In the fast-paced world of business and finance, selecting the right accounting professional for your organization is a critical decision. Two prominent certifications, the certified public accountant (CPA) and certified management accountant (CMA), offer distinct expertise and cater to different aspects of financial management. In this article, we will explore the characteristics of each certification and help your business choose between a CPA vs CMA.
- CPAs focus on providing accounting information to external stakeholders
- Ideal for businesses requiring a broader range of accounting services, including external audits and compliance
- CMAs primarily provide accounting information to users within the company
- Optimal for businesses needing help in internal financial management and strategic planning
Quick Comparison of CPA vs CMA
While not many accountants hold both the CMA and CPA designation, many CPAs can provide services typically provided by CMAs, and vice versa. The only exception is external audits—only a CPA can issue an audit opinion on a set of financial statements.
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When You Should Hire a CPA vs a CMA
The choice between hiring a CMA or a CPA for your business depends on your specific needs and goals. Each certification offers unique skills and expertise, so it’s essential to consider the nature of your business and the roles you want the accountant to fulfill.
In some cases, businesses may benefit from having a combination of both CMAs and CPAs on their finance team to cover a broad spectrum of financial and accounting functions.
- Specific job requirements: Clearly define the roles and responsibilities you expect from the accountant. If the focus is more on internal financial management, a CMA may be sufficient. If you need a combination of internal and external accounting services, a CPA could be beneficial.
- Industry standards: Consider industry standards and expectations when making your decision. Some industries or regulatory environments may have preferences for one certification over the other.
- Budget: Evaluate your budget and the resources available for hiring. CPAs may command higher salaries on average, so assess your budget constraints in relation to the skills required.
Frequently Asked Questions (FAQs)
The main difference lies in their focus and expertise. CMAs specialize in management accounting, focusing on internal financial management, while CPAs have a broader scope covering areas like auditing, taxation, and regulatory compliance.
Yes, the CMA certification is recognized in the U.S. It is awarded by the IMA, a professional association for accountants and financial professionals. The IMA is a globally recognized organization, and the CMA certification is widely accepted in the business and accounting community, including in the United States.
The cost can vary based on factors, such as experience, location, and industry. CPAs may command higher salaries on average because of their broader expertise. A CPA’s average compensation throughout the course of their career is around $120,000, while a CMA’s typical salary is around $100,000.
CMAs are often found in industries with a strong focus on internal financial management, such as manufacturing, technology, and healthcare.
It is important to assess the specific needs of the role, considering whether internal financial management or a broader range of accounting services is required. Additionally, consider industry standards and the financial goals of your business.
When determining whether a CMA vs CPA is better for your business, it’s important to align the certification with your organization’s specific needs and goals. If your emphasis is on internal financial management and strategic planning, a CMA may be the ideal choice. Meanwhile, if your business requires a broader range of accounting services, including external audits and compliance, a CPA could be the better fit.