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The CPA and the CMA: Accounting Principles

1. Take a look at the Institute of Management Accountants website. www.imanet.org. Watch the Fall 2008 video under the membership section and share what you found interesting or enlightening about the accounting profession. What is the difference between a CPA and CMA? What characteristics are common to both? Why do you think the average person has heard of the CPA but not the CMA?

2. What are some items that appear on an organization's balance sheet? How does an organization calculate net income? What statements are useful in explaining how much cash an organization uses or generates during an accounting period? Why?

3. What are steps of the accounting cycle? Why is it necessary to make adjusting entries at the end of each accounting period? What would happen if all steps were not completed in a specific period?

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Differentiating CPA and CMA: Questions and Answers

1. Take a look at the Institute of Management Accountants website. www.imanet.org. Watch the Fall 2008 video under the membership section and share what you found interesting or enlightening about the accounting profession. What is the difference between a CPA and CMA? What characteristics are common to both? Why do you think the average person has heard of the CPA but not the CMA?

In management and public accounting, both the CPA or the Certified Public Accountant and the CMA or the Certified Management Accountant play very important roles. There are similarities in the responsibilities and roles a CPA and a CMA play however the differences are far more than the similarities. CMA Tiffany Bradford (2007) explains,

"When individuals think of the word accountant, the acronym CPA comes to mind as well. However, management accountants, although less recognized and understood, contribute at least as much to the working of businesses today as public accountants. There are similarities and differences between these two closely related professions and they are both necessary in our current system of business. They also both follow codes of ethics that are increasingly important in the post-SOX (Sarbanes-Oxley) business world we live in today."

CPAs are involved in Public Accounting; they prepare audit and present financial statements for individuals and companies ...

Solution Summary

The solution provides direct answers to questions (see original problem/long description) pertaining to the roles of a CPA and CMA and the difference in their jurisdiction, responsibilities and roles played within their similar but different professions. References are provided. A concise explanation of roles and terminologies make this solution an essential to students studying finance and management.

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