The two professional designations CPA (Certified Professional Accountant) and 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.
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 CPA is an in-demand certification in the accountancy field.
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 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 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 CMA certification is granted, though.
What’s your background?
To qualify for the 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 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?
In the Middle East the CPA has an approximate pass rate of 40% depending on the section taken (the FAR and REG sections have a pass rate slightly above that). Globally the 2014 pass rates for CPA ranged from 46.35% for AUD up to 55.46% 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 in the Middle East and Africa were 21% for Part 1 and 37% for Part 2 in 2014. That compares with a respective pass rate of 35% and 49% globally over the same period.
How will certification boost your earnings?
If you are wondering whether the investment of pursuing CPA accreditation is worth it, one answer lies in the salary expectations. Research shows that professionally certified accountants can expect to earn anything from 5% to 15% more than uncertified accountants. A newly qualified finance accountant in the UAE can expect a basic salary of around US$5,000 per month, according to Morgan McKinley.
Following two comprehensive surveys in 2010 and 2012 of current and prospective CMAs in the Middle East, the IMA revealed some interesting figures. Firstly, it noted that annual basic salaries for CMAs had risen by 77% since 2010. The median annual basic salary came in at US$21,250 in 2012, but with a wide disparity when looked at on a country by country basis. In the UAE, for example, this salary had an average of US$57,500, while in Egypt the average salary was US$6,610. Putting geography aside, perhaps the most eye-catching piece of information is that CMAs earn 50% more in salary than non-CMAs. According to the report, “the benefits of CMA certification can be very substantial” and “the difference in pay between CMAs and non-CMAs is even more striking when work experience is considered”.
Which is more popular?
Just a look at the numbers will indicate that CMAs are much rarer than CPAs: there are 50,000 CMAs worldwide, a small drop in the ocean compared to the more than 300,000 CPAs in the United States alone. 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.
Still not sure which one's for you? Schedule your free one-on-one consultation session to find out!