CPA vs CMA – Which Is Better For You?

What Is CPA?

The Certified Public Accountant is a professional qualification for accountants in the United States. CPAs are not only experts in numbers but also trusted advisors to businesses and individuals alike. CPAs ensure financial accuracy and compliance, scrutinizing statements for any discrepancies. They also stay updated on tax laws, providing invaluable guidance for complex financial decisions and optimizing tax strategies. 

Their dedication to upholding the highest ethical standards sets them apart as pillars of trust in the financial world. 

The CPA distinction is coveted by accounting professionals looking to develop their careers and show their subject-matter competence because it is recognized in most countries across the globe.

Eager to start your CPA journey? 

What Is CMA?

The Institute of Management Accountants (IMA) in the United States and The Institute of Cost Accountants of India in India both award the professional designation of Certified Management Accountant. 

CMAs are financial experts focusing on management accounting and financial management. They are knowledgeable about many facets of accounting and financial management, such as planning strategically, managing risks, managing costs, and performing financial analysis.

Organizations depend on CMAs for management and decision-making, in particular. They offer financial research and insights to assist firms in making wise decisions, boosting profitability, and efficiently allocating resources. 

Professionals seeking professions in management accounting and financial management may find the CMA designation to be an invaluable credential. It denotes a dedication to upholding strict moral standards as well as a thorough comprehension of key concepts in money and business administration.

Snapshot view of the differences

CPA vs. CMA – Skills

The skills demanded by each certification reveal the diverse landscapes they cater to. 

CPAs are financial detectives with audit skills and a keen eye for detail. The five key skills for a CPA are:

1. Consulting
2. Communication
3. Upskilling
4. Data analysis
5. Visual reporting

CMAs operate as financial architects, shaping the strategic future of organizations. Skills every CMA should have:

1. Analytical thinking
2. Cost accounting
3. Leadership 
4. Communication
5. Strategic thinking

The overlap between the two lies in their mastery of financial analysis, but the emphasis varies significantly.

CPA vs. CMA – Eligibility

For the CPA, a combination of formal education (bachelor’s and master’s degrees) and work experience in a related field is crucial. On the other hand, CMA is open to a broader audience with less stringent prerequisites, making it accessible to a more diverse group of aspiring accountants. To be eligible for the CMA foundation course, one must be 18 or older and passed the 10 + 2 exams.

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CPA vs. CMA – Syllabus

The content of the exams sheds light on the intricacies of each certification. The CPA exam, with its diverse syllabus, covers everything from auditing and taxation to business environment concepts. Contrastingly, the CMA exam focuses on strategic planning, financial analysis, and decision support. The focus is on equipping CMAs with the tools needed to guide organizations through the complexities of business strategy.

CPA vs. CMA – Exam Difficulty

The CPA exam boasts a slightly higher passing rate. It is a challenging but conquerable exam. The CMA exam, on the other hand, is renowned for its difficulty, requiring candidates to give it their all. The exam demands strategic thinking and a deep understanding of management accounting principles.

CPA vs. CMA – Requirements For a License 

CPAs often need to jump through more hoops when it comes to work experience and specific coursework prerequisites. Conversely, the CMA offers a more flexible approach, allowing candidates to meet the requirements through various pathways, and providing a more accessible route to certification.

CPA vs. CMA – Passing Rate

When it comes to passing rates, the CPA exam edges ahead. With a passing rate of around 54%, the CPA exam is a tough nut to crack but is slightly more forgiving than the CMA exam, which hovers around a 50% passing rate. The challenge should not deter you, as success lies in meticulous preparation and a strategic study approach.

CPA vs. CMA – Career Opportunity & Salary 

The career paths that unfold after obtaining these certifications are as diverse as the certifications themselves. CPAs find themselves in the realms of public accounting, auditing, and consulting, whereas CMAs are the architects of business strategy, occupying management roles. 

In terms of compensation, the CPA commands a 15% salary premium over non-CPA accountants, while the CMA boasts a whopping 63% median base salary premium in the U.S. These figures, however, are subject to variations based on location, experience, and industry.

CPAs have a wide range of job opportunities with competitive salaries. Some of them are as follows.

1. Cost accountant: $60,000 to $100,000 per year
2. Corporate accountant: $60,000 to $100,000 per year
3. Accounting manager: $70,000 to $120,000 per year
4. Senior accountant: $70,000 to $120,000 per year
5. Controller: $90,000 to $180,000 per year

Some job opportunities for CMAs are:

1. Financial analyst: $60,000 to $100,000 per year
2. Management accountant: $60,000 to $100,000 per year
3. Senior accountant: $60,000 to $100,000 per year
4. Cost accountant: $60,000 to $100,000 per year
5. Financial risk manager: $60,000 to $100,000 per year

CPA vs. CMA – Cost

The cost of doing CPA in India or CMA certification depends on a number of factors, including exam costs, review courses, and other charges. Here is a breakdown of the cost of each certification:

CPA Exam Fee:

• $50-$300 application fee
• Exam fee: around $953
• Retake price for CPA exam: $50-$200 
• CPA review course: $1000-$4000

Total cost: $3000 to $5000 (excluding degree) 

CMA Exam Fee:

• Registration price: $280 (one-time charge)
• Exam fee: $460 for each part 
• Review course: $699 to nearly $2000

Total cost ranges from $1550 to over $3000 

Conclusion

The choice between CPA and CMA is a hard one. Both certifications have unique propositions, demanding different skills, distinct career paths, and varying challenges and opportunities. 

As you stand at this crossroads, consider your strengths, aspirations, and what you wish to achieve professionally. Whether you opt for CPA or the CMA, remember that each path leads to a vibrant accounting career. 

The journey may be demanding, but the destination promises a fulfilling and impactful career in finance. Choose wisely, and may your certification journey be as enriching as the profession you’re stepping into!

Proschool provides a tailored CPA preparation program, aligning with the exam syllabus. With experienced faculty and interactive sessions, candidates gain practical insights and enhance comprehension. Practice assessments, flexible learning options, and comprehensive study material ensure effective preparation for CPA certification.

FAQs

Based on the blog content and general understanding of these certifications, here are the answers to your questions:

1. Is CPA better than CMA?

Whether a CPA is “better” than a CMA depends on your career goals and interests. CPA focuses on public accounting and auditing, while CMA is centered on management accounting and strategic financial management. CPAs are more involved in regulatory compliance, tax matters, and external financial reporting, whereas CMAs contribute to internal business strategies, financial planning, and decision-making. Choose CPA if your interests lie in public accounting and auditing, and CMA if you’re more inclined towards strategic business management.

2. Is CMA eligible for CPA?

Being a CMA does not automatically make one eligible for CPA. The eligibility for the CPA exam varies by state in the U.S. and typically includes specific educational requirements (like a bachelor’s or master’s degree in a related field), credit hours in accounting and business courses, and sometimes work experience. However, the knowledge and skills acquired as a CMA can be beneficial if one decides to pursue CPA.

3. What is the salary of a CPA in the USA?

• Salaries for CPAs in the USA are competitive and can vary based on location, experience, and the specific accounting role. As per the blog, CPAs can expect a salary premium of about 15% over non-CPA accountants. Specific roles and their salary ranges include:
• Cost accountant: $60,000 to $100,000 per year
• Corporate accountant: $60,000 to $100,000 per year
• Accounting manager: $70,000 to $120,000 per year
• Senior accountant: $70,000 to $120,000 per year
• Controller: $90,000 to $180,000 per year

4. Can I do CPA after BCom?

Yes, you can pursue CPA after completing a Bachelor of Commerce (BCom) degree. However, you need to ensure that your total educational credits meet the specific requirements set by the state board where you plan to take the CPA exam. Most states require 150 semester hours of education, which typically means having a master’s degree or additional coursework beyond a standard four-year bachelor’s degree. A BCom degree usually covers a significant portion of the required coursework, but additional credits may be necessary.

5. Is CPA in Demand in India?

Yes, CPAs are in demand in India, especially in multinational corporations, Big Four accounting firms (Deloitte, PwC, EY, KPMG), and companies that deal with U.S. financial reporting and auditing. With globalization and the integration of business markets, the expertise of a CPA in U.S. GAAP, international financial reporting standards, and U.S. tax laws is valuable. Furthermore, the growth of outsourcing of accounting services to India has also increased the demand for CPAs.

6. Is CPA Worth Doing in India?

Whether CPA is worth doing in India depends on your career aspirations. If you aim to work in global accounting firms, in roles that require knowledge of U.S. accounting standards, or in companies with a significant presence in the U.S., then a CPA can be very beneficial. It can open doors to higher-level positions in multinational corporations, provide opportunities for working abroad, and generally increase your competitiveness in the job market. However, if your career focus is strictly within Indian accounting standards and practices, a local qualification like Chartered Accountancy (CA) might be more relevant. Ultimately, the decision should align with your career goals, the specific industries you’re interested in, and your willingness to meet the CPA certification requirements.