Accounting is one of the more popular career paths in the United States. According to the U.S. Bureau of Labor Statistics, there are an estimated 1.4 million accountants currently practicing. However, there is still stiff competition for higher-level roles.
How do you improve your odds of not simply being hired, but being actively recruited for this profession? A great place to start is with a CPA license or CMA certification. If your undergraduate degree was in accounting, you’ve undoubtedly heard these terms before. However, you may not be clear on how they differ and what makes them truly meaningful.
You can learn more about the CPA vs. CMA by earning an online Master’s in Accounting through the University of Alabama at Birmingham Collat School of Business. The rigorous curriculum and outstanding professors at UAB will prepare you to take the CMA or CPA exam. But first, it’s important to know what the CPA and CMA are and how the two compare and contrast.
What is a CMA vs. CPA?
While there are some similarities between the CMA and CPA, the differences are numerous.
Let’s start with CPA, which stands for Certified Public Accountant. Conferred by the American Institute of Certified Public Accountants, a CPA license is a prestigious designation that confirms your capability and competence in performing certain kinds of accounting tasks. It also makes you eligible to audit publicly listed companies, in effect working as an internal auditor.
Earning a CPA puts you in excellent company. According to the most recent figures available from the AICPA, there are more than 650,000 accountants with CPA credentials. These individuals work in thousands of firms throughout the world. In short, although the CPA license is handed out at a state level, it’s globally recognized.
Only around half of the country’s accountants are CPAs, as it requires time, dedication, and commitment. For example, a prerequisite to taking the four-part exam is the successful completion of 150 credit hours in a higher education program. To maintain CPA certification accountants also need to complete 40 hours of continuing professional development usually every two years. Most states have the same requirements in terms of hours, but there may be slight variations as to how often they must be completed. It depends on your location and your state’s licensing rules.
The Certified Management Accountant designation, on the other hand, is conferred through the Institute of Management Accountants. CMA certification is arguably as prestigious as the CPA. It enables you to work in corporate accounting settings, performing a wide number of mission-critical functions for influential multinational organizations.
Additionally, while the CPA is globally recognized, the CMA may afford you more opportunities worldwide because the IMA is an international organization. That said, individuals with CPAs can and do work for companies all around the globe as well, just in a different capacity. Furthermore, whereas a CPA designation is indicative of competencies geared toward financial analysis, a CMA indicates to an employer that an accountant is capable of making strategic financial decisions.
What are some other differences between CMA vs. CPA?
Ask just about any accountant and they’ll likely tell you that CPA is the gold standard in the accounting world. Therefore, it makes sense that its requirements are more rigorous than for the CMA.
A classic example is the exam itself. The CPA licensing exam is composed of four parts of roughly equal lengths. The CMA is only a two-part exam. The percentage of test takers who pass is slightly different as well. Although it varies from year to year, the passing rate has been around 50% for the CPA nationally, based on the most recent statistics available from the National Association of State Boards of Accountancy. It similarly varies for the CMA, but Robert Half reports the average in the U.S. is roughly 40% for part one and 50% for part two.
Continuing professional educational requirements is yet another way that CPA and CMA contrast. For the former, it’s at least 40 hours per year; for the latter, it’s 30 hours.
Neither the CMA nor the CPA test is free to take. In combination with an IMA membership and exam fees, the CMA exam runs between $1,550 and $3,000, according to the CMA Exam Academy. The CPA is more expensive and can range from $3,000 to $5,000 when including the application, exam, licensure, and other study materials. Some states require aspiring CPAs to successfully complete an ethics exam, which further contributes to price variation.
Can you become dual-certified?
So long as you meet the eligibility requirements, nothing prevents any accounting professional from becoming both a CPA and CMA. Doing so increases the odds of finding a job that you will enjoy by providing you with the qualifications to become an internal auditor, comptroller, or even a chief financial officer. In short, more qualifications equals more options to pursue. Polling done by the Institute of Management Accountants found 76% of CMAs love their jobs.
The question is if you have the appropriate amount of time to commit to two educational programs that are equally rewarding but can also be challenging. For example, when including the classes and credits necessary for a bachelor’s degree in accounting, CPA licensure is a six- to eight-year pursuit. For some, this may take slightly more time; others slightly less.
How much can you earn with a CMA vs. CPA?
Regardless of which certification you select, both CPAs and CMAs tend to be well compensated, as a number of salary surveys have shown over the years. Based on the most recent one by the IMA, the median base salary for CMAs in the U.S. was $100,000 in 2019, up 6% from the previous year. A CPA between 40 and 49 years of age earns a median total compensation of $110,000, the same report found. Many factors can play a role in salary, including state, your age, and experience. Regardless, CMAs and CPA make more in the typical year than accountants without such licensure. In 2019, the median annual wage for accountants and auditors was $71,550, according to the latest data from the BLS.
Which should you choose?
While there are individuals who have both a CMA and CPA, most people either have one or the other. It raises the question: Between CMA vs. CPA, which path is best?
There is no right or wrong answer to this, as it all depends on what your long-term goals are, where your strengths lie, and if you have a particular career path in mind. As noted by Robert Half, much of what CMA does on a day-to-day basis involves examining a corporate organization’s financial well being by serving as its internal auditor. These professionals’ findings may influence the decisions corporate executives ultimately make to maintain or improve sales. Those who seek to climb the corporate ladder within an organization will thus find the CMA certification particularly ideal, because its key skill sets tend to be those preferred by large employers.
On the other hand, if your comfort zone lies with small businesses or you’re considering handling finances for individuals, a CPA designation may be a better fit: CPAs’ responsibilities tend to involve more customer-facing tasks, such as financial reporting, maintaining and updating important documents, and filing taxes.
The working world is highly competitive and employers are constantly on the lookout for individuals with unique skill sets. With an online Master of Accounting from UAB’s Collat School of Business, you can achieve the learning outcomes that can distinguish you from your peers and adequately prepare you for a CPA and/or CMA certification. You can complete the entire course online and also establish networking opportunities so you’re never too far away from a new and exciting career opportunity.
Learn more about the program, including descriptions of some of the courses, by downloading the free brochure.
Recommended Reading:
What Does a Career in Healthcare Accounting Look Like?
7 Reasons You Should Choose Accounting
Sources:
Bureau of Labor Statistics – Accountants and Auditors
NASBA Releases 2018 Uniform CPA Exam Statistics
CPA Accounting Institute for Success
Institute of Management Accountants