To provide candidates with a brief view of some of the types of questions on the CMA^® (Certified Management Accountant) exam, following are five questions – with correct answers and explanations for each. 

You can also check out these additional practice multiple-choice and essay questions to test your CMA knowledge.

CMA Exam Part 1:

1. A company has a direct labor price variance that is favorable. Of the following, the most serious concern the company may have about this variance is that

a. the circumstances giving rise to the favorable variance will not continue in the future.  
b. the production manager may not be using human resources as efficiently as possible. 
c. the cause of the favorable variance may result in other larger unfavorable variances in the value chain.  
d. actual production is less than budgeted production.  

Correct answer c.
A favorable direct labor price variance could indicate that lower-skilled labor is being used than what was planned. This could lead to unfavorable labor use and material usage variances that more than offset the favorable price variance.

2. Which one of the following auditor findings would most likely raise a red flag about a company’s internal control environment?

a. The company has an established independent audit committee. 
b. Only select committees of the board have access to outside attorneys.
c. The roles of the company’s CEO and board chairman are separate. 
d. The board nominations committee selects only independent directors.  

Correct answer b.
All committees of the board should have access to outside attorneys and consultants other than the corporation’s normal counsel and consultants. Under the provisions of SOX, the audit committee of an SEC reporting company is entitled to such representation independently.

CMA Exam Part 2:

3. If Dexter Industries has a beta value of 1.0, then its

a. return should equal the risk-free rate.
b. price is relatively stable.
c. expected return should approximate the overall market.
d. volatility is low.

Correct answer c.
If a firm has a beta value of 1.0, the stock has the same systematic risk as the market as a whole and should rise and fall with the market. 

4. Under a floating exchange rate system, which of the following should result in a depreciation of the Swiss franc?

a. U.S. inflation declines relative to the Swiss inflation.
b. U.S. income levels improve relative to the Swiss.
c. Swiss interest rate rises relative to the U.S. rates.
d. Decrease in outflows of Swiss capital to the U.S.

Correct answer a.
If the U.S. inflation rate declines relative to the Swiss inflation rate, the U.S. dollar will purchase a greater number of Swiss francs, resulting in the depreciation of the Swiss franc.

5. An IMA member discovers a problem that could mislead users of the firm’s financial data and has informed his immediate superior. The member should report the circumstances to the audit committee and/or the Board of Directors only if the immediate superior

a. is the firm’s chief executive officer and knows about the situation but refuses to correct it.
b. reports to the chief executive officer and knows about the situation but refuses to correct it.
c. assures the member that the problem will be resolved.
d. reports the situation to her superior.

Correct answer a. 
An IMA member should “discuss the issue with your immediate supervisor except when it appears that the supervisor is involved. In that case, present the issue to the next level. If you cannot achieve a satisfactory resolution, submit the issue to the next management level. If your immediate supervisor is the chief executive officer or equivalent, the acceptable reviewing authority may be a group such as the audit committee, executive committee, board of directors, board of trustees, or owners.”