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For many accounting students, certification is a major concern. Many students have concerns about their certifications. Is it necessary for me to get certification? Is it significant? If so, which one is it? What are the advantages of obtaining a CMA or CPA license? What is the distinction between CPA vs CMA? Accounting students are particularly concerned about such issues. Thus, in this article, we will go over all of these questions, as well as the CPA salary NYC and salary for CMA candidates.
Before we go into which is better, CPA or CMA, let’s start with the basics of it.
Basic understanding of CPA and CMA
The primary distinction between CPA and CMA certification is in the educational requirements, testing methodology, and cost.
The Certified Management Accountant, abbreviated CMA, is a worldwide recognized qualification in financial accounting and strategic management. The Institute of Management Accountants provides this qualification.
CPA, or Certified Public Accountant, on the other hand, is a license granted to an accounting professional who has passed the CPA exam and completed their state’s licensing standards. This certificate is issued by the American Institute of Certified Public Accountants.
In a nutshell, the CPA is a license issued in the United States, but the CMA is a worldwide recognized qualification.
For professionals looking to work in public accounting, the CPA is the most appropriate qualification. It includes the following:
- Accounting and tax services
- Auditing and other attestation services
- Consultation services
CMA certification is appropriate for professionals seeking employment in corporations, non-profit organizations, government, education, partnerships, and other business entities.
- Performance Management
- Cost Management
- Risk Management
- Financial analysis
- Decision-making support.
Many CPA salary NYC and CMA salaries are quite attractive and satisfying.
The primary distinction between CPA and CMA
While both the certifications require a significant amount of time, the primary difference between CMA and CPA with respect to education is that the CMA exam may be taken while a candidate is still in school. To get fully certified, you must complete a bachelor’s degree and fulfill the experience requirement at your job. The requirements, however, may differ from one state to the next.
In addition, to take an exam, the candidate must have a minimum of several required accounting and business classes.
Before you can take an exam, many states have a requirement of 150 hours of college credit, which can be fulfilled by additional undergraduate and master’s courses.
To become a fully certified accountant, you must have 150 hours of college credit and meet the accounting experience criteria.
You are not through with education once you have obtained either certification! Both certifications have annual minimum requirements for continuing professional education (CPE). These criteria can be met in a variety of ways, including seminars, online certificate courses, self-study courses, and so on. Many companies even offer in-house training or even pay for your CPE.
Furthermore, the CPA requirement differs by state.
CPAs typically require 40 hours of CPE every year, but CPMs require 30 hours per year.
In order to obtain the CPA or CMA license or both, the biggest hurdle to acquire either or both will be the exam. Each examining board thoroughly documents the substance of each set of exams (the IMA for CMAs and the AICPA for CPAs). Although the difficulty of the CMA and CPA exams is subjective, the exam formats and criteria are some of the primary differences between the two.
The CMA test is divided into two parts that cover 12 competencies:
Part 1: Financial Planning, Performance, and Analytics
Part 2: Strategic Financial Management
The exams are available throughout the year during three testing windows:
- May- June
Each exam section consists of 100 multiple-choice questions and two comprehensive essays. The exam is timed, and you have four hours to complete it: three hours for multiple-choice questions and one hour for essays. The total number of points is 500, and you must score 360 or higher to pass.
On the other hand, the CPA exam is divided into four parts and you are allowed to take four hours of exam time per part. The parts comprised of :
- Auditing and Attestation (AUD)
- Financial Accounting and Reporting (FAR)
- Regulations (REG)
- Business Environment and Concepts (BEC)
Each of the four exams is divided into five parts: two multiple-choice tests with 60 to 72 multiple-choice questions and three tests with eight accounting simulations. You have 18 months from the moment you sit for your first passing exam to pass all four parts. If you do not pass within the 18-month timeframe, you will be required to retake previously passed tests that fall outside of the 18-month term.
Cost is another factor to consider while choosing between the CMA and CPA exams. For each exam component of the CMA exam, there is an entry fee and a registration cost.
If you are a professional member of the IMA as of January 2020, your admission charges and exam fees total $1,080 if you pass both portions the first time.
Your total fees as a student or professor are only $810. Membership in the IMA is also required; the cost varies depending on your professional choice and level.
On the other hand, the cost of taking the CPA exam varies according to jurisdiction. Almost every state charges more than $1,000 to apply, register, and take all four examinations.
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At a Glance: The Key Differences Between CPA and CMA
|Exam||A four-part exam with a total of 16 hours of testing||A two-part exam with a total of eight hours of testing|
|Fees||$1500 approx.||$1300 approx|
|Annual Continuing Education||40 hours||30 hours|
|Experience Requirements||1-2 years of experience as a licensed CPA||2 years of experience in Financial Management or Cost Accounting|
Other Points of Differences
CMA and CPA job options are diverse and rewarding. Common job opportunities for a CPA are as follows:
- Public accountant
- Internal auditor
- Financial manager
The CMA certification focuses on operations and finance and qualifies you to operate in large firms with complicated operations. Common job opportunities for a CMA are as follows:
- Cost accountant
- Financial Risk Manager
- Other C-suite executive positions
Top accounting firms in NYC such as Deloitte, PwD, KPMG, Ernst & Young, and many more hire CPA and CMA qualified candidates.
According to industry data, a CPA salary in NYC earns 15% more than a non-CPA accountant. CMA certification, on the other hand, results in a 63 percent wage rise over professionals who do not hold a CMA certification.
There are numerous accounting firms in NYC that provide competitive wages to CPA and CMA graduates.
CPA vs CMA: Which One is Better?
Deciding which certification is better to pursue, depends upon the personal choice of students. Thus, it is advised to accounting students to consider their personal interests while choosing between CPA and CMA.
Both of these credentials are equally good and well-regarded in the accounting sector. A CPA should be pursued if a candidate is interested in auditing, taxation, reporting, and regulation, whereas a CMA should be pursued if a candidate is interested in management, strategic analysis, and decision making.