CPA or CMA? Which Accounting Certification Has the Greatest Growth Potential
Image Source: Unsplash
A certified public accountant (CPA) and a certified management accountant (CMA) are two very popular accounting certifications. In the past, accountants and business owners used to favor the CPA certification. Now, CMAs are cropping up to offer more specific, specialized services.
The differences between a CPA and CMA certification may not be obvious to accountants, but you need to choose carefully. The certification you choose will determine your career path.
Not only that, but your career growth potential depends heavily on your accounting certification.
At a Glance: The Difference Between a CMA and CPA
The biggest difference between a CPA and a CMA is accounting focus. A CPA is a more generalized accounting certification, whereas a CMA focuses on strategy and business growth.
Here’s what both certifications look like at a glance:
| CPA | CMA | |
| Employment | Consultant, IRS agent, internal or external auditor, tax accountant, public accountant | Management accountant, corporate controller, consultant, chief financial officer (CFO), cost accountant |
| Institution | American Institute of Certified Public Accountants (AICPA) | Institute of Management Accountants (IMA) |
| Requirements | 4 year bachelor’s degree 150 extra credit hours Two years of work experience 40 hours of education (yearly) | 4 year bachelor’s degree Two years of work experience 30 hours of education (yearly) |
| Exam | 4-parts | 2-parts |
| Exam Fees | $500-$2,000 | $1,000-$1,500 |
| Pass Rate | 46%-54% | 34%-46% |
| Time to Pass | 18 months | 3 years |
| Total Time | 6-8 ½ years | 6-9 years |
| Competitive | Higher demand | Lower demand |
| Salary | $70,000-$120,000 per year | $66,000-$95,000 per year |
Pay close attention to your employment opportunities. Both a CMA and CPA can become a consultant, but it’s easier to get and keep a CMA. On the other hand, you’re more likely to become a CFO with a CMA. Be sure to weigh the pros and cons of becoming a CMA or CPA.
What is a Certified Public Accountant (CPA)?
A certified public accountant (CPA) is licensed to practice public accounting duties. CPAs are mostly focused on auditing, taxation, and various day-to-day accounting activities.
CPAs must pass a difficult and extensive 4-part CPA exam administered by the American Institute of Certified Public Accountants (AICPA). They typically require two years of work experience (depending on the state) and need to participate in continuing education classes.
Unlike a CMA, CPAs must have 150 extra college credit hours, which is almost the equivalent of a master’s degree. CPAs are responsible for preparing and reviewing financial statements, ensuring tax compliance, and auditing reports. The CPA certification is widely sought after.
What is a Certified Management Accountant (CMA)?
A certified management accountant (CMA) is licensed to identify business strategies based on financial analysis. CMAs focus on deciphering data for the purpose of business expansion.
Like a CPA, a CMA has to pass an exam, earn two years of work experience, and participate in continuing education courses. These CMA exam prep courses can help your exam, and you’re going to need it too. The pass rate for the CMA exam is even lower than the CPA.
Once licensed, a CMA will become a member of the Institute of Management Accountants (IMA), the association that oversees the CMA exam. They are responsible for preparing reports and financial statements, monitoring and supervising staff, and planning organization budgets
CPA vs. CMA: Which is the Best Accounting Certification?
Both accounting certifications are useful, but which of the two has the most career growth potential? If you’re looking to upgrade your accounting degree, consider the following.
CPA vs. CMA: Employment Opportunities
A CPA and CMA can be found working in similar positions. But a CPA is unlikely to transition into a management role unless they have experience or earn both accounting certifications
A CPA is more likely to work as a consultant, IRS agent, internal or external auditor, tax accountant, and public accountant. A CMA is more likely to work as a management accountant, corporate controller, consultant, chief financial officer (CFO), and cost accountant. If you’re looking to start your own business, then CPA would work better. Just keep in mind, you’ll also need to generate your own CPA leads to grow your accounting business.
Winner: CPA and CMA
What you choose in this section is up to your preference. However, CPAs can choose from a more varied job pool, while CMAs stick to management positions that involve risk management. CPAs are also more likely to be scouted by top accounting firms.
CPA vs. CMA: Competitive Advantage
The CPA certification is still considered the gold standard for accountants and is typically preferred by employers. The CMA certification is less well-known and often overlooked. This can be a problem if you’re trying to bypass ATS software or prove your worth to employers.
Winner: CPA
According to Kathleen Downs, recruiting manager for Robert Half International, a CPA license is more likely to keep you competitive. In a Monster article, Downs stated that 25% of their placements had a CPA, while 10% of placements had a CMA. Most clients prefer to hire CPAs.
Not only that, but most CPAs have a master’s in accounting because they need 150 extra credit hours to sit in on the exam. A master’s degree inevitably opens more doors for the accountant.
CPA vs. CMA: Exam and Time Requirements
To write the CPA exam, you first need a 4-year bachelor’s degree in an accounting-related field. You’ll also need 150 additional credit hours and maintain 40 hours of continuing education per year. Depending on your state, you may need two years of work experience, as well.
To write the CMA exam, you need a 4-year bachelor’s degree in any field and two years of work experience. You also need to maintain 30 hours of continuing education every year.
Winner: CMA
It’s much easier to become a CMA, but you may need to study more as a CMA. Accountants can get their CMA in 6 years, while it’ll take 8 years to get a CPA. CMAs also have lower continuing education requirements, meaning they’re more likely to keep their certification.
CPA vs. CMA: Exam Syllabus
The CPA exam is made up of four sections: Business Environment & Concepts (BEC), Financial Accounting & Reporting (FAR), Audit & Attestation (AUD), and Regulation (REG). You’ll complete 276 multiple-choice questions, 28 task-based simulations, and 4 writing portions.
Candidates have four hours to complete each section, with a combined time of 16 hours. Each section accounts for 25% of your grade. You must have a score of 75% to pass each section.
The CMA exam has two parts. Part 1 includes 6 competencies, which test for financial planning, performance, and analytics. Part 2 also includes 6 competencies but focuses on strategic financial management instead. The CMA pass rate is 40% for Part 1 and 50% for Part 2.
Candidates have four hours to pass 3 multiple-choice sections and 1 essay section.
Winner: CPA and CMA
The CMA handles higher-level business applications and concepts, while the CPA deals more with governance, laws, and technical components. Both cover what you need for your job.
CPA vs. CMA: Exam Difficulty
The CPA and CMA exam pass rate changes every year and varies based on your region.
The American Institute of Certified Public Accountants (AICPA) releases its CPA pass rates every quarter. As the AICPA is America-specific, they focus more on section pass rate percentages.
According to AICPAs Q1 pass rate for 2022, BEC and REG sections are passed at 57.33% and 60.03% rates, respectively. AUD and FAR are passed at 46.35% and 44.95% rates, respectively. Collectively, the pass rate for CPA exams is 46-54% depending on the year.
In 2020, The Institute of Certified Management Accounts (ICMA), a division of the IMA, released the most recent pass-rate statistics. The press release stated that 36.25% of candidates passed Part 1, while 50.5% passed Part 2. That’s a combined pass rate of 43% across all regions.
Still, The Americans have a high pass rate at 48% for Part 1 and 64% for Part 2, respectively.
Winner: CPA
According to statistics, the CMA is harder to pass than the CPA. However, it’s likely that a person going for the CMA exam isn’t formally educated in accounting. To get a CMA, you don’t need to have a bachelor’s degree in an accounting-related field. But to get a CPA, you do.
CPA vs. CMA: Certification Costs
The cost to become a certified CPA or CMA depends on your state, but it usually costs more to become a CPA. CPAs have to spend more on education, licensing fees, and course fees.
Here’s a fee chart for a certified public accountant and certified management accountant:
| Type | CPA | CMA |
| Application Fee | $130 | N/A |
| Registration Fee | $300 | $280* |
| Examination Fee | $833.60 (on average) | $912 ($460 per part)* |
| Review Course | $500-$2,500 | $500-$2,500 |
| Licensing Fee | $175 per year | $260** per year |
| Ethics Exam Fee | $169 | N/A |
| Bachelor’s Degree | $10,000-$40,000 per year | $10,000-$40,000 per year |
| Master’s Degree | $30,000-$120,000 | N/A |
| Total | $42,090.60-$164,107.60 | $11,952-$43,952 |
* Students pay a $210 registration fee and $690 ($345 per part) examination fee
** Students pay $45 a year, and Academics pay $135 per year
Winner: CMA
Becoming a certified CMA is much cheaper than becoming a CPA by a wide margin.
CPA vs. CMA: Pay Differences
A CPA makes $70,000 per year on average but can make $120,000 or more on average.
A CMA makes $66,000 per year on average but can make $95,000 or more on average.
However, both accounting certifications can make much more if they become CFOs, senior accountants, tax managers, corporate controllers, or financial controllers. The amount you make will range significantly based on your experience and the company you work for.
Winner: CPA and CMA
Although CMAs look like they make less on paper, both the CPA and CMA can make a similar amount. That’s because a CPA and CMA work in similar fields and deal with senior financials.
Which Accounting Certification Has the Most Growth Potential?
Both accounting certifications tie because their positives and negatives on paper balance each other out. For example, while a CPA takes much longer to earn and costs significantly more than a CMA, it’s more widely known than the CMA. That means you’re more likely to get a job.
If the CMA certification were more well-known in the finance industry, it would offer a better bang for your buck. Even with a master’s degree, it doesn’t seem like CPA accountants are offered a significantly higher salary than a CMA. If we were judging based on real worth usage, the CPA certification would win in the end because they’re more recognizable to employers.
For now, the CPA is more relevant to today’s job market and offers the most growth potential. If or once the CMA certification becomes more popular, it may replace multiple CPA positions.
Subscribe to our newsletter