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Demystifying CMA Salary in India: Factors, Trends, and Growth Prospects

Posted on by Imarticus Learning

Over time, there has been a notable surge in the demand for CMA candidates as organisations increasingly appreciate the importance of having professionals who possess robust financial management skills and strategic planning expertise.

CMA graduates not only excel in cost management and enhancing efficiency but also bring valuable expertise in risk assessment and management, rendering them indispensable assets to organisations, be it in the private or public sector.

Did you know a recent survey claimed that CMA professionals can earn as much as 58% more compared to non-CMA professionals?

With that being said, mentioned below is a detailed guide exploring the diverse figures for CMA salary in India across different states and how they can be affected by multiple factors.

Average CMA Salary In India

As of now, CMA salary in India varies widely, starting from INR 1.2 Lakhs and going up to INR 20 Lakhs annually. On average, experienced CMA graduates can expect an annual salary of around INR 6 Lakhs.

It’s important to note that this figure can fluctuate significantly based on various factors, including your employer, location, level of experience, specific job role, and more.

Factors Affecting CMA Salary In India

The CMA salary in India can be influenced by multiple factors. Such include,

Experience 

Experience is a significant determinant of CMA salaries. CMAs with several years of experience tend to command higher salaries, as they bring the necessary practical knowledge and skills to their position.

To understand it better, let us add a table comparing the years of experience and changing salary figures.

Years of Experience Average Annual Salary
Entry Level (1-2 Years) INR 3.7 Lakhs
Mid Level (4-5 Years) INR 5.7 Lakhs
Senior Level (9-10 Years) INR 20 Lakhs

Location

The geographical location of the job can also cause discrepancies in your total compensation as a CMA graduate. Metropolitan cities such as Mumbai, Delhi, or Pune often have a high cost of living and tend to provide higher CMA salaries compared to other smaller cities or rural areas. 

State Salary Per Annum
Bangalore INR 3.8 lakhs
Jaipur INR 3.3 – 6 lakhs
Kolkata INR 6-10 Lakhs

Job Role and Responsibilities

The specific role or responsibilities entrusted to an individual can also affect the total compensation package significantly. CMAs in leadership roles, such as CFOs or financial managers, generally earn much more than those in junior-level positions.

The different job roles that you can explore as a CMA graduate include,

Financial Analyst – In your role as a financial analyst, your responsibilities will encompass evaluating financial data, appraising investment performance, and furnishing valuable insights to support the decision-making process. Primarily, the annual salary offered to a financial analyst in India is approximately INR 4 lakhs.

Chief Financial Officer – The role of a Chief Financial Officer, also known as CFO, is at the topmost position of an organisation. They are pivotal in shaping the organisation’s financial direction and performance, leading it towards consistent growth. Currently, the average annual salary offered for the role of a CFO is nearly INR 46.6 lakhs, making it a lucrative career for all finance aspirants to look up to.

Cost Accountants –  Cost accountants are entrusted with the responsibility of providing valuable financial information and analysis related to the cost of products, services, and operations. The current average salary for cost accountants is nearly INR 4.8 lakhs per annum, which is subject to change following factors like experience and location.

Apart from the mentioned roles and factors, the salary levels for CMAs in India can also vary depending on factors such as market demand, negotiation skills, economic conditions, etc. 

Growing Importance of CMA Certification In India

The Certified Management Accountant certification, commonly known as the CMA certificate, has been gaining significant popularity in recent years owing to its great value to the business and finance world. It demonstrates an individual’s commitment and dedication to professional development and expertise in the finance domain, thus making them an invaluable asset to the organisation.

In addition, the CMA certificate also harbours several benefits, such as global recognition, higher earning potential, competitive advantage, and more. 

According to a recent survey, as much as 88% of candidates have agreed that the CMA certificate has played a vital role in boosting their professional confidence. Considering all the presented reasons and statistics, it can be easily predicted that the popularity of CMA-certified candidates is likely to experience a rapid surge in the upcoming years.

Conclusion

With the growing demand for skilled finance professionals, CMA candidates are in high demand across diverse sectors, including manufacturing, healthcare, technology, and finance. Earning a CMA certification can unlock a multitude of compelling career prospects and the potential for greater income. Indeed, numerous companies prioritise CMA-certified individuals for leadership positions within the realms of finance and accounting.

On that note, we present to you the CMA USA course offered by Imarticus Learning. From expert mentoring to unlimited access to study materials and top placements, the list of advantages that this program brings to the table is endless.

Essentials of Audit and Advisory: Internal Controls

Posted on by Imarticus Learning

The growth in the business world has resulted in new regulations coming into force. Audits have become necessary in business long ago. Accounting and finance has become a lucrative career option. For that, a CMA certification has garnered immense attention.

As time has progressed, there has been a constant improvement in implying new regulations for businesses to follow. One such example is internal controls. Internal controls have become an integral part of any organisation trying to make progress with transparency. Here, we will discuss various aspects of internal controls.

What is Internal Control?

Internal control is a process that ensures that a company or organisation is compliant with all financial regulations. You can think of internal controls as a measure to monitor other aspects of the company to ensure it does not suffer from any mishaps.

These controls ensure that the organisation is meeting its goals while preventing errors, fraud and mismanagement. Internal controls are very effective in monitoring smoother operations for the organisation.

In most cases, the managerial postholders are responsible for monitoring internal controls and creating an appropriate audit trail. External auditors will check the organisation’s financial reports, as well as the internal controls, to make sure everything is in order.

What are the Components of Internal Control?

When implementing an internal control system, an organisation should keep a few components in the system so it becomes entirely functional.

Control Environment

It is the basis of all other components of the internal control. It creates a consciousness about the control system in the organisation. It is the management that designs the control environment.

The employees must adhere to the regulations and reveal improper activities, such as fraud.

Information and Communication System

Information and communication systems play a very crucial part in internal controls. With a fluent system, it can create an opacity about the roles and duties of each employee. In addition, if the employees can understand the steps they require to exercise, it can help them perform better.

Risk Assessment

It deals with analysing the potential risks or losses in achieving the goals. Next comes the management of such risks. Organisations can then focus on measures to mitigate the risk factors and keep the loss at a minimum while achieving a particular goal.

Control Activities

These procedures and regulations ensure that the internal control system is operating at its capacity. These focus on maintaining the integrity of the system while also ensuring compliance. Preventive and detective activities are part of these.

Monitoring

Monitoring how internal controls are working over a given period is crucial. It can help identify any ongoing issues in the system that can cause any disruption. In some cases, there might be a requirement for updating the regulations or training the employees for the system to function better.

Advantages and Disadvantages of Internal Controls

Although internal controls provide an organisation with several benefits, it is not devoid of negatives. Here are the pros and cons of internal controls.

Advantages

The advantages of internal controls are:

Internal controls provide clear guidelines to all employees regarding their duties and responsibilities. The employees will know which procedures they are required to follow.

Internal controls can massively improve an organisation’s operational efficiency. It prevents the organisation from following any unnecessary steps in its day-to-day operations. These help in improving the financial activities of the company. Internal controls play a crucial role in preventing fraud.

Generating financial statements is a part of the responsibilities of internal control. It aids the organisation’s hierarchy in making business decisions that matter.

Internal controls can enhance the accountability of the organisation significantly. It ensures the identification of every error and subsequent improvement to ensure the non-occurrence of similar mistakes.

With internal controls, you can reduce the cost of external audits. A clearly enforced internal control means you can reduce the requirement for revisions and avoid starting the entire internal controls up from scratch after an audit.

Disadvantages

There are some disadvantages of internal controls. These are:

Often, there are deficiencies in the organisational structure that make internal controls ineffective. Also, sometimes, the members in the higher level of management may interfere with internal controls.

If the organisation is too small, it may not be able to implement every aspect of internal control.

Human errors are a common issue that can cause internal control to fail. Also, keep in mind that not all human errors are unintentional.

Updating the internal control system with the latest technology and measures is crucial. Failing to do so may result in a failed internal control system.

Internal control measures are usually costly. They take a long time and quite some resources to implement.

Types of Internal Controls

There are two types of internal controls. These are:

Preventive Controls

Preventive controls are measures in internal control to prevent any errors or frauds from taking place. You can think of them as vaccines to prevent a disease from happening. Preventive controls include

Duty separation
Using passwords
Invoice authorisation
Requirement of approval and
Limiting access to assets like inventory and cash

Detective Controls

Detective controls come into use when an organisation suffers from any mishap. It is comparable to the use of medicines when a person gets sick. Detective controls include

External and internal audits
Reconciliations and
Budget monitoring

Role of Internal Controls in Audit and Advisory

Although the management of an organisation implements internal controls, it is of great interest to the auditor. An auditor can rely on efficient internal control to make their work easy.

However, depending too much on internal control can often create a problem for the editor.

Conclusion

Internal control systems can benefit both the organisation and the auditors. It can prevent any mishaps from happening. If you are interested in accounting and finance, the Certified Management Accountant programme by Imarticus is a great option to hone your skills. The US CMA course is recognised around the world and helps in mastering the 12 core skills required in accounting and finance.

International Financial Reporting Standards (IFRS) vs. Generally Accepted Accounting Principles (GAAP)

Posted on by Imarticus Learning

In finance and accounting, International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) play a crucial role in ensuring the accuracy, transparency, and comparability of financial information. Understanding the differences is crucial for internationally operating companies and investors who analyse financial statements.

If you are interested in the US CMA course, read this blog to explore the key differences between IFRS and GAAP, their origins and evolution, the implications of their implementation, and the future outlook for accounting standards on the global stage. 

Origin of IFRS and GAAP

On one hand, IFRS was created by the International Accounting Standards Board (IASB). The IASB was established in 2001 and developed IFRS into a globally recognised accounting standard. IFRS has been adopted by most countries in the world, including the major economies. 

On the other hand, GAAP originated in the United States and has a long history of evolution from various activities.

Key Differences Between IFRS and GAAP

Here are the main differences between IFRS and GAAP at a glance: 

  1. Conceptual Framework: IFRS and GAAP have different conceptual frameworks that guide the preparation and presentation of financial statements. 
  2. Presentation of financial statements: They may have different balance sheets, income statements, and cash flow statement requirements that affect the presentation and classification of records. 
  3. Revenue recognition: IFRS and GAAP have different criteria and timing for revenue recognition. They may have different approaches to revenue recognition for specific lines of business or transactions, such as long-term contracts or multi-party arrangements.  
  4. Inventory Valuation: IFRS and GAAP allow different inventory valuation methods. In addition, they may have separate claims for inventory damage and reductions. 
  5. Financial instruments: IFRS and GAAP take different approaches to the classification, measurement, and presentation of financial instruments. They may also differ in accounting for derivatives and hedging activities.

Convergence of IFRS and GAAP

Efforts to harmonise IFRS and GAAP aim to unify accounting standards, but full harmonisation remains a long-term goal due to various challenges. The future requires continued convergence in key areas such as revenue recognition and financial instruments. The global adoption of IFRS is increasing, it promotes consistency and transparency in financial reporting. GAAP is still very important, especially in the United States. The future requires continuous convergence, global adoption of IFRS standards, and coexistence of both standards in different jurisdictions. Achieving global harmonisation is a complex and evolving process.

Implications of applying IFRS and GAAP

The implementation of IFRS (International Financial Reporting Standards) and GAAP (Generally Accepted Accounting Principles) can have several consequences and challenges: 

  1. Global business environment: Using different accounting standards presents challenges for multinational companies operating in multiple jurisdictions as they must navigate additional reporting requirements and reconcile financial statements. Harmonised measures aim to improve consistency and cross-border comparability. 
  2. Quality of Financial Reporting: Differences between IFRS and GAAP can affect the comparability and usefulness of financial statements. Investors and analysts can face challenges when comparing companies with different standards that can influence investment decisions. 
  3. Migration and implementation issues: Moving from one set of standards to another (e.g. GAAP to IFRS or vice versa) can be difficult and expensive for companies. This requires understanding and implementing new accounting principles, retraining staff, and adapting systems and processes. 
  4. Education and Professional Development: Finance and accounting professionals must be familiar with both IFRS and GAAP standards to ensure compliance and make informed decisions. Continuous training and professional development are essential to managing the complexity and changes in accounting standards.  
  5. Regulatory Compliance: Companies operating in jurisdictions that require compliance with certain accounting standards, such as US GAAP, must ensure that they meet regulatory requirements and avoid legal consequences. 
  6. Disclosure requirements: IFRS and GAAP may have different disclosure requirements that affect the level of transparency and information provided to stakeholders. Companies should carefully consider the specific disclosure requirements of each standard to meet their reporting obligations. 

Adapting to these impacts and challenges requires companies to have a thorough understanding of both IFRS and GAAP, stay abreast of changes in standards, and assess the impact on financial reporting and decision-making processes.

US CMA and IFRS-GAAP relationship

The US Certified Management Accountant (CMA) certification recognises the importance of both International Financial Reporting Standards (IFRS) and  Generally Accepted Accounting Principles (GAAP). The CMA programme includes an IFRS section that provides CMAs with information on global accounting standards. GAAP is the accounting standard used in the United States, and a CMA must have a thorough understanding of it. This ensures that CMAs are prepared to handle international financial reporting and comply with US accounting principles.

Conclusion

Although there are some convergence efforts between IFRS and GAAP, their differences present challenges to global financial reporting that require careful consideration and adaptation by companies operating in multiple jurisdictions. 

Imarticus is an institute that offers a Certified Management Accountant certification programme to help professionals prepare for the CMA exams. You can become a CMA after meeting specific educational and experience requirements and passing the CMA exam. CMAs are equipped to make management decisions and have career opportunities in finance, accounting, and strategic positions.