In modern times, there are several finance and accounting students who want to work abroad as highly paid accountants who are not bound by specialties. As finance and accounting expand their base and find roots in all industries, professionals with accounting experience will want to explore the diverse opportunities this field offers. State-of-the-art accounting skills, in-depth knowledge of international standards, and strategic thinking are very important here. However, these skills are difficult to master if you want to take a formal accounting course. Also, according to research, the US CPA or US CMA should be considered ideal courses. Explore all the differences between the two accounting courses to understand which one is right for you.
Table of Contents
- What is a Certified Public Accountant (CPA)?
- What is a Certified Management Accountant (CMA)?
- CMA vs CPA
- Educational Qualification or Eligibility Requirement
- CPA Exam
- CMA vs CPA: Exam Cost
- CMA vs CPA: Conclusion
- FAQs
What is a Certified Public Accountant (CPA)?
A Certified Public Accountant (CPA) is an individual licensed to perform public accounting duties. This can be anyone from a tax or accounting consultant to a management consultant or auditor.
As with the CMA, you must pass rigorous tests and meet several requirements to receive the designation.
As for differences, it’s clear that the biggest difference between CMAs and CPAs is the specific skills they possess. A Certified Management Accountant (CMA) is a more strategic and forward-thinking business partner, while a Certified Public Accountant (CPA) is primarily focused on tax, audit, and day-to-day accounting activities. Common career paths for CPAs include public accountants, tax accountants, internal auditors, forensic accountants, and financial planners.
- CPAs maintain an overview of financial transactions, work on audits and taxes, provide consulting services, assist with financial planning, and work on litigation advice.
- Large companies typically appoint them to manage their accounts and related activities based on their expertise and experience.
- In many countries/states, these professionals must complete at least 40 hours of continuing professional development or CPE each year to maintain their appointment, as required by state authorities.
- It is therefore considered one of the highest positions a person can attain in the field of accounting. Certified public accountants are licensed to file corporate income tax returns.
What is a Certified Management Accountant (CMA)?
The Certified Management Accountant (CMA) designation is provided by the Institute of Management Accountants (IMA), which is responsible for reviewing and administering the CMA designation. Certifications are obtained by individuals with unique skills in financial accounting and strategic management.
The IMA works in partnership with the ICMA (Institute of Chartered Management Accountants) to process exam registration, although ICMA is responsible for any changes to the CMA certification requirements when it comes to exam development.
One of the most common certified accounting manager’s tasks is analyzing and deciphering data to drive organizational financial improvement. Unlike CPAs, they don’t just crack numbers for verification, they actually identify the strategies behind business decisions based on financial analysis.
Some of the most common career paths for CMA-certified individuals include cost accountant, corporate controller, risk manager, chief and senior accountant, chief financial officer (CFO), accounting manager, and vice president of finance.
Usually, a CPA works for public institutions, but CMA in the US works for private organizations.
- A management accountant analyses financial data as an in-house financial advisor and provides management advice based on this analysis.
- They work to accelerate business success using relevant technologies and analysis of past and present data.
- Track and maintain reports on organizational success and other performance indicators.
- Work with different areas of the organization to improve overall operational efficiency.
CMA vs CPA
The answer to the above question is that both certifications are equally good and highly regarded in the accounting field. The key is to guide aspiring candidates through a variety of career paths. CPA should be selected if the candidate has an interest in auditing, taxation, reporting, and regulation. CMA is a good choice if you are interested in management, strategic analysis, and decision-making. So let’s take a closer look at the unique benefits of these two certification courses and then decide.
Skills Obtained
Certified public accountants need to look back on their day-to-day accounting work, focusing on taxation and auditing, so they develop the ability to process numbers at will. A certified CMA employee, on the other hand, develops expertise in analyzing and interpreting data and uses it to drive company financial improvement. The role of a certified accounting manager requires more strategic thinking as it requires developing forward-looking strategies.
Time Duration
For CPA, it takes the candidate 18 months to complete all four parts of the course, and the clock starts ticking from the date he/she completes the first part. Candidates, on the other hand, are given three years to pass both parts of the CMA exam, the time starting from the date of registration.
Educational Qualification or Eligibility Requirement
In terms of qualifications, both the CPA and CMA require candidates to have a bachelor’s degree or equivalent professional qualifications. CPA also requires two years of public accounting experience, while CMAs require two years of managerial accounting or financial management experience. Once certified, CPAs are required to complete 40 hours of continuing education each year. CMAs are required to complete 30 hours of continuing education each year to maintain their certification.
Curriculum
The CPA course is divided into four parts: Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), Auditing and Certification (AUD), and Regulation (REG). The BEC primarily covers management-related topics, with the rest focused on other areas of tax and audit. Major topics covered as part of the CPA course include corporate governance, economic concepts and analysis, professional responsibility, ethics and general principles, financial statements, federal taxation of corporations, and federal taxation of individuals. Focus on building analytical skills such as Data Reporting and Key Decision Making. Major topics covered as part of the CMA course include planning, budgeting, forecasting, performance management, internal controls, cost management, decision analysis, professional ethics, balance sheet analysis, and more.
Career Opportunity & Salary
A CPA professional usually pursues a career as an accountant or financial adviser. Some of the most common job profiles sought by CPAs include Chartered Accountants, Management Accountants, and Internal Auditors. CMA-certified professionals, on the other hand, are meant to work in large companies, and common job profiles include cost accountants, consultants, and financial risk managers. Over the course of a career, the CPA’s average salary fluctuates about $120,000, while the CMA’s lie about US$100,000.
Fees & Pass Rates
On average, a CPA certification costs about $1,500 including exam, application, and licensing fees. The CMA certification, on the other hand, costs about $1,000 including all fees. In either case, however, the certification fee does not include the cost of refresher courses that candidates take for regular study.
CMA vs CPA Exam
To become a CMA or CPA, you must first pass a few exams (more on this later), in addition to meeting a few other requirements. There are numerous CMA multiple-choice questions on various topics.
There are some big differences between the CPA and CMA exams. This can have a significant impact on your decision to receive one of the designations.
Mainly, the CMA exam consists of two parts.
Part 1: Financial planning, performance, and analysis
Part 2: Strategic financial management
CMA Exam: Part 1
Part 1 consists of six competencies:
- Cost Management – Consist of 15%
- Internal Controls – Consist of 15%
- Technology & Analytics – Consist of 15%
- External Financial Reporting Decisions – Consist of 15%
- Planning, Budgeting, & Forecasting – Consist of 20%
- Performance Management – Consist of 20%
As a result of these changes, the ICMA (the agency responsible for developing exams) places greater emphasis on analytical skills such as data reporting and critical decision-making.
The most notable of these changes is the elimination of Internal Audits. This isn’t to say that Internal Auditing is not useful, but rather that the IMA wants CMAs to focus more on the management of controls rather than the auditing side of things.
CMA Exam: Part 2
There were quite a few changes that took place for Part 2 of the CMA Exam as they prepare for 2020. Like its counterpart, Part Two will cover the following 6 competencies:
- Risk Management – Consists of 10%
- Investment Decisions – Consists of 10%
- Professional Ethics – Consists of 15%
- Financial Statement Analysis – Consists of 20%
- Corporate Finance – Consists of 20%
- Decision Analysis – Consists of 25%
CPA Exam
The biggest difference between CPA and CMA exams is that the CPA exam is a 4-part exam.
The CPA exam is made up of 4 learning foundations including:
BEC: Business Environment & Concepts
FAR: Financial Accounting & Reporting
AUD: Audit & Attestation
REG: Regulation
BEC (Business Environment and Concepts)
BEC is a deep dive into the environment that a business operates in. Its core topics include macro and microeconomics broken down into the following competencies:
- Corporate Governance – 17–27%
- Economic Concepts and Analysis – 17–27%
- Financial Management -11–21%
- Information Technology – 15–25%
- Operations Management – 15–25%
FAR (Financial Accounting and Reporting)
FAR is the most extensive section of the exam and covers the most amount of the competencies, including:
- Standard-Setting, Conceptual Framework, and Financial Reporting – 25–35%
- Financial Statement Accounts – 30–40%
- Transactions – 20–30%
- Local and State Governments – 5–15%
AUD (Auditing)
As you likely guessed from the title, AUD covers auditing and assurance services. Test your knowledge of the following abilities:
- Professional Responsibilities, Ethics, and General Principles – 15-25%
- Assess risks and develop planned responses – 20-30%
- Carrying out further procedures and gathering evidence – 30-40%
- Draw conclusions and report – 15-25%
REG (Regulation)
REG is the only part of the audit that does not explicitly cover accounting topics. Instead, it covers:
- Duties, Ethics, Federal Tax Procedures – 10-20%
- Commercial law – 10-20%
- The federal tax on real estate transactions – 12-22%
- Individual federal tax – 15-25%
- Corporate federal tax – 28-38%
CMA vs CPA: Exam Cost
There are several variables that affect the cost of obtaining the accounting designation you choose.
To give you a better idea, here’s a general breakdown.
Like the CPA exam, there is a fee for the CMA exam. This is a one-time fee of $250 that allows registering for exams for the designated CMA testing period each year.
Each portion of the exam costs $460. Exam fees and registration may vary by the student or educational background. In this case, the registration fee is only $210 and each portion of the exam costs only $345.
Purchase of an IMA membership is also mandatory and ranges from $45 to $260 per year.
Like CPA, most candidates choose to invest in a CMA review course. Like CMA Exam Academy.
Prices per course range from $699 to almost $2000, depending on the style and quality of the refresher course. Again, there are also post-secondary and continuing education fees, which also add to the overall cost.
In total, the total cost of the CMA exam (excluding post-secondary education) can range from $1,550 to well over $3,000.
The average cost of a CPA review course ranges from $1000 to $3000. Once the studies are complete and you are ready to take the exam, you must pay a one-time fee to register for the exam. Depending on the state, this ranges from $50 to $200. Each portion of the exam costs $193.45. It will cost you $773.80 to complete all four.
In addition to the exam fee, you will also be charged a registration fee. Again, this varies by state, but in most cases, you can either be charged per stage or pay a flat fee and save money by enrolling in all four stages at once. All four sections cost between $177 and $252. Other costs include bachelor’s degrees, licenses, continuing education course fees, and many additional CPA preparation fees.
Overall, the cost of training to become a CPA (no degree) range from $3000 to $5000.
If you’re looking for a solid CPA program, check out the Universal CPA Review.
CMA vs CPA: Conclusion
Both CPA and CMA are reputable accounting courses that guarantee great opportunities and future possibilities, but it’s hard to say which one is better. A CMA will teach you accounting concepts such as planning, budgeting, and forecasting, while a CPA will teach you all about corporate governance and taxation. Depending on your learning preferences, you can choose the course that best suits you. If you’re looking for a respectable career with a good salary, the US CPA may be worth your consideration. But if you’re looking for an exciting career with lots of interesting challenges, the US CMA is for you.
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FAQs
Is a CMA Better Than a CPA?
The CMA is an increasingly prestigious certification that puts you at the table where big business decisions are made. Also, Chartered Accountants can play an important role in the operations of all kinds of financial institutions and businesses. Unless you have specific career goals, neither is better than the other.
CPA vs CMA – How to Enroll?
To enroll in the CPA course, you need to visit the official AICPA website for guidance on the process. On the other hand, CMA courses require registration on the IMA official website.
Is CMA Worth it After a CPA?
With CPA, there are already many employment opportunities. However, those with both a CMA and a CPA have much higher earning potential and more prestigious career opportunities. Even if the person already works as a CPA, s/he must pass the CMA exam and meet the necessary job requirements. Both qualifications must be maintained through continuing education.
Is it Worth Getting a CMA?
The CMA is a great way to make your mark in the world of accounting and finance. If you want to move beyond the tactical elements of accounting and become a business leader, working as a CMA is the perfect fit.
Can science/engineering students pursue CMA?
Yes, candidates who have completed their high school are eligible to take the CMA exam.
How is the CMA exam graded?
The CMA exam is scored on a 0-500 scale, which translates a candidate’s raw score into a uniform score for all candidates. On this scale, a score of 360 represents a scaled passing grade. The exact grades assigned to each MCQ, and essay question are not published. Results will be communicated within 40 days or 6 weeks after the exam.
