COMPARISON AND CONTRACTION OF CPA AND CMA written by: judes4
Certified Public Accountant (CPA) is a valuable credential for advanced career in accounting and auditing .This demonstrates the knowledge of accounting principles and practices according to the laws and regulation beneath professional accounting bodies. Whereas Certified Management Accountant (CMA) is, a professional accounting body designated its professional certification for cost and Management Accounting. These bodies can be compared and contrasted in different ways.
CMA comprises of two parts according to the Institute of Certified Management Accountants which is the body responsible for the preparation of examinations. Part I majorly deals with Financial planning, Performance and Control whereas Part II entails Financial Decision Making. This body specifically focuses on testing critical skills taking 4 hours in length in an examination mainly areas of Financial Planning, Analysis, Control, and Decision Making. CMA is a certification holder due its employability and profitability in the market sector since employers understands and applies corporate careers more efficiently by demonstrating skills in their working places. CMA examination content usually changes in order to achieve and maintain professional examination and certification. Therefore examination contents are as follows,
Part I
Planning, budgeting and forecasting (30%)
Performance Management (25%)
Cost Management (25%)
Internal controls (15%)
Professional ethics (5%)
Part II
Financial Statement Analysis (25%)
Corporate Finance (25%)
Decision Analysis and Risk management (25%)
Investment Decision (20%)
Professional Ethics (5%)
On the other hand, CPA is a computer based test comprised of four sections administered by American Institute of Certified Public Accountants taking a total of 14 hours for the four parts. The four parts are Auditing and attestation taking 4 hours, Business Environment and concepts taking 3 hours, Financial Accounting and Reporting taking 4 hours and Regulation taking 3 hours. To be certified public accountant, one must pass all the parts of the uniform CPA examination. The parts in examination content are as follows,
Auditing and Attestation (60% + 40% /2 =50%)
Business Environment and Concepts (85% +15% /2 =50%)
Financial Accounting and Reporting (60%+40%/2=50%)
Regulation (60%+40%/2= 50%)
Also examination schedules differs in both the CPA and CMA in the sense that CMA undertakes examination on January, February, May, June, September and October whereas CPA their examinations is scheduled on January, February, April, May, June, August, October and November.
In essence, CPA is definitely recognized better as compared to CMA in the United States of America. The license of satisfactory in CPA is issued by the state board of accounting which requires more communication among the clients than CMA resulting to CPA certification well known over a wide assortment.CMA license is not issued by any state board of accountancy since the examination process is not rigorous as compared to CPA.
Salary depends on the location, role played in the company and years of experience. Sources suggest that individuals with CPA earn more as compared to individuals with CMA. Being a CMA result to an increase of 5% to 10% over the current salary. Pay scale increase from $40k to $90k in CMA when individuals acquire experience of two years while starting salary may be $40k to $55k.CPA individuals with two years relevant experience earn $65 to $100k or more a year. Therefore, certified professional’s commands higher salaries as compared to the CMA individuals since the acquire higher skills and higher competence in their workplaces.
