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Accounting | Versus

CPA vs CMA: Which Is Better for Your Business?

Published February 1, 2024

Published Feb 1, 2024

Tim Yoder, Ph.D., CPA

REVIEWED BY:
Tim Yoder, Ph.D., CPA

Danielle Bauter

WRITTEN BY:
Danielle Bauter

This article is part of a larger series on Bookkeeping.

TABLE OF CONTENTS

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

 
CPA
CMA
Focus
Has a broader focus, covering areas such as taxation, financial accounting, regulatory compliance, and consulting; has a thorough understanding of generally accepted accounting principles (GAAP) and the preparation of financial statements and is an expert in financial auditing techniques
Is focused on management accounting, which involves providing financial analysis to help make important business decisions, compiling comprehensive cost information, and assisting with strategic planning by providing financial insights
Users
Typically provides information to external users, such as investors, banks, the United States Securities and Exchange Commission (SEC), and the IRS
Primarily provides information to users within the company
Work Environment
Can work in public accounting firms, corporations, government agencies, or as independent consultants
Often works in corporate finance and management roles
Certifying Body
Granted by various state boards of accountancy in the United States
Institute of Management Accountants (IMA)
Work Experience
Typically requires a certain amount of work experience, often in public accounting, depending on the state’s requirements
Generally needs two years of professional experience in management accounting or financial management
Education Requirements
Usually needs a bachelor’s degree in accounting or a related field and often requires more credit hours in accounting and business courses compared to CMAs
Typically needs a bachelor’s degree in accounting or a related field
Exam Content
15-hour CPA exam consists of four sections covering auditing and attestation, business environment and concepts, financial accounting and reporting, and regulation
Eight-hour CMA exam includes two parts that cover financial planning, performance, and control as well as financial decision-making
 
CPAs and CMAs
Accounting Duties
Can assist with general accounting duties, including preparing and analyzing financial statements and advising on financial issues
Professional Designation
Professional certifications recognized in the field of accounting
Ethical Standards
Adhere to high ethical standards, and are required to follow a code of conduct and ethics set by their respective professional organizations
Continuing Professional Education (CPE)
Need to fulfill CPE requirements to maintain their certifications and stay updated on industry developments

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.

For in-depth information, see our guides on:

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.
  • Comprehensive accounting services: If your business requires a broad range of accounting services, including auditing, taxation, financial reporting, and regulatory compliance, a CPA may be a more versatile choice.
  • Business startup: If you’re launching a new business, a CPA can help with setting up efficient accounting systems and provide financial advice for tax planning.
  • Public accounting needs: If your business involves activities such as external auditing, tax planning, or providing accounting services to clients, a CPA is preferred due to their comprehensive accounting knowledge.
  • Regulatory compliance: CPAs are often well-versed in regulatory requirements, making them suitable for businesses that need to comply with financial regulations and reporting standards.
  • Diverse industry exposure: If your business operates in multiple industries or has diverse accounting needs, a CPA may bring a broader skill set and experience.
  • Business expansion: If you’re expanding your business, a CPA can assist with navigating complex financial regulations and provide strategic advice.
  • Focus on internal financial management: If your business primarily needs expertise in areas like financial planning, budgeting, cost management, and decision analysis, a CMA may be a good fit. CMAs specialize in management accounting and can provide valuable insights for internal financial management.
  • Strategic planning: CMAs are well-suited for roles that involve strategic financial planning and helping the organization make informed decisions based on financial data.
  • Cost analysis: If you’re struggling to understand how your total costs affect your bottom line, a CMA can help. It’s important to understand the effect on costs of differing levels of production, equipment upgrades, and other manufacturing decisions. CMAs will analyze your cost structure to maximize profitability.
  • Budgeting: CMAs specialize in preparing budgets for organizations, with the ability to analyze financial data to make strategic decisions that will boost a company’s profitability.
  • Strategy building: CMAs can create effective financial and accounting strategies and can also craft long-term plans for companies by communicating complex information in a concise way.
  • Corporate finance: If your business operates in a corporate finance environment, where financial management is crucial for success, a CMA with expertise in management accounting may be beneficial.

Considerations

  • 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.

Bottom Line

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.

About the Author

Danielle Bauter

Find Danielle OnLinkedIn

Danielle Bauter

Danielle Bauter is a writer for the Accounting division of Fit Small Business. She has owned Check Yourself, a bookkeeping and payroll service that specializes in small business, for over twenty years. She holds a Bachelor's degree from UCLA and has served on the Board of the National Association of Women Business Owners. She also regularly writes about business for various consumer publications.