The CFM exam focuses on professionals in the financial world that are not entering public accounting but rather are working inside of organizations. They build corporate models, perform managerial accounting tasks, and report findings to the board or senior managers. However, they may not produce generally accepted accounting principles-compliant (GAAP-compliant) financial statements about the company, and do not need all of the knowledge contained in the CPA exam.
The certified financial manager has four knowledge areas that are the subject of exam questions. The first part is economics, finance, and management, which explores broad topics of finance. The second part covers corporate financial management, which concerns the finances of an enterprise. The third part is management reporting and analysis, which concerns planning and performance metrics. The final part is decision analysis and information systems, which covers investment and resource decision-making.
The Institute of Management Accountants certifies the CFM exam. It has more than 60,000 professionals nationally as of 2011. The institute's goal is to raise awareness about the roles and responsibilities of managerial accountants. In addition, it provides training and information about duties, including planning, budgeting, business reporting, decision analysis, and risk management. The group also provides the certified managerial accountant (CMA) designation, which currently has more holders than the CFM.
The CPA exam is designated for those who work primarily with public accounting. The primarily components of public accounting are financial statements for investors and tax accounting for the government. Although these areas are critical to the function of a business, they do not encompass all aspects of the accounting needs. Internal resource allocation, planning, and decision-making are also important to the sustainability of a business. For these skills, the CFM is a more appropriate test.