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Management Accounting


Accounting is an intensive field and plays a significant and vital role in the economy. Every business or organization needs to keep a track of their account, which helps them measure the performance of the organization and take further measures to grow their business or prevent any risk or shortcomings. Accounting today is defined as a tool for business analysis. The field is divided into two segments which constitute of Financial Accounting and Management Accounting. Though both are part of accounting, there is a difference between financial accounting and management accounting.

Financial Accounting is the presentation of the financial stats of the company. This information is more important from an investment point of view for the outsiders. Also, the Shareholders and Board needs the data to make informed decisions and take timely actions.


What is Management Accounting?

Management accounting is more about the internal matters of the company. Management accounting helps the owners and other managerial personnel analyze the performance of the company. This data helps them define the costs, budgets, policies that help optimize the earnings of the company. The decisions related to the operations and processes are based on this data.

Here’s the difference between Financial Accounting and Management Accounting:

Basis for Comparison

Management accounting

Financial accounting

PurposeIt is used for internal purposeIt is used for external reporting
RegulationIt is not regulated by any lawThere are predefined standards to present the data
Users Useful for management in the organization Useful for shareholders, investors and regulators
Objective It aids in internal decision making It aids in investment decision by investors and monitoring by regulators
Mandatory Preparation and presentation of financial statements is not mandatory Preparation and presentation are mandatory.
Audit It is not subject to audit Financial statements are subject to audit
Frequency There is no defined frequency for preparation and presentation of the statements Financial statements must be prepared for the financial year
Contents Management accounts include both monetary and non-monetary information Financial accounts include only monetary information


Functions and Objectives of Management Accounting

  • Profitability – Determine the profitability of products, projects, or a line of business.
  • Break-even analysis – Determine the point at which the organization will attain a no profit, no loss situation.
  • Forecasting – Analyze the current trends, risks, loopholes, and their impact on the organization.
  • Stock valuation – Determine the direct and indirect cost of stock in hand
  • Variance analysis – Perform trend analysis and find the cause for the variance
  • Capital budgeting analysis – Acquiring fixed assets, analyzing the costs involved and allocation of finances


Courses for Management Accounting

Here are the two best Management accounting courses offered globally:


US CMA (Certified Management Accountant)

The CMA certification is offered by the Institute of Management Accountants (IMA), USA – the only organization that offers a CMA Certification. IMA operates in 140 countries and consists of more than 10,000 members.  IMA trains the candidate on technologies like eXtensible Business Reporting Language (XBRL) to conduct the accounting process.


Eligibility for CMA Certification

Here is the list of criteria one needs to fulfill to earn the CMA Certification:

  • Should be a Member of IMA
  • Should have a Bachelor’s degree from an accredited university
  • Should have two years of relevant experience
  • Should have passed both the parts of CMA Exams


CMA Exam

CMA examination consists of two parts and the topics covered under each part is as follows:

Syllabus for CMA Part 1 Examination

  • External Financial Reporting Decisions
  • Planning, Budgeting, and Forecasting
  • Performance Management
  • Cost Management
  • Internal Controls

Syllabus for CMA Part 2 Examination

  • Financial Statement Analysis
  • Corporate Finance
  • Decision Analysis
  • Risk Management
  • Investment Decisions
  • Professional Ethics

Each part is of four hours duration and each exam consists of 100 MCQs and two essays.

Duration and Month of Examination

  • The candidate must clear both the exams within 3 years from the date of registration.
  • The candidate can appear for the exam in the following months: January and February, May and June, September and October.


CIMA (Chartered Institute of Management Accountants)

CIMA is United Kingdom-based Management Accounting Institute and is considered world’s largest Management Accounting Association. The Institute consists of more than 218K members across 177 countries.

There are four levels to the CMA course:

  • Certificate in Accounting Level
  • Operational level
  • Management level
  • Strategic level


Eligibility and entry route

The eligibility criteria or entry level for each candidate depends on the qualifications they hold.

Undergraduate or Graduate from non-commerce backgroundEntry: Certificate in Accounting Level, Exams: 16 (Exemptions: None)
Graduates with commerce backgroundEntry: Operational Level, Exams: 12 (Exemptions: 4)
Candidate with MBA in FinanceEntry: Management Gateway, Exams: 5 (Exemptions: 11)
Candidate with CMA/ CAEntry: Stategic level (Case Study), Exams: 1 (Exemptions: 16)


Course Structure and Syllabus

Certificate in Accounting Level

  • BA1: Fundamentals of Business Economics
  • BA 2: Fundamentals of Management Accounting
  • BA 3: Fundamentals of Financial Accounting
  • BA 4: Fundamentals of Ethics, Corporate Governance and Business Law

Exam: 4 Objective Exams
Certificate: CIMA Certificate in Business Accounting

Operational Level

  • E1: Organizational Management
  • P1: Management Accounting
  • F1: Financial Reporting and Taxation

Exam: 3 Objective Exams and 1 Case study
Certificate: CIMA Diploma in Management Accounting

Management Level

  • E2: Project and Relationship Management
  • P2: Advanced Management Accounting
  • F2: Advanced Financial Reporting

Exam: 3 Objective Exams and 1 Case study
Certificate: CIMA Advance Diploma in Management Accounting

Strategic Level

  • E3: Strategic Management
  • P3: Risk Management
  • F3: Financial Strategy

Exam: 3 Objective Exams and 1 Case study
Certificate: Assessment of Practical experience

Duration and Month of Examination for all the levels of CIMA

Objective type

Case study

Duration90 min180 min
Exam FrequencyDaily based on availability at Pearson Centre4 times a year (Feb, May, Aug, Nov)
Result Declaration Immediately After 1 month of the exam