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CMA vs CPA: Which Qualification is Better?

You are making an important decision.

Should I go for CPA or CMA? Can (or should) I get both?

An Overview

Certified Public Accountant is the “black-belt” for public accounting, and in essence, for the accounting profession in general.

The exam itself covers a broad range of knowledge, ranging from the core financial accounting and auditing, as well as taxation, business laws and ethics, cost accounting and strategic planning, economics, statistics and difference between the US and international accounting systems.

When compared to CPA, the Certified Management Accountant certification highlights the professional’s accounting and financial expertise within the corporate world. That is, the skills required for finance managers, controllers and CFOs. It also touches upon the operational and strategic aspects of running a corporation, a non-profit or a governmental agency.

What’s the difference between public accounting and management accounting? Steve Colton from Accounting Insights summarizes it well:

Financial accounting is concerned with providing information about a company’s operations to parties external to the company. Examples include the IRS, bankers, suppliers, creditors and shareholders. A primary focus is on standardized reporting and achieving compliance with applicable regulations.

Management accounting is concerned with providing financial information about a company’s operations to its internal managers. The focus is on developing relevant and timely information that helps internal managers resolve the problems. It also helps make decisions that arise on a day-to-day basis.”

CMA vs CPA Comparison at a Glance

In terms of the process of getting the CPA vs CMA qualification, here are the factors you should consider.

Exam CPA CMA
Focus Public accounting;
general accounting
Management
accounting
Overall recognition
Industry recognition
Exam Requirements    
Entry barrier Hard Easy
Need bachelor degree?
150 credit hours needed?
Accounting concentration?
Min. accounting courses?
Exam Format    
# exam days per year 4 testing windows(9 months) 4 testing windows
(6 months)
Total exam hours 14 8
No. of parts/levels 4 2
Latest pass rates 48-51% 35% / 50%
Estimated expenses US$2,000-3,000 $1,000-2,000

A Closer Look at the Syllabus

The following chart shows the overlap of topics between the CMA and CPA exams. The weighting in overlapped areas can be quite different so please use this for general reference only.

CMA Part 1 Topics Where It Appears in CPA Exam
 External Financial Reporting (15%)  FAR / REG (Tax Implications)
 Planning, Budgeting and Forecasting (30%)  BEC
 Performance Management (20%)  BEC
 Cost Management (20%)  BEC
 Internal Controls (15%)  AUD
 CMA Part 2 Topics  Where It Appears in CPA Exam
 Financial Statement Analysis (25%)  FAR / AUD (Analytical Review)
 Corporate Finance (20%)  BEC
 Decision Analysis (20%)  BEC
 Risk Management (10%)  BEC / AUD (possibly Audit Risk)
 Investment Decisions (15%)  BEC
 Professional Ethics (10%)  AUD

Source: SF Magazine, August 2015

Why CPA Could be Better

1.  More Established and More Recognized

The CPA qualification dated back to the early 20th century and is without a doubt the most established qualification among the accountant industry. Because of this and other reasons, the CPA title is more recognized in the US and in other parts of the world.

2. Higher Entry Barrier

The AICPA and NASBA have been pushing for a uniform CPA prerequisite in all states — the so-called “3E” requirements ask for 150 credit hours with a concentration in accounting, together with 1-2 years of experience verified by an active CPA licensee. The entry barrier is so high that becoming a CPA is a prestige that few people can get, which in turn makes the qualification very valuable.

3. Good for All Types of Accounting Jobs

CPA is widely recognized and you get the perks no matter where you work in the finance and accounting field, be it public or non-public accounting. On the other hand, CMA is only useful for those to work and stay in the corporate world.

Why Others May Prefer CMA

1. More Practical

In reality, most accountants (whether starting as a public accountant or not) will end up in the corporate sector. This means that the management accountant skill is more practical in medium to long term for professionals in the accounting industry. In fact, many candidates who went through both CPA and CMA find the materials covered in CMA more interesting and useful in their daily business life while CPA materials are too theoretical.

2. It’s Cheaper and Less Time Consuming

 

Both exams cost a fortune, but the CMA certification is considerably less. Also, with only 2 parts (vs 4 parts in CPA) it takes less time to study and pass.

3. You Can Take the Exam Before Graduation

If you want to get a fast track, CMA allows you to take the exam before you graduate, although you will have to complete your bachelor degree with 2 years of experience to ultimately get the certification.

4. Better Administration Body and “After-Service”

The CPA license is granted by each of the states instead of by a national body. This legacy issue has created a lot of confusion and challenges in the qualifying and application process.

CMA is administrated by one organization, the Institute of Management Accountants. IMA is well-run with fast email responses and provides clear instructions on how to prepare, study and pass the CMA exam.

After you get the CMA certification and if you choose to stay active, IMA provides everything from free webinar (for CPE and self-learning) to a forum for members to exchange ideas and build networks. CPA, in comparison, has Society of CPAs in each state but the support is less impressive.

Is It Difficult To Decide?

Why not get both? Here are the reasons:

1. There are Considerable Overlaps

While the two exams test for different skills, their core curriculum is accounting. You can expect, roughly speaking, 30-40% overlap. If you have taken the CPA exam, the CMA exam Part 1 can be considered a harder and more comprehensive version of BEC (Part 2 is somewhat similar to Level 1 of CFA).

 2CPE Hours are Good for Both

Both CPA and CMA require certain hours of continuing professional education. Many CPE courses are good for both.

3. A Dual Qualification Makes You Stand Out

I think most people would agree that the CPA is more prestigious but CMA is more practical. If that’s the case, if you have a dual qualification, you have the best of two worlds.

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