U.S. CPA versus U.S. CMA: Which one is for you?
The two professional designations U.S. CPA (Certified Professional Accountant) and U.S. CMA (Certified Management Accountant) both offer a route to higher earnings and a career path with great prospects, so knowing which one to pursue can feel confusing. While they share some things in common, they are also quite different – read on to find out what sets them apart and which one could be right for you.
The U.S. CPA is a globally recognized certification to practice public accounting and auditing but is licensed by US state boards of accountancy. Students from abroad generally choose which US state they want to apply through, and each state has its own requirements to meet. The U.S. CPA is an in-demand certification in the accountancy field.
The U.S. CMA is a global credential, which indicates that its holder is versed in areas such as financial planning and analysis, cost accounting, budgeting and forecasting, and financial reporting. Generally it distinguishes professionals with a finance and accounting background as suitable for positions such as financial, business or systems analyst.
What the two designations have in common is both involve passing a series of exams, as well as requiring the completion of educational and professional experience.
The U.S. CPA consists of an exam in four parts - Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG) - all of which must be passed for success. In total they represent 14 hours of testing and must all be taken within an 18-month timeframe after taking and passing the first part.
The U.S. CMA is a two-part exam spread over eight hours and all parts must be taken within three years of joining the CMA Program. Although at least two years of professional experience in management accounting or financial management are required, you can sit the exam prior to satisfying these requirements. Proof of work experience must be provided before the U.S. CMA certification is granted, though.
What’s your background?
To qualify for the U.S. CMA a bachelor’s degree is required. This makes it somewhat of an easier option to those who have a background in finance, marketing or economics but who don’t meet the U.S. CPA requirement of a substantial number of accounting hours/courses needed to sit the exam. Most US states require a total of 120 credits hours to be able to sit for the exam, or 150 hours of coursework to obtain the license (in addition to a bachelor's degree).
How easy is it to pass?
Globally, the CPA had an approximate pass rate of 54% in 2021, depending on the section taken. The BEC and REG sections have a pass rate slightly above that ranging from 44.70% for FAR up to 62.84% for BEC.
CPA pass rates may sound disheartening but they’re actually much higher than those for CMA. According to the Institute of Certified Management Accountants, pass rates for the CMA globally were in were 45% in the first quarter of 2020 which were an increase from the 35% pass rate for Part 1 and 45% for Part 2 in the past couple of years.
How will certification boost your earnings?
If you are wondering whether the investment of pursuing the CPA accreditation is worth it, one answer lies in the salary expectations. Research shows that professionally certified accountants can expect to earn anything from 10% to 15% more than uncertified accountants. As a matter of fact, CPAs have the potential to boost their earnings by $1 million of their lifetime compared to a non-CPA in the same position.
On the other hand, IMA’s comprehensive 2021 global salary survey found that for CMAs weathering the pandemic, the median compensation was 58% more than non-CMAs and the results also suggest that CMAs overall were less impacted by the pandemic and more likely to feel they have adequate skill sets to get by than non-CMAs.
Putting the pandemic aside, perhaps the most eye-catching piece of information is that according to the survey “those holding both the U.S. CMA and the U.S. CPA earn 149% higher median total compensation compared to those without either certification”.
Which is more popular?
Just a look at the numbers will indicate that CMAs are much rarer than CPAs: there are 100,000 CMAs worldwide, a small drop in the ocean compared to the more than 669,000 actively licensed CPAs around the globe. But the accreditation should not be looked at in terms of popularity, as either of the two signifies that its title holder is distinguished in his or her field. Whichever you choose, you can be sure you are pursuing a certification that opens up growing opportunities in professional fields that are increasingly in demand.
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