CPA vs CMA – Which is the Right Accounting Credential? Most students get overwhelmed about CPA exams and CMA and find it harder to choose between two. But here’s the deal. It all depends on what you want to become. There are few things you need to consider before picking up one of these accounting certifications.
Do you want to join public enterprises after completing your degree? Know that more than 80% join private enterprises. But if you still think, your option is public enterprise, then you should definitely go for CPA. Otherwise, if you want to become an accountant or financial advisor in any private industries, then CMA would be a great option.
Salary wise also there is a huge difference. A CPA earns 15% more than a non-CPA; whereas, a CMA earns 63% more than a non-CMA. But earning is always not everything. You also need to think about job satisfaction and your career interest.
Even if CPA and CMA both are comprehensive certifications, CPA offers more options whereas CMA offers better practical approach in accounting.
Moreover if one student can do both CPA and CMA, they will get maximum benefits. Now, look at other aspects we’ve articulated for you. Read, think and then decide which option suits you best.
The article will flow in this order:
- CPA vs CMA Infographics
- What is Certified Public Accountant (CPA)?
- What is Certified Management Accountant (CMA)?
- Key Differences between CPA and CMA
- Why pursue CPA?
- Why pursue CMA?
Without much ado, let’s get started.
CPA vs CMA Infographics
Reading time : 90 seconds
Lets understand the difference between these two streams with the help of this CPA vs CMA Infographics.
What is Certified Public Accountant (CPA)?
- Once you earn your CPA, you will be able to advise individuals, businesses and organizations to reach their financial goals. People from accounting background or students who have aspirations in accounting should pursue CPA.
- According to the AICPA, it’s said that people who are CPA will earn at least 15% more than the non-CPAs in the accounting and auditing domain and organizations also prefer CPAs over non-CPAs for their expertise in accounting.
- If you complete your CPA, you have the authority to charge as an accountant. CPAs do very well in corporates, but public enterprises are best place to work for CPAs as they master public accounting once they complete their CPA examination.
What is Certified Management Accountant (CMA)?
- CMA is one of the most reputed degrees with international repute which helps you earn much more than a non-certified accountant (often 1/3rd more).
- CMA is the highest qualification in Management Accounting in US and it has presence over 100 countries.
- CMA unlike other certifications in finance domains focus both on management accounting as well as financial management. Thus CMA is more comprehensive and lucrative to the students compared to other international certification.
- The exam is computerized and there are over 100 worldwide centres where you can sit for the exam. To pass CMA you only need to clear two exams and each exam is of 4 hours duration which makes it easy for the applicants.
- If you choose to do CMA, you would be able to fill up the loophole of CPA. CPA has very limited focus on the trade skills which you can cover by studying CMA.
Key Differences between CPA and CMA
There are some key differences between CPA and CMA. Let’s have a glance at them.
- Entry Barrier: Getting into CMA is much easier than doing CPA. CMA doesn’t need 150 credit hours and accounting concentration is much less. In case of CPA, you need to complete 150 hours to get the certification and also immediately after clearing exam, you will not get the license. You need to separately handle the licensing procedure.
- Exam: CPA has four parts exam schedule and not always convenient for students. Whereas CMA has two parts exam schedule and it’s more convenient.
- Salary differences: If you talk about fresher and students who have no experience in the field, usually fetch similar annual salary after completing their CPA and CMA certification. But as we compare the CPA and CMA certification among mid-level managers, the salary difference is often more than US $10,000. And CMA wins the bet in salary. And if we do a comparison of CMA and CPA among people who are about to retire from the industry has almost no difference in salary irrespective of their certifications.
- Approach: There’s also a significant difference between CMA in CPA in their approach of looking at finance profession. CMA is more practical whereas CPA is more comprehensive.
- International Repute: Even if CPA is the most recognized certification of all accounting professions put together, it’s most recognized in USA. In case of CMA, the recognition is not only in the USA, but in also other 100 countries which include both developed and developing nations.
- Administration: If you compare both the websites of CMA and CPA you would see that IMA has better administration than AICPA. IMA shares all the information in detail and also makes it flexible for students to become CMA. But for CPA, processes are much complex and even all the information are not available in the website. Even IMA has better after service than AICPA.
Why pursue CPA?
Having a CPA degree has many advantages over accountants who just have graduate degrees.
- Once you have a CPA degree, you can have the license to work in any sized firms and you would be more comfortable in working in public enterprises.
- You will have expert level knowledge in accounting, auditing and taxation and you will be considered authority in these fields.
- Many job opportunities will open up for you. From handling account payable and receivable processes to handling accounting in big firms would be a piece of cake for you.
- Passing CPA is much easier than passing other certified, internationally recognized degrees. Why? Look at the pass percentages! It’s much higher than CMA.
- It’s being seen that less than 20% people join in public enterprises now-a-days which makes it easier for people who have CPA degree. Having a CPA license allow them to join public enterprises without any hazards.
- Very few certifications offer multi-potential career opportunities as CPA does. If you become a CPA, you would be able work in Auditing, Taxation, Management Consulting, Information Technology and Financial Reporting.
Why pursue CMA?
Over 40,000 members in 40 years cannot be wrong. But here are some of the things for which you should pursue CMA.
- If you choose to do CMA, you will get around 63% more in compensation over all non-CMAs who are attached to accounting profession. It takes more than 3-5 years to get a hike of 63% in accounting jobs as per industry standards.
- Even if most of the people never heard about it, ask industry professionals. In accounting industry CMA is very reputed designation. CMA certification filters out the cream from the mediocre.
- Even if you don’t want to do it, comparison between CIMA and CMA is natural. Yes, the numbers of members of CMA is lesser than CIMA. But most of the members of CIMA are from UK only. In case of CMA, they’ve 40,000 members in 100 countries. And 100 countries don’t only include all the developed countries; rather developing countries like India, China, and Middle East are also included in the list of members.
- As per many industry journals it’s being seen that more than 80% of accountant join private enterprises. Even if CPA is a very worthy degree to have, CMA is more practical as per the industry standards and according to the need of the accounting domain
- There are very few institutes like IMA. IMA makes it easy for CMA students. When other degrees are not offered only by passing exams, IMA designed it in a different way. Students can concentrate on giving exams and then get relaxed about certification.
Other useful comparisons
- ACCA or CMA – which is best?
- CFA vs CMA – What should you choose?
- CFP or CMA – What’s right for you?
- CPA or CFA – What’s right for you?
- ACCA or CPA – What should i choose?
CPA and CMA both have advantages and disadvantages. Thus, it’s difficult to find a right answer for every student. As a student if you’re still confused about what to do, the best option is to do both. If you do both, an amazing opportunity will open up for you.
You will be prepared for both public industries and private enterprises. Opportunities like Auditing, Taxation, Management Consulting, Management & Cost Accounting, Financial Reporting, Financial Decision Making will open up for you.
Remember it’s easy to pass CMA if you work hard. But even if you work hard for CPA, there are many barriers along the way. Getting the license is one of them and it is not issued by AICPA. Choose according to your career goals. But if you want the most lucrative option, pursue both.