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    Hello and welcome to our guide on financial certifications: CPA vs CMA.

    By the end of this article, you will learn the differences between the two and have enough knowledge to choose what career path and certification to choose.

    We will have an in-depth look at the following topics:

    What are the Skills and Prerequisites for a Certified Public Accountant (CPA)?
    What are the Skills and Prerequisites for a Certified Management Accountant (CMA)?
    What are the Similarities Between a CPA and CMA?
    What are the Differences Between a CPA and CMA?
    Should You Go for a CPA or a CMA?

    The world of finance is always in high demand for skilled professionals that can help the operation and growth of various companies in different industries.

    Adding prestigious credentials and specializations to your resume is a great way to stand out from your peers, learn new skills that will make you highly employable, and build your network with other licensed professionals.

    So stick around to know which set of letters – CMA vs CPA – to add to your name and list of professional credentials to boost your accounting career!

    What are the Skills and Prerequisites for a Certified Public Accountant (CPA)?

    CPA Areas of Expertise

    The CPA has the following skillset and knowledge areas:

    • Accounting and auditing
    • Finance operations management
    • Corporate governance
    • Knowledge of US accounting and business law

    CPA Requirements, Exam, and Certification Maintenance

    All CPA aspirants must undergo an application process with the American Institute of Certified Public Accountants (AICPA) that comprises application requirements and review, experience requirements, an exam, and certification maintenance.

    To proceed with the application process, the candidate must have the following general qualifications; however, requirements can vary from state to state:

    • A bachelor’s degree or equivalent (depending on the state, you need a degree in accounting or complete a finance-related program)
    • 150 total semester hours of college credit, which fulfill the following average subject requirements:
      • 24 to 33 semester hours in accounting-related courses (excluding introductory courses)
      • 24 to 27 semester hours in business-related courses (excluding accounting subjects)
      • Three semester hours in business law
    • A passing score of a minimum 75 on the Uniform CPA Exam, to be completed within 18 months,
    • A passing score on the Professional Ethics Exam for CPAs, and
    • At least one year of work experience in a general accounting role, under the supervision of a CPA professional with an activated license.

    To get a more accurate picture of pre-requisites, you need to inquire at the state boards of the specific state where you would like to be licensed.

    The Uniform Certified Public Accountant Examination, also known as the CPA Exam, is divided into four sections which last four hours each, totaling a 16-hour exam:

    Auditing and Attestation (AUD)

    The AUD section tests the candidate’s skills and knowledge in the completion of audits and attestation engagements, preparation, compilation, and review engagements (of the issuer and non-issuer entities), up to the standards of various accounting authorities.

    This section covers the following content areas:

    • Ethics, Professional Responsibilities and General Principles
    • Assessing Risk and Developing a Planned Response
    • Performing Further Procedures and Obtaining Evidence
    • Forming Conclusions and Reporting

    Business Environment and Concepts (BEC)

    The BEC section tests the candidate’s skills and knowledge in the completion of the audit, attest, accounting, review services, tax preparation, financial reporting, and other responsibilities of CPAs within their roles in an organization.

    This section covers the following content areas:

    • Corporate Governance
    • Economic Concepts and Analysis
    • Financial Management
    • Information Technology
    • Operations Management

    Financial Accounting and Reporting (FAR)

    The FAR section tests the candidate’s skills and knowledge in completing financial accounting and reporting frameworks for entities such as businesses, non-profits, and state and local governments.

    This section covers the following content areas:

    • Conceptual Framework, Standard-Setting, and Financial Reporting
    • Select Financial Statement Accounts
    • Select Transactions
    • State and Local Governments

    Regulation (REG)

    The REG section tests the candidate’s skills and knowledge of US federal taxation law, US ethics and professional responsibilities relevant to the tax practice, and US business law.

    This section covers the following content areas:

    • Ethics, Professional Responsibilities, and Federal Tax Procedures
    • Business Law
    • Federal Taxation of Property Transactions
    • Federal Taxation of Individuals
    • Federal Taxation of Entities

    The CPA exam comprises multiple-choice questions, task-based simulations, and written communication tasks.

    The Professional Ethics Exam for CPAs is another exam that CPA aspirants must take after they have passed the CPA Exam properly and is a requirement of most state boards.

    It is a 40-question exam that focuses on the professional conduct and accounting rules stipulated by the AICPA and tests candidates on their knowledge of professional ethics in the accounting profession.

    After passing both exams and getting your CPA license, you must maintain the license by completing the required Continuing Professional Education (CPE) courses for the required credit hours.

    You will also need to renew the license according to the correct date.

    Maintaining your CPA license can vary from state to state, and exam fees are $250 for each section, for a total of $1,000 total exam fees.

    What are the Skills and Prerequisites for a Certified Management Accountant (CMA)?

    CMA Areas of Expertise

    The CMA has the following skillset and knowledge areas:

    • Strategic financial management
    • Financial planning
    • Risk management
    • Cost management
    • Budgeting
    • Financial statement analysis
    • Business decisions and decision analysis

    CMA Requirements, Exam, and Certification Maintenance

    All CMA aspirants must go through an application process with the Institute of Management Accountants (IMA) that comprises application requirements and review, experience requirements, two exam sections, and certification maintenance.

    To  proceed with the application process, the candidate must have the following eligibility qualifications:

    • An active IMA membership,
    • A bachelor’s degree from an accredited college or university program, or having a relevant certification,
    • A passing score for Part I and II of the CMA Exam,
    • Comply with IMA’s Statement of Ethical Professional Practice, and
    • At least two years of work experience in a management accounting or financial management role.

    The CMA exam is made of two distinct exam sections and covers 12 core competencies:

    Exam 1: Financial Planning, Performance, and Analytics

    The first part of the exam consists of 100 multiple-choice questions and two 30-minute essays totaling four hours in length.

    The areas covered in this exam include:

    • External Financial Reporting Decisions
    • Planning, Budgeting, and Forecasting
    • Performance management
    • Cost management
    • Internal controls
    • Technology and analytics

    Exam 2: Strategic Financial Management

    The second part of the exam consists of 100 multiple-choice questions and two 30-minute essay totaling four hours in length.

    The areas covered in this exam include:

    • Financial Statement Analysis
    • Corporate Finance
    • Decision Analysis
    • Risk Management
    • Investment Decisions
    • Professional Ethics

    CMA Exam fees are $460 per exam section, totaling $920 for the examination fees.

    Like most certifications, there are continuing education requirements that you need to fulfill to maintain your CMA once you’ve passed.

    What are the Similarities Between a CPA and CMA?

    Why do these two titles often get mistaken for one another?

    It’s essential to look at the similarities between the two programs to understand why.

    Expanded Expertise in Finance

    Whichever way you go, you are expanding your recognized finance skills and proving that you have a good understanding of the industry and its standards.

    Both CMA and CPA certification is respected among professionals, and you can show that you are on a determined financial career path – setting yourself apart from the Certified Financial Analysts (CFA) and Certified Internal Auditors (CIA). 

    You will be fit to take on several roles in the finance world, depending on how much expertise you’ve stacked in the area, or at least a high level of personal interest in the subject.

    Salary Expectations

    The AICPA and the IMA collect data and launch an annual salary survey that helps its members understand how valuable their license or certification is.

    According to the survey, a licensed CPA in the United States earns $119,000 annually, and a licensed CMA in the United States earns $105,000 annually.

    While it may seem that CPAs have the edge over CMAs, there are also various factors to consider that contribute to fluctuations between the two figures.

    First off, salaries can vary from state to state – while the averages have been presented, it’s difficult to say that this is a consistent observation from each state, especially when time has passed.

    Second, the difference between the two salary figures is around $14,000, and the average salaries may or may not include benefits and bonuses.

    At the end of the day, the figures are very close to each other and may be affected by things like the state you are practicing in and the number of years of accounting experience you already have under your belt.

    What are the Differences Between a CPA and CMA?

    While finance is at the heart of both certifications, there are more differences than similarities between the two programs.

    Skill Set

    An obvious and significant difference between a CPA and a CMA is that they deal with two different roles altogether.

    A public accountant is different from a management accountant.

    A public accountant is focused on the general accounting of a business and how to efficiently and adequately report a company’s financial standing according to enforced standards.

    A management accountant is focused on strategy and growing the business based on data insights extracted from their financial analysis.

    Career Paths

    Don’t be fooled by seeing the title of “accountant” and mistaking one role for another.

    Because of the different skill sets they have, they have different career paths.

    Certified public accountants can become:

    • Public accountants
    • External or internal auditors
    • Accounting managers
    • Tax accountants
    • Forensic accountants
    • Controllers
    • Consultants

    Certified management accountants can become:

    • Management accountants
    • Cost accountants
    • Corporate controllers
    • Financial analyst
    • Portfolio manager
    • Chief Financial Officers (CFOs)
    • Consultants

    Of course, your certification does not limit you to a set career, but these are the paths that take advantage of the education you worked for on your journey to be a licensed professional.

    Cost of Certification

    The prestige of the CPA and the CMA can be comparable to the money, time, and effort it takes to accomplish the certification process.

    Cost of CPA

    The cost of getting a CPA license is as follows:

    • Application Fee: $50 – $245
    • Exam Fee: Total of $1,000 for all four sections
      • AUD Fee: $250
      • BEC Fee: $250
      • FAR Fee: $250
      • REG Fee: $250
    • Registration Fee: $30 – $150
    • CPA Ethics Exam Fee: $149 for members and $189 for non-members
    • CPA License Fee: $50 – $500

    These total a minimum spend of $1,279 to a maximum spend of $3,529 for the application and certification process.

    Since the fees connected to the CPA license can vary significantly from state to state, it’s difficult to pin down a specific rate, but the ranges are presented above.

    Some states like Oregon and Wisconsin have developed fees that combine the application and exam fee, so consider that when budgeting for the CPA license.

    Not included are the Continuing Professional Education Course Fee, which has a variable cost based on the 40 annual CPE units requirement.

    Cost of CMA

    The cost of getting a CMA certification is as follows:

    • IMA Professional Membership and Application Processing Fee: $245
    • CMA Program Entrance Fee: $280
    • CMA Exam Fee: Total of $920 for both sections
      • Part 1: Financial Planning, Reporting, and Analytics Fee: $460
      • Part 2: Strategic Financial Management Fee: $460

    These total to a maximum spend of $1,445 to become a member of IMA and apply for the CMA certification.

    Members of academia and students can get significant discounts on the membership and application processing fees.

    Not included are the Continuing Professional Education Course Fee, which has a variable cost based on the 30 hours of CPE with 2 hours of ethics training requirement.

    Should You Go for a CPA or CMA?

    If you are not sure about where your career in finance and accounting is headed, you will likely have some difficulty deciding between the two certifications.

    After all, as mentioned in the article, the certifications serve very different skill sets and career paths that are slightly related.

    Here are some reasons you might pick one certification over the other.

    Recognition

    Even before you’ve read this article, you’ve probably heard of a CPA first, then learned about a CMA after.

    CPAs are more recognized in popular culture, and more people understand what this certification and career path mean.

    However, just because CPAs are more well-known and recognized in the world outside of business doesn’t mean anything – it will be more important for your colleagues who will understand either certification, anyway.

    Ease of Certification

    How easy is it to secure CPA and CMA certification?

    Fortunately, both the AICPA and the IMA publish some information about the passing rates for their exams and certifications.

    For 2021, the AICPA published the following results for each part of their exam:

    • Audit & Attestation Pass Rate: 47.98%
    • Business Environment and Concepts Pass Rate: 61.94%
    • Financial Accounting and Reporting Pass Rate: 44.54%
    • Regulation Pass Rate: 59.88%

    For 2020, the Insitute of Certified Management Accountants (ICMA), an arm of the IMA, released results for the beginning of the year for each part of their exam:

    • Part 1: Financial Planning, Reporting, and Analytics Pass Rate: 45%
    • Part 2: Strategic Financial Management Pass Rate: 45%

    As one can observe, the pass rates for both exams are comparable in that about half of the people who take the exam pass it.

    Of course, we need to consider those who need to retake the exam and other such factors.

    The insight from this data is that it is possible to fail the exam, and thankfully there are rules in place for retaking them to pass the certification.

    Budget

    A big part of your decision could involve how much money you can spend on your certification.

    This does not just involve the application costs, and you must factor in annual expenses like license renewal, test retake fees, and even continuing education unit requirements.

    As previously covered in the article, you pay a hefty sum for acquiring a CPA license that you need to practice in the US.

    Conclusion

    Though it may be easy to confuse these two popular licenses, they are very different from each other.

    The CPA and CMA have distinct career goals and skill sets that many professionals need to choose from.

    You can choose to be a CPA if you prefer to crunch numbers, complete reports, and perform the operational accounting activities of a company or organization.

    You can choose to be a CMA if you prefer to take a strategic, decision-making role at your company and organization, focusing on a business strategy derived from your financial data analysis.

    Wading through the world of accounting certifications may be tricky and require some personal and professional assessment, but it is a worthwhile effort for your professional growth in the industry.

    FAQs

    References

    AICPA

    AccountingEdu.org

    NASBA

    IMA

    I Pass the CPA Exam

    IMAnet CMA Handbook

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