysis +/ Internal Controls (('$ . %evels A, , and C) 1' +is& assessment, controls, and ris& management a. )nternal control structure and management philosophy b. )nternal control policies for safeguarding and assurance c. )nternal control risk d. )mplications of the 7arbanes$?xley Act of ",," e. 6.7. 8oreign Corrupt ractices Act internal control requirements f. C?7? )nternal Control 8ramework 2' /nternal a diting a. >esponsibility and authority of the internal audit function b. Types of audits conducted by internal auditors )' Systems controls and sec rity meas res a. Feneral accounting system controls b. Application and transaction controls c. *etwork controls d. 8lowcharting to assess controls e. Backup controls f. 2isaster recovery procedures

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E/ Professional Et)ics ('$ . %evels A, , and C) 1' Ethical considerations for management acco nting and financial management professionals a. rovisions of )MAGs @7tatement of (thical rofessional racticeA b. (valuation and resolution of ethical issues such as& 8raudulent reporting Manipulation of analyses and results 6nethical behavior in developing budgets and standards Manipulation of decision factors

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Part &. !inancial +ecision Ma-ing

A/ !inancial Statement Anal*sis (&'$ . %evels A, , and C) 1' "asic $inancial Statement Analysis a. Common si#e financial statements b. Common base year financial statements c. Frowth analysis d. urposes and components of financial statements 2' $inancial #erformance Metrics 0 $inancial +atios a. 0iquidity b. 0everage c. Activity d. rofitability e. Market )' #rofita,ility analysis a. 2u ont analysis b. )ncome measurement analysis c. >evenue analysis d. Cost of sales analysis e. (xpense analysis f. Eariation analysis *' Analytical /ss es in $inancial Acco nting a. )mpact of foreign operations b. (ffects of changing prices and inflation c. ?ff$balance sheet financing d. Cash 8low 7tatement reconciliation to )ncome 7tatement e. )mpact of changes in accounting treatment f. )nternational 8inancial >eporting 7tandards /)8>71 g. 8air value accounting h. 2ifferences in accounting and economic concepts of value and income i. (arnings quality

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/ Corporate !inance (&'$ . %evels A, , and C) 1' +is& and ret rn a. Calculating return b. Types of risk c. >elationship between risk and return d. >isk and return in a portfolio context e. 2iversification f. Asset pricing models 2' Managing financial ris& a. ortfolio management b. Hedging c. 8inancial risk management )' $inancial instr ments a. Term structure of interest rates b. Bonds c. 2ebt management d. Common stock e. referred stock f. ?ptions and other derivatives g. Ealuation of financial instruments *' Cost of capital a. 5eighted average cost of capital b. Cost of individual capital components c. Calculating the cost of capital d. Marginal cost of capital .' Managing c rrent assets a. 5orking capital terminology b. Cash management c. Marketable securities management d. Accounts receivable management e. )nventory management f. Types of short$term credit g. Minimi#ing the cost of short$term credit 1' +aising capital a. 8inancial markets and regulation b. Market efficiency c. 8inancial institutions d. )nitial public offerings e. 7econdary offerings

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Institute of Certified Management Accountants f. 2ividend policy and share repurchases g. rivate placements h. 0ease financing 2. Corporate restr ct ring a. Mergers and acquisitions b. 2ivestitures c. Bankruptcy 3' /nternational finance a. 8ixed% flexible and floating exchange rates b. Managing transaction exposure c. 8inancing international trade d. Transfer pricing tax implications e. olitical risk C/ +ecision Anal*sis and ,is- Management (&'$ . %evels A, , and C) 1' Cost4vol me4profit analysis a. Breakeven analysis b. rofit performance and alternative operating levels c. Analysis of multiple products 2' Marginal analysis a. 7unk costs% opportunity costs and other related concepts b. Marginal costs and marginal revenue c. 7pecial orders and pricing d. Make versus buy e. 7ell or process further f. Add or drop a segment g. Capacity considerations )' #ricing a. b. c. d. e. f. Market comparables 7etting prices Target costing (lasticity roduct life cycle considerations Market structure considerations

*' +is& assessment a. >isk identification and exposure b. 2efinition and scope of operational risk% ha#ard risk% financial risk and strategic risk c. >isk mitigation strategies d. (nterprise >isk Management

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+/ Investment +ecisions (&#$ . %evels A, , and C) 1' Capital , a. b. c. dgeting process 7tages of capital budgeting )ncremental cash flows )ncome tax considerations

2' %isco nted cash flow analysis a. *et present value b. )nternal rate of return c. Comparison of * E and )>> )' #ay,ac& and disco nted pay,ac& a. 6ses of payback method b. 0imitations of payback method c. 2iscounted payback *' +an&ing investment pro5ects a. >anking methods b. Capital rationing c. Mutually exclusive projects .' +is& analysis in capital investment a. 7ensitivity analysis b. Certainty equivalents c. >eal options 1' 6al ation a. b. c. d. 2iscounted cash flow models Multiples models Ealuation for acquisitions and divestitures 2iscount rates

E/ Professional Et)ics ('$ . %evels A, , and C) 1' Ethical considerations for the organi7ation a. Anti$bribery provisions of the 6.7. 8oreign Corrupt ractices Act b. rovisions of )MAGs 7tatement on Management Accounting% @Ealues and (thics& 8rom )nception to racticeA c. Corporate responsibility for ethical conduct

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