Management And Accounting Web

Krippel, G. L. and S. Mitchell. 2017. The CMA advantage: An update. Strategic Finance (September): 38-45.

Summary by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida

How to Manage Yourself Main | Professional Certification Main

This is an update of the authors' 2011 and 2014 articles (See Krippel, G. L. and S. Mitchell. 2011. What's your CMA worth? Strategic Finance (November): 41-47. Note). The illustration below is based on the calculations in Table 1 on page 42 of the update. The net present value of the CMA at each age is determined by starting with salary estimates from Robert Half's 2015 Salary Guide for Accounting and Finance. The guide's indication that certification is worth a ten percent premium was used to arrive at a salary of $51,929 for a 22 year old with a CMA. Salaries for ages 23-59 were based on the IMA's 1990-2016 salary surveys. Salary projections were determined by increasing the starting amounts using the long-run historical rolling average inflation rate based on the Consumer Price Index. The salary projections were converted to present values using a 5 percent discount rate. The cost of obtaining a CMA was subtracted from these amounts. These cost included a CMA exam fee, two days lost wages and travel cost, cost of CMA review, cost of 300 hours of exam prep, cost of IMA membership, and lost wages for 30 hours of annual CPE. Based on their analysis, the net present value of the CMA cumulative career earnings premium for a 22 year old is $508,713. This amount increases slightly up to age 29 and then begins to decline as the age at which the certification is obtained increases.

NPV 

A similar analysis of the net present value of the CPA appears in the Krippel, Moody, Mitchell 2016 article listed below. In that article they show the value of the CPA for those who work in small, medium size, and large companies. Their data indicates that the CPA is much more valuable for those who work in large companies. See my summary of that paper for a number of graphic illustrations showing their estimates. Company size is not considered in this article, but it clearly makes a big difference.

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Related summaries:

Brausch, J. M. and D. Whitney. 2009. CMA: The quest for increasing value. Strategic Finance (December): 9-10, 12. (Summary).

Krippel, G. L. and S. Mitchell. 2011. What's your CMA worth? We show you how to estimate the lifetime value of the certification. Strategic Finance (November): 41-47. (Note).

Krippel, G. L., J. Moody and S. Mitchell. 2016. CPA credential delivers high value. Journal of Accountancy (May): 32-36. (Summary).

Martin, J. R. Not dated. IMA salary calculators 2010-2015. Management And Accounting Web. http://maaw.info/ArticleSummaries/ArtSumSalarySurveys.htm

Schiffel, L., K. A. Smith and D. L. Schroeder. 2011. IMA 2010 salary survey: How's that recovery workin' for you? Strategic Finance (June): 26-46. (Summary).

VanZante, N. R. 2010. IMA's professional certification program has changed. Management Accounting Quarterly (Summer): 48-51. (Summary).