If you have ever tried to lose weight, or know someone who has, you are probably aware that there are a lot of different diets and weight loss programs that a person can choose, and that advice from friends can add even more “options” for trying to lose weight. There are diets that do not allow fat, and some that do allow fat. There are some that exclude carbohydrates, and there are some that allow them. Some people say that you should not eat after 6:00 p.m, or maybe 9:00 p.m. Other people say that certain foods should not be combined in the same meal and yet others say that specific foods should be combined. Some diets and advice are even contradictory. How is a person supposed to lose weight?
Cash as Calories
For companies, especially small companies, cash is the critical measure, just as calories are for a person trying to lose weight (except that a business wants to have more cash in than out). There are a lot of ways that a business can be measured or evaluated – numerous ratios, formulas, and key performance indicators that can be calculated for a small business. But, for the health of a small business, the best thing to look at is how much cash comes in and how much cash goes out. Maybe the company has great ratios, high ROI, and other metrics that show the company is doing well, but if more cash is going out than coming in, then the company has a problem. When small companies lose sight of cash flows and start to focus on other things, the company is at risk of going bankrupt even if “things look good” when looking at other measures.
Burn more calories than you eat
While some of the diets we read about may have some health benefits that are not weight-related, the most straightforward diet that most people can use to lose weight is simply to burn more calories than you eat. This means that you can start losing weight by eating less, exercising more, or a combination of both.
I do not want to imply that the diets that have books written about them, are featured in magazines, or are on TV do not have some truth to them. It may be better for your body if you limit your fat or carbohydrate intake. It may be better if you do not eat before bed. It may be better if some foods are consumed separately, or together. But, for me, the bottom line to losing weight is how many calories you burn and how many you consume.
I am certain that for serious athletes and those who are trying to fine-tune their body to be in the best shape possible, some of these more specific and complex dietary rules may be necessary. However, those people are beyond counting calories – they are trying to balance the different nutrients that are used and different types of energy for different exercises and they are trying to do things that 95% of the people who want to lose weight do not care about. (After people lose weight, their next step may be to fine-tune their body, but losing weight is the critical first step.) For the vast majority of people who are trying to lose weight, the best place to start is eating fewer calories and burning more. In the case of losing weight, keeping it simple may be the best advice for many of us.
If more cash is going out than coming in, then the company has a problem
For a company (and in particular a small company), cash is the same thing as calories are for a person trying to lose weight. There are a lot of ways that a business can be measured or evaluated – numerous ratios, formulas, and key performance indicators that can be calculated for a small business. But, for the health of a small business, the best thing to look at is how much cash comes in and how much cash goes out. Maybe the company has great ratios, high ROI, and other metrics that show the company is doing well, but if more cash is going out than coming in, then the company has a problem. When small companies lose sight of cash flows and start to focus on other things, the company is at risk of going bankrupt perhaps even if “things are good.”
Yes, there are many more advanced metrics than cash flow to measure business performance. For established and mature businesses, maybe those metrics are important to fine-tune their performance and to try to get the most out of the assets invested. But, just like a person and their weight, the best way for a company to improve its health in the short term is to increase cash inflows and decrease cash outflows. After the company has a positive cash flow, then it can turn its attention to more of the specific and detailed measures of a business, just like a person can fine-tune their diet once they have started the process of losing weight by burning more calories than they consume.
Brian Hock, CMA, CIA
A number of years ago at my sons’ Taekwondo class I watched two exchanges that I still remember that remind me about how important a person’s name is.
The first occurred when a boy about 5 years old came in. The teacher, a 7th-degree black belt, asked what his name was and he replied in a voice too quiet to be heard clearly. “Jonathon?” the teacher asked. Again, a quiet answer from the boy. “Jonavon?” asked the teacher. Then the boy’s mother answered for him, “Donovan.”
The teacher looked at Donovan and said, “Donovan, that is your name. When someone asks you your name, shout it out. DONOVAN!” And the little boy, with a smile, yelled, “DONOVAN!”
Our name is the first way that people identify us. I hope that all children learn to be proud of their name and who they are. We should say our name with pride when someone asks.
“It means that I care enough about you to learn your name”
Ten minutes later, the same teacher was beginning a class. Of the 10 students there, more than half were there for the first time. He told them that he had taught for many years and sometimes had trouble remembering names, so he asked what it meant if he asked someone what their name was. A small boy answered, “It means that you care enough to learn our name.” “Right!” the teacher replied, “If I call you by the wrong name, you need to tell me. If you don’t, I will call you the wrong name until you graduate from college. Let me know your name.”
That concept, “It means that I care enough about you to learn your name” is so important. How many people do you see every day, or maybe even work with, whose name you do not know? I challenge everyone to learn the name of one person this week. Taking it one more step, imagine how many more people we would all know if we learned someone’s name every day.
Let’s start right now. “Hello, my name is Brian, what is your name?”
Brian Hock, CMA
A Personal Counselor or Mentor is something that some exam prep providers include as a benefit of choosing their materials. While I agree that it is important that a review provider answer your questions as part of their support, there is no practical reason that you need to have a personal counselor as part of your exam preparation process.
Why do I say this? Because the exam that you take is not personal to you.
Everyone takes the same exam covering the same material tested at the same level of depth. The exam does not adapt its depth based on your background or experience. To say it one more time: EVERY candidate needs to know the SAME material at the SAME depth for the exam.
Because every candidate needs to know the same information, I am not sure what a personal counselor can do that you are not able to do for yourself. You can look at the results of your study sessions and determine how well you know a topic. In fact, you know more than anyone else can about how well you know a topic.
For example, let us say that there are 10 questions, and you know with certainty 6 of the 10 questions. That is 60% proficiency, but that is not enough and you need to study that topic more. Even though you do not know the other 4 questions, statistically you will get one of the four correct – giving you a 70% score. If you get lucky and guess two of those four correctly, you will score 80%, and someone else just looking at the percentage probably will say you are proficient and can move on to the next topic. But you know the truth, that you really are not 80% proficient on that topic.
In terms of guiding you through your studies, a personal counselor is not needed for this, either. Assuming that the study materials are set up properly with a good study plan, only you know best how much time you need to spend on each topic. When you are reading the book, watching videos, and/or doing practice questions, you know how well you know the topic and how much longer you need to spend to feel comfortable.
I believe that there are two essential support functions that actually add value to your studies:
- A detailed study plan that helps you go through the materials, points out the main topics and can be tailored to your pace of learning and time frame for study.
- Subject matter experts who can answer your questions about anything in the materials while you are studying. Whether it is a concept in the book or a question that you just can’t figure out, a knowledgeable person who is experienced in that exam should be available to answer your questions in a timely manner (one business day).
All of this to say, when you are making a decision about your study materials, be sure to look for things that actually add value to your studies, and not just what sounds good. At HOCK, we have continually refined our materials and processes since 2003 so that we can offer you the most comprehensive materials and support without any unneeded and potentially expensive extras.
HOCK Exam Prep with unlimited access and teacher support:
In my last two blogs, I have written about how review course providers and the certification-issuing organizations add value to their certifications. In this blog, I will look at what you should do in order to maximize the value that you get from having the certificate.
Conduct yourself in a professional manner at all times
Perhaps the most important thing that you can do is to conduct yourself in a professional manner at all times. As I wrote earlier, most certificates get their value simply because they are valued by the business community. Certificates have value because the people who hold the certificate create value for them. Every individual benefit from all of the others who hold the same certificate. In order to keep this value, each holder needs to act so that the business community as a whole will continue to value that certificate. For example, everyone who is a CIA is connected to everyone else who is a CIA. When a colleague finds out that you are CIA, their first impression of you will be based on what they think of the other CIAs that they know. If enough individuals behave poorly and unethically the “brand” that is CIA will lose value. So, if you want your certificate to retain or grow its value, you need to behave in a way that will bring value to that certificate and everyone else who holds it.
Have a responsibility
In addition to holding yourself to the highest standards of behavior, you also have a responsibility to hold fellow certificate holders to a similarly high standard of behavior. When others are acting in a way that does not bring value to the “brand,” you need to work with them to change their behavior. Even though any certificate can survive “a few bad apples” in the profession, everyone needs to work to make certain that there are as few as possible.
Market the certificate
In order to maximize the value of your investment (in both time and money), you also need to market the certificate, for example, help people know what the certificate is and what the requirements are to obtain it. If an HR person in your company is not familiar with the CMA, give them information about it. That information, coupled with your behavior, will help them understand the value of CMA. Also, use the letters of your designation on your business card, your CV, and anywhere your name is used.
Become active in a local Chapter
If you are able to, you should also become active in a local Chapter of your professional organization. Chapters help to grow the profession and are a way of letting the larger community know that the certification has value. While it may be difficult to see any specific, direct benefit from attending a Chapter event, you need to remember that you are part of a larger profession and that you will benefit indirectly from the success of the organization. Professionals before you built a brand that you are benefitting from, and you need to be certain that the professionals who come after you will be able to benefit from your professional organization in the same way you have.
I encourage you to be proactive in doing these things (and more) because your certificate will only have as much value as the effort that everyone puts into it.
Brian Hock, CMA, CIA
In my last blog, I wrote about the value that review course providers provide for a certification. In this blog, I will look at the value that is brought to a certification by the organization that administers the exam and awards the certification.
Obviously, the organization that offers the certification provides value to it. But, it is critical that the certification continues to hold its value and even increases in value. Remember that because most certifications gain their value only because the business community desires them, it is imperative that the organizations work to provide ongoing value. Aside from giving the certificate itself, some of the things that the organization must do are:
Keep the syllabus current
Every few years the organization should evaluate the content of their exams to make certain that it continues to be relevant.
Provide sufficient information about the content of the exam
The syllabus that they provide should be detailed enough to allow candidates (and material providers) to know what is on the exam without being so detailed that it is essentially a list of the questions. (I would add that the IMA does a spectacular job with the syllabus for the CMA Exams.)
Ensure that the exam is challenging
If the pass rate is too high, the certification loses value because it is assumed that anyone can pass. If the pass rate is too low, nobody attempts it because the return on investment is too low. For example, when the DipIFR (Russian) exam was first started, the pass rate was around 15% and the exam almost collapsed because of the low pass rate.
Maintain its own ethics surrounding the qualification
The exam creation and grading process must be above reproach. There should be controls and systems in place to ensure that if a person passes the exam that the world knows that this person actually passed the exam honestly and fairly.
Provide a fair and level field for all providers
When an examining body is involved in materials preparation and sells their own materials, this weakens the certificate because it draws into question the grading process. Even if there are controls in place and independence between the materials creation group, the exam creation group, and the grading process, there is still the potential for the appearance of a conflict of interest.
Require some form of Continuing Education
(It has different names in different organizations) So that their certificate holders maintain relevant knowledge.
Provide value to its members through things other than the certifications
Such as conferences, publications, webinars, networking opportunities to its members, or any number of other benefits that it can provide. If the only value that it provides is in the exam itself, the organization will have difficulty maintaining its membership and attracting new members.
While there are a lot of things that professional organizations need to do in order to maintain and build the value that their certificate has in the market, it is essential that they do these things because without the certification having value, fewer people will join the organization.
I am certain that this list is not complete. What are some of the other ways that your certifications (that you have or are in the process of earning) and their supporting organization could add even more value to your career?
Brian Hock, CMA, CIA
Professional Certification – Requirement or Preference?
A professional certification gets value from one of two sources: either it is required by law or regulation, or the business community prefers its employees have the certification, even if it is not required by law. An example of the first type is the CPA certification in the United States, which is required by law in order for an individual to sign an audit report or prepare income taxes for another party. An example of the second type is the CPA certification in countries outside the United States. In other countries, a CPA license is not required by law for any specific activity, but the business community values it, and therefore being a CPA is valuable.
Most international certifications fall into the second category. One of the reasons for this is that most internationally recognized exams are in English and therefore they can be required by law only in countries that speak English. In non-English-speaking countries, the exam gets value because it is desired by the businesses there.
While it may not seem obvious, there are a number of groups that contribute to the value that a certification has in markets where the certification is not required by law. In this blog, I will write about one of them, and I will write about others in the future.
Review Course Providers
The group that I want to write about now is what I will call Review Course Providers (RCPs). They may be called different names in different countries, but these are the companies that deliver live-taught courses for candidates to prepare to pass the exam. RCPs are different than Material Providers (MPs), who only provide materials for self-study. For example, HOCK international is an MP, whereas HOCK UAE is an RCP, where live courses are offered.
RCPs play a critical role in the development of value for a professional certification in a few different ways:
- When there is an RCP for a certification, it shows to prospective candidates that the certification has value. If there is no value to the certification, there would not be a company providing training locally.
- RCPs play an important role in marketing the certification because they are marketing the certification as well as their own courses. For the organizations that offer certifications, RCPs are a critical element of the expansion of the certification to new areas.
- RCPs help keep pass rates higher. If the pass rate for a certification becomes too low, fewer people will attempt it because there is not a high enough chance to get a return on their investment. Or, if the pass rate is too high, there is also a decrease in candidates because both individuals and businesses perceive that it is too easy and does not have any value.
- RCPs also give credibility to the certification by demonstrating that the exam is independent. When the organization that gives the exam also provides training material, there is a perception that the exam is not serious or rigorous because the same organization is in charge of all of the steps of the process. It is a bit like the segregation of duties – ideally, one organization creates the exam and grades it, and other organizations provide the training. When the examiner is also a training provider there is a conflict of interest that decreases the value of the certification.
Whether or not you are using or used an RCP in your preparations for the exam, you should say a word of “Thanks” to the RCPs in your area; they have helped create and sustain the value of the certificate that you have earned or are in the process of earning. If you don’t know if there are any in your area, we have a list of RCPs using HOCK materials on our website.
You can send a short “Thanks” to your RCP as a comment below – let them know that they are appreciated!
Brian Hock, CMA, CIA
The CMA Exam results came out last week and while there were many candidates who were successful, there were also some candidates who did not pass their exams. If you are one of these candidates, I encourage you to continue your studies and take a realistic look at how much you think you need to study to pass the next time you take the exam. Based on this assessment, you can determine when you should plan on re-taking the exam. As a general guideline, if you scored 320 or above, you are close to being ready to pass, and should probably plan to take the exam as soon as you are able to. If you scored less than 320, then you may want to plan a few more months of studying before you take the exam again.
Do you need a second Test Bank?
After results come out, we get requests from candidates who are looking to purchase a second Test Bank to study from. It is my experience that a second Test Bank does not add a lot of value to your preparations. All of the main providers use released CMA Exam questions as the foundation of their Test Banks. We all add some of our own questions to the Test Bank as well, but the majority of questions between providers will be the same. Therefore, even if you purchase a second Test Bank, you will not be getting a second set of questions to prepare with.
What additional materials should you consider?
If you are looking for additional study materials, I often recommend that you purchase Videos, especially if you do not have Videos already. While there are differences between the Textbooks of the main providers, a second Textbook is still a book that you read. Some candidates learn more effectively by listening or watching, so if you purchase Videos, you are getting a new way of learning the material, and a new perspective on that material.
Do you already have all of the materials from a provider?
If you already have a Textbook, Videos and a Test Bank and are still looking for additional materials, you should look to purchase the study tool that you think will be most beneficial to you. If you did not always understand the Textbook that you have read, another Textbook will bring value to you. If you did not like the Videos that you have, someone else’s Videos will provide greater value to you. If you have a Test Bank that does not have answer explanations to the incorrect answers, another Test Bank with incorrect answer explanations will be very helpful to you.
Use free samples before purchasing
Before you purchase a second of any study tools, make certain to use the free samples that all of the main providers offer so that you can see the Textbook, Videos and/or Test Bank you are looking to add.
Don’t give up!
While we would always prefer to pass an exam on our first attempt, the global pass rate for the CMA Exams is only about 50%. If you are in the position of having to take the exam again, I encourage you to keep striving for your goal of becoming a CMA. And while additional study tools may be helpful, make certain that you think carefully about what you already have and what would be helpful to you. This analysis will help you make good decisions about what additional investments you need to make to pass the exam on your next attempt.
Brian Hock, CMA, CIA
CMA Exam Videos are on 40% sale right now. Check out the free samples here: CMA Exam Videos.
Code of ethics
Most companies and professional organizations have a Code of Ethics that employees and members must follow. It is important to remember that many of those ethical guidelines we have at work and in our professional lives are also important for us outside of work. When individuals act contrary to a Code of Ethics in their personal lives, people can also get hurt – just as in our professional lives.
Conflict of interests
Most Codes of Ethics require the disclosure of potential conflicts of interests, which arise when a person may be influenced in their decision as a result of an interest that they have that is in conflict with the decision that they need to make for their company. Conflicts of interest are not just at work; they are in our personal life, too, and can involve our friends, neighbors, relatives and people we have never met. Unfortunately, not everyone is motivated by a Code of Ethics in their personal life like they should be in their professional life.
For example, if someone asks me what company they should use to host their website, I have a potential conflict of interest because my brother owns a company that hosts websites. If I were to recommend my brother’s company, the question becomes whether I am recommending it because it a good web hosting company, or because it is my brother, or maybe even because I might receive a commission for every person that I refer.
It is not that conflicts of interest are automatically bad. However, an undisclosed conflict of interest is unethical, and potentially harmful. If I recommend my brother’s company and I do not tell the person that it is my brother’s company that I am recommending, I have potentially caused that person harm because I have not given them all of the information they need to make an informed decision. However, if I tell them that my brother owns the company, then I have not done anything to cause that person harm.
The disclosure of this conflict of interest may even be helpful to my brother. If I have acted and worked in a way that causes this person to respect me, the fact that it is my brother’s company may be the reason that the person chooses my brother’s company. By behaving ethically and professionally, my recommendation means more, and the fact that I am related to the owner of that company is a positive thing for the person who asked.
Ethics in our personal lives
In our personal lives it is also important to disclose conflicts of interest. I live in a state that recently deregulated its electricity market, which means that I am now able to choose which company I want to produce the electricity that I use. Needless to say, I was swamped with phone calls and mail from the different companies that wanted me to choose them. One evening I was talking to my neighbor and asked if he had chosen a company and how happy he was with his choice. He told me which company he had chosen and that he was happy.
Later, after I had made my selection, I found out that if I recommended others to select the company that I had chosen, they would pay me $50 for each person I recommended and signed up. When I read this, it made me wonder about my neighbor – did he make his recommendation because he was happy, or because he was going to get $50 if I selected the same company that he did?
So, when someone gives you a recommendation, (especially when it is a website giving you a recommendation), you should ask yourself if they have a conflict of interest that they are not telling you about. It might just change your mind about what decision you should make in a particular situation.
Brian Hock, CMA, CIA
Are you taking the CMA exam in May or June? Join the CMA Crash Course and MCQ Practice Sessions for only $108.
In this post, we look at preparing for an exam using some of the same concepts that you might study while preparing for the CMA (Certified Management Accountant) or CIA (Certified Internal Auditor) Exam.
Planning is a topic covered in many professional exams because of how important planning is to a business. Without long-term planning, a company does not know what it is trying to accomplish. Every department within a company needs to have a plan too so that it can do what it needs to do to help the company achieve its objectives. Even individual employees need to have a plan so that they can help their department achieve its goals. With proper planning, a company can ensure that all of its components are moving in the same direction.
Just like a company, a candidate for a professional exam also needs to have plans, which we can break down into Long-Term, Medium-Term, and Short-Term.
The first plan that you need is a strategic plan that encompasses what you would like to be doing in 5 years in your career, and which professional certification will best help you achieve your plan. You need to know:
- What are the certifications in your chosen career?
- What are the certifications most highly valued in the country where you want to work?
- Which certifications does your company want for its employees?
Once you have selected a certification, you need to find determine:
- Do you have the necessary education required by the exam? If not, how will you get it?
- Do you have the necessary experience in order to be certified? If not, where can you achieve the experience?
- What is the syllabus for the exam and what will you need to study to pass the exams?
Then, you are ready to create a medium-term plan to pass the exams and get any education or experience that you need.
The medium-term plan should set up a time frame for when you will pass the exams and get the needed education or experience if you don’t already have them. You need to find out what the average time is for preparing for the exam, and when the exams are offered.
For example, you may decide that it will take you 6 months to prepare for each part of the CMA Exam, and so you determine that you want to take Part 1 in early January and Part 2 in late June. Or, maybe you decide that it will take about 3 months to prepare for each Part of the CIA Exam, so you plan to take them in January, April, and July.
You should also decide the order in which you will take the different Parts of the exam. I usually recommend that you start with the Part that you feel will be easiest for you.
You are now ready to start your short-term plans, including making a study schedule for each week. You should know when during the week you will be studying and set these times aside. If you are going to study Tuesday evening for 3 hours (for example), then when someone asks you to do something Tuesday evening, your answer should be that you are busy. Your scheduled study times should be committed appointments that you will not cancel except for an emergency.
Having a schedule will make all of your time less stressful. If you know when you will study, then in the time that you are not studying you can relax without thinking that you should be studying; your study time and your personal time can stay separate.
Just like a plan that helps a business achieve its goals, proper planning will make achieving your goal of earning a certification much easier.
What are some of your planning strategies to help you stay on track with your studies?
Brian Hock, CMA, CIA
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Many of you have been asking me what you can do to improve your chance of passing your CMA Exam. In this post I talk about risk management and what you can do to help ensure your success on the exam.
Start With Yourself
The first step of risk management starts with yourself. You must know why you are taking the CMA exam (or any professional exam). It can be for a raise, a better job, or because you want to learn the material (the exact reason does not matter). What matters is that you have a specific reason. Passing the exam requires a significant time commitment and if you do not know why you are doing it, you will find many reasons to not study. (See: The Only Question You Need to Answer to Pass the Exam)
Have a Plan
Second, you need to have a plan for studying and passing the exam. As the saying goes, “If you fail to plan, you plan to fail.” I cannot overemphasize this point—make a schedule so you know when you are studying and when you are not studying. (See: Exam Tip: Scheduling for Success and Peace of Mind)
Use Your Study Materials
Third, use your study materials. You cannot learn from your materials if you do not study them. This means that you not only read the textbook, but you study the examples and solve every practice question, both multiple-choice and essay. If you have flash cards, use them. We created flash cards for a reason—they are a very helpful study tool. Our videos are also very helpful and reduce the amount of time needed to study and make the study process a bit easier for most people.
Fourth, ask questions! As you are studying, certain concepts will be unclear. When this happens, do not ask Google. The CMA exam has very specific content, and very little of what is on the Internet is specific for the CMA exam. A lot of what you find on Google will also be wrong information. You could also just “hope” that they do not ask about a particular topic on the exam, but this is very risky because you cannot predict what the specific topics your exam will cover. Your best option is to ask questions. Please, ask questions! At HOCK, we provide unlimited support to all candidates who purchase our materials because we want you to pass the exam. If the company that you bought materials from does not support you by answering questions, let them know that they should.
Share the Risk With Another Party
Finally, you can share the risk with another party, which is what car, home, or health insurance do. You hope that you do not need to use the insurance, but if do, you’re very glad that you have it. You can do this for the CMA exam with HOCK’s “You Pass or We Pay” Guarantee. If you follow our program and do not pass the actual exam, HOCK will pay for you to retake the exam. You hope that you do not need to use it, but if you do, you will be very glad that you have it.
Brian Hock, CMA, CIA
We are thrilled to introduce a new Live Step-by-Step CMA Part 1 Course! The course will cover the entire syllabus step-by-step including expert teaching, answering practice questions, and strategies for writing essays.