CPA vs MBA? How do you decide between the two?

Matt

Matt

Hey! My name is Matt. I am a licensed CPA and the co-founder of Universal CPA Review. Prior to Universal CPA Review, I spent 9 years in audit and advising clients on M&A transactions.

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CPA vs MBA? How do you decide between the two?

If you’re keen on a career in accounting and have been exploring your options, one of the first things that’ll cross your mind is whether you should take the CPA or MBA route.

There’s no definite answer. There are lots of things that you need to weigh up when choosing whether to take the Certified Public Accountant (CPA) path, opt for an MBA, or even combine the two (CPA with MBA). One thing is for sure, though, you will need one of these qualifications if you wish to have a successful career in finance.

Whether you’re thinking about the CPA or MBA, it’s helpful to touch on what each one entails, how they differ, and why some savvy accounting professionals now have both.

What’s involved in becoming a CPA?

When considering the CPA or MBA route, it’s essential to know what’s involved in becoming a Certified Public Accountant (CPA).

The key difference between having a CPA license or a Master of Business Administration (MBA) is that the CPA is a professional licensing credential, and the MBA is an academic degree.

As the name suggests, the CPA license is a US-based qualification awarded by the AICPA that sets the standards for practicing accountancy professionals. As such, it is top on the list of qualifications employers expect to see on an accounting professional’s resume.

To become a CPA, you must pass the CPA exam and follow strict requirements in the state where you wish to practice. This includes 150 credit hours of coursework, a year’s experience under the supervision of a CPA, and passing examinations on business, taxation, upper-level accounting, and auditing. Learn more about the CPA exam requirements.

The CPA exam is comprised of 4 sections, each with a different set of blueprint topics tested. How long it takes to complete the process and pass the tests depends on the individual, but on average, it takes between 12 to 18 months following your undergraduate studies. How hard is the CPA exam? Well, the CPA exam pass rate averages ~45% across all four sections. CPA exam scores release occurs at least once a month now that the CPA exam is tested on a continuous basis. The CPA exam cost 

After graduation, and to continue to hold licensure, you must commit to continual professional education (CPE). This is to ensure that you are up to date with changes in the accounting world. CPE requirements vary by state, but generally, a CPA must earn a minimum of 20 hours of CPE annually with at least 120 hours every 3 years. 

Is the CPA worth it?

You may wonder if the CPA is worth it when you have ongoing CPA education costs. The answer is a resounding yes. The accounting world is constantly evolving, not least due to the development of new technologies and regulations. By gaining your CPA license, you’re essentially saying to a prospective employer that you not only have the technical accounting skills, but you understand how the profession is advancing.

Crucially, once you’ve completed the necessary training and obtained the right amount of credits to become a CPA, there’ll be lots of career avenues for you to explore. Potentially, you will have a wider selection of possible accounting career choices than studying for an MBA. You could go into tax accounting, tax advising, insurance, auditing – in fact, any field of accounting you wish. As a CPA, it’s not unrealistic to expect to become a CFO, controller, tax advisor, or forensic accountant at a large organization.

If you’re still asking yourself, “is the CPA worth it?”, it’s also worth keeping in mind that many businesses legally require a financial statement audit or review, which a CPA must complete.

Employers also recognize that the rigorous CPA exams give CPAs unparalleled tax law and upper-level accounting knowledge. Likewise, to maintain their licensure, CPAs are expected to follow a strict code of ethics, offering your employer further reassurance.

Crucially, CPAs can also function as fiduciaries, where they have the legal duty and power to act on behalf of, or in the best interests of, clients. Non-CPAs, on the other hand, cannot take on this responsibility.

What’s an MBA Degree?

Now that we’ve looked at the benefits of the CPA let’s explore the MBA.

As an undergraduate, you may already know what an MBA degree is, but how valuable is it in accounting? With it costing an average of $60,000 to $70,000 (compared to $4,000 to $4,500 to gain a CPA license), you need to know what’s involved and whether it’s the right path for you.

Let’s start by explaining what an MBA degree is and why employers value it. An MBA is a postgraduate degree focusing on a range of business specialisms such as finance, accounting, IT, marketing, management, and operations. To be accepted onto an MBA degree course, you must meet the college’s requirements that evaluate your undergraduate GPA score and GMAT performance. 

Courses can vary depending on your specialization, but the core elements of your MBA degree will typically cover accounting standards, financial reporting, technology in the workplace, problem-solving as well as management theory and practice.

When considering a CPA or MBA, carefully consider what appeals to you the most. If, for example, you can see yourself entering management or becoming a business consultant, an MBA may well be the better choice. If, on the other hand, you know that you want to practice in a specific field of accounting or work for a large

CPA vs. MBA salary: what’s the difference?

One of the biggest deciders when choosing the CPA or MBA route is earning potential. So, when we look at a CPA vs. MBA salary, how do they compare? Is there much difference, or does it depend on the individual?

Well, there are a few factors to consider. Generally speaking, on average, CPAs earn 10% more than non-CPA accounting professionals, with the median salary being $62,123 per year.

Whether your MBA earning potential is as much as a CPA will depend on where you studied and your career choices. In the first year after graduating, you can expect to apply for roles in the region of $50,000 per year. While that may not seem a lot compared to a CPA, your earning potential will rise as you gain experience and have an opportunity to exercise your business management skills.

If you have an MBA in accounting, which is where you choose to specialize in accounting rather than taking a general MBA, you may find your earning potential is higher. After all, most people with an MBA in accounting enter financial analyst roles and are well-rewarded for helping businesses and clients make informed investment decisions.

The value of the CPA with MBA option

There seems to be a growing number of accounting professionals choosing to have a CPA with an MBA, but why?

The typical CPA with MBA scenario tends to be an experienced CPA who is looking to move into a specific area of business or emerging industry. An example might be where a CPA wants to learn specific strategy skills or perhaps even set up their own consulting business.

In many ways, being a CPA with an MBA will set your resume apart from other candidates, especially if you have been selective in where and what you study. Suddenly, you not only possess the extensive knowledge and technical accounting skills of a CPA, but you also have the skills and necessary qualifications to move into key management roles.

The reverse is also true. For example, a finance-focused Director with an MBA interested in moving into a corporate finance role could learn a lot from qualifying to become a CPA.

Despite the consensus that you must study for either the CPA or MBA separately, you can study for both simultaneously. Some aspects of an MBA may, for example, count towards the 150 credit hours to become a CPA. However, this will very much depend on the school or college and if the MBA program meets the CPA requirements.

Seek the advice of others

If you’re still undecided about the CPA or MBA, you’re not alone. That’s why it’s a good idea to do your research and talk to other people with their CPA license and/or MBA to work out what’s right for you.

Here are a few tips on how you can reach out to likeminded people:

Start a free CPA review trial

If you’re wondering what to expect from the CPA exam, how it is broken down, and what you can do to prepare for it, we suggest signing up for a free trial of Universal CPA.

With the trial, you will have unlimited access to the entire platform for 7 days, including video lectures, electronic books/study guides, multiple-choice questions, and exam simulations.

We hope you’ve found this article helpful as you make your decision about the CPA or MBA. The important thing is to take your time and enjoy exploring your career and learning options.

If you ever want to speak to us, we love a live chat, so check the ‘live chat icon’ on your screen, and we’ll answer any questions you have.

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