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In the world of accounting, there are two closely sounding titles – CPAs and CMAs. It’s easy to get the two confused. They are both highly regarded professional titles, but what’s the difference between the CPA license and the CMA accreditation, and, most importantly, how do you know which path will be best for you?
Before we consider the merits of both, it’s worth familiarizing yourself with what each role entails. What type of career opportunities does each path offer and what can you expect to earn?
Well, in the world of accounting, a CPA is a Certified Public Accountant who has earned their CPA license to practice as a public accountant through a series of education, work experience, and examinations. Accredited by the American Institute of Certified Public Accountants (AICPA), CPAs are not your usual accountant. A CPA is a licensed accountant who helps businesses, organizations, and individuals achieve their business goals.
The best way to look at it is while all CPAs are accountants, not all accountants are CPAs. CPAs can action certain tasks that non-licensed accountants cannot such as preparing audited financial statements for an organization and performing audits of public U.S. companies.
As such, gaining your CPA license can be hugely advantageous, especially if you have your eyes set on a senior financial role within a big company.
Essentially, being a CPA can open many doors to well-paying accounting roles, which is why a CPA salary is comparably higher than a non-licensed accountant’s income.
Employers recognize the work and commitment that has gone into obtaining a CPA license and the knowledge a person can bring to a role. That’s why most specialist forensic accounting, auditing, and tax preparation roles in large organizations tend to be given to CPAs.
As you progress your career, your CPA salary is likely to reach into the high five figures, with the most experienced CPAs in management roles earning strong six-figure salaries.
Now that we’ve covered the career prospects of a CPA, let’s answer the question: what is a CMA?
As a Certified Management Accountant, a CMA is assessed by the Institute of Management Accountants (IMA) to be an expert in management accounting and corporate finance. As such, CMAs possess a high level of knowledge in financial planning, analysis, control, business decision support and professional ethics.
Therefore, some of the most frequent tasks undertaken by a CMA include analyzing and surmising data to mitigate risk and facilitate financial growth.
When we consider the CMA vs CPA landscape, they’re quite different. If you review the exam course material for both, the CMA centers on higher-level concepts and business applications. Conversely, the CPA focuses on the more technical components of accounting, tax laws, and financial governance.
In exploring the difference between CPA and CMA accounting professionals, it’s helpful to review the roles that a qualified person might hold. For instance, a CMA typically uses financial and accounting knowledge and data to influence business strategy. As financial strategists, they can, as the IMA says, “explain the ‘why’ behind the numbers.” Usually, they will hold the role of Cost Accountant, Risk Manager, Chief Financial Officer, VP of Finance, or Corporate Controller. Their exact title will depend on the employer and how involved they are in the strategic direction of the business.
The difference between a CPA and CMA, therefore, is that CPAs focus on taxation, day-to-day auditing, and accounting, whereas CMAs take on tactical business management roles.
Due to their additional licensed capabilities, CPAs tend to work for a broader range of organizations than CMAs – from public office to the private sector and as independent practitioners.
One thing that CPAs and CMAs share, though, is that they are both better paid than non-certified accountants, and by quite a margin.
The salaries of CPAs and CMAs are similar, with the average CPA salary being just a little higher. Over time, however, research suggests that the pay gap closes.
Widely reported by the AICPA and IMA, the average CPA salary is $62,123, and $56,590 for CMAs. However, both accreditations offer plenty of scope for professional development, with CPAs and CMAs earning an average of $10,000 more per year their non-certified peers.
Over time, the earning potential is shown to even out. For example, a CMA with 21-30 years of practice experience can expect to earn $118,553 compared to $108, 956 for a CPA with the same amount of experience.
While earning potential is top of the list for most people considering the CMA vs CPA route, so is the accreditation process.
Given the specialist knowledge you’ll be expected to acquire, you won’t be surprised to hear that it takes a few years to qualify a CPA or CMA.
If you have your sights set on becoming a CPA, you must be prepared to take and pass the CPA exam, you must obtain the necessary work experience, and meet the accounting credit requirements. You’ll need to undertake 150 hours of undergraduate study followed by a year or two of work experience (depending on the State you plan to practice). That’s before passing the CPA exam. How long it takes to pass the CPA exam all depends on how much you prepare. While CPA exam pass rates continue to fall in the 50% range, the average pass time, according to the AICPA, is 18 months. However, the time can be significantly reduced with the right CPA review course.
If we review the CMA vs CPA study times, the CMA is slightly longer, averaging 9 years. You’ll need a bachelor’s degree (4 years), followed by 2 years of work experience, and up to 3 years to pass the CMA exam. Although the exam is just a 2-part assessment, it’s notoriously difficult to pass, with an average pass rate of 45%.
The biggest difference between CPA and CMA assessments, though, is the number of exams you’ll be expected to sit.
While the CMA exam consists of two parts (financial planning, performance, and analytics & strategic financial management), the CPA has four learning foundations (parts), including:
Another difference between CPA and CMA studies is cost. Although study fees vary, the average fees for the CMA are lower – $1,000 compared to $1,500 for the CPA. Check out CMA Exam Academy if you’re looking for a strong CMA review course.
Whether you take the CMA or CPA route is entirely up to you. Only you can decide if you fancy a strategic role or would rather entrench yourself in the technical workings of a Certified Public Accountant.
Here are a few things CMA vs CPA things to keep in mind:
If you’re unsure what to expect from the CPA or CMA exams, we suggest starting a free trial with Universal CPA.
Signing up for a no-obligation free trial will give you access to video lectures, study guides, sample questions and simulations, so you have a head start on what to expect from the CPA exams.
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