Anyone thinking of advancing in a career in finance and accounting at some point has to consider CPA, CFA, and CMA.
CPA stands for Certified Public Accountant, whereas CMA and CFA stand for Certified Management Accountant and Chartered Financial Analyst.
A CPA’s role is considered the finest among all accounting professions due to its rigorous training and the need for a strong accounting background. However, a CPA also has to wear many hats rather than focus on management or investment accounting.
Therefore, CMA and CFA are preferred over CPA by individuals from a non-accounting background.
The job of a CPA also requires advanced education and training, which might not be everyone’s cup of tea.
Considering the difficulties involved with becoming a CPA, the path to becoming a CMA and CFA is much easier.
This guide will help you decide what factors to consider when choosing between the two qualifications.
What is a CPA?
CPA, Certified Public Accountant, is a licensed accounting profession acquired by rigorous training. Though every country has its own set of rules and regulations for becoming a Public Accountant, every individual must pass the same required examination to become a CPA.
What is a CMA?
Certified Management Accounting (CMA) is a globally acclaimed accounting profession with a focus on management accounting. A CMA specializes in cost accounting and inventory management. The global organization which issues this certification is the Institute of Management Accountants (IMA). More information can be found at Wiley CMA test bank regarding CMA certification.
Career Opportunities and Skills
The career opportunities associated with this role are business analyst, CFO, senior accountant, cost accountant, finance manager, and relationship manager. CMAs must be well-equipped with necessary analytical, leadership, strategic decision-making, management, interpersonal and communication skills. These skills are crucial for financial planning, business analysis, and other management decision-making – all of which are the responsibilities of a CMA.
How to become a CMA?
The credentials of becoming a CMA begin with a Bachelor’s degree or a Professional Accounting Certification in said field. Apart from that, CMA applicants are expected to enroll in the IMA, prepare and pass specific CMA examinations and have sufficient work experience of two years. Therefore, both the educational requirements and work experience are crucial for certification.
Taking the CMA exam
The exam itself has two parts, which must be cleared to become a CMA. Although a flexible timeline of three years is allowed to clear the exams, most candidates pass both exams within 18 months.
What is CFA?
Chartered Financial Analyst (CFA) is the certification required to specialize in financial accounting, specifically investment and portfolio management. Since this is more aligned with financial accounting, the role of a CFA is well-respected in the world of investment and financial accounting. The CFA Institute issues the certification for this role after the candidate has completed educational and work experience requirements.
Career Opportunities and Skills
The career opportunities for this role ranges from that of an investment analyst strategist, chief investment officer, wealth manager, consultant research analyst, and portfolio manager. CFAs must possess necessary analytical, research, time-intensive decision-making, and computing skills.
CFAs can work in a wide range of sectors, primarily that involve handling investment and assets, like risk management firms, audit firms, investment houses, commercial banks, insurance companies, etc.
How to become a CFA
To become a CFA, candidates must enroll in the CFA program and appear for the CFA exam. To enroll in the CFA program, candidates must have a Bachelor’s degree. It can be in any field, work experience of 4000 hours, or a higher-level degree of 3 years or more.
Taking the CFA exam
The CFA exam consists of three levels, which must be passed. A CFA candidate can appear for one level twice a year but cannot appear for one level more than six times throughout their lifetime. Lastly, there is no time limit on when one should complete the CFA program.
CMA vs. CFA: Factors to consider before applying
Now that we have covered the basics of each program let’s discuss the factors that a future applicant must consider before choosing between CFA and CMA.
Perhaps the most attractive aspect of CMA is that it can be completed within three years. The CFA exam only has two parts, which can be completed within 18 months. On the other hand, the CFA has no time limit as to when it should be completed, but there are three levels of its exams that may require some time to complete.
As mentioned earlier, the CMA exam has only three levels, whereas the CFA exam has four levels. Apart from the duration of exams, the scheduling feature of CMA exams is more convenient. Students can appear for the exam on any day during the testing window, whereas for CFA exams, students cannot appear more than six times throughout their lifetime.
The CMA exams are computerized and relatively less content to prepare for – an attractive attribute for many applicants.
The CFA exam is more rigorous and requires more time to prepare for.
The CMA specializes in management accounting, whereas a CFA specializes in financial and investment accounting. This is where the job prospects of both differentiate. While every corporation requires a management accountant to help plan its budgets and overlook costing, not every business needs a Wealth manager or investment strategist. Therefore, CFA is a more specialized field with a relatively smaller job pool.
Gold Standard of CFA
Although CFA is suitable for financial accounting enthusiasts, it is held in high regard by asset and risk management institutions. With the growing demand of portfolio management and investment analysts, coupled with the uniqueness of this certification, CFA is considered a gold standard in the accounting community. Those who value a prestigious role over the difficulties of that role prefer CFA over CMA.
The finance and accounting field is vast and has witnessed immense growth. As a result, it is highly in demand that almost every business graduate or accounting professional wants to upskill by opting for a CMA or CFA certification. However, this decision must not be made hastily. Instead, take your time to conduct full-fledged research and rule out any aspects of both careers that don’t sit well with you. Nonetheless, both professions require hard work and diligence to strive.
Table of Content
- 1 What is a CPA?
- 2 What is a CMA?
- 3 Career Opportunities and Skills
- 4 How to become a CMA?
- 5 Taking the CMA exam
- 6 What is CFA?
- 7 Career Opportunities and Skills
- 8 How to become a CFA
- 9 Taking the CFA exam
- 10 CMA vs. CFA: Factors to consider before applying
- 11 Conclusion