Accounting
Santosh_2102
Week2.docxAccounting Certification
Apparently, their several accounting certifications out there some of which are more popular than others. The most popular of these certifications include Certified Public Account (CPA), Certified Management Accountant (CMA), Certified Information Systems Auditor (CISA), Certified Financial Analyst (CFA), Certified Internal Auditor (CIA), Chartered Alternative Investment Analyst (CAIA), and Enrolled Agent (EA). Obviously, one can use any one or a combination of these certifications to enhance their careers depending on their particular career focus. For purposes of this discussion, the focus is narrowed down to two of these certifications; Certified Public Accountant (CPA), and Certified Management Accountant (CMA). More precisely, a discussion of the differences between the two is made. And last but not least, a determination is made about the certification that is more applicable to Managerial Accounting and that which is more applicable to Financial Accounting. In a nutshell, each of these two certifications is discussed. That said this discussion progresses as follows.
Certified Public Accountant (CPA) :
The CPA certification earns great respect in the profession because it is not only the most well known but also the most popular in the profession. Apparently, this certification designates unique capabilities to the holder. In fact, it is only this certification that has the "capability to not only write audit reports but also give a professional opinion on the financials of public listed companies" (Fay, 1992). This is to say that only the CPAs are licensed by state governments to write audit reports, give prepare and sign tax returns, give a professional opinion about the financials of publicly traded companies, and represent clients who have been summoned by the Internal Revenue Authority IRS regarding their tax queries.
An important point to note is that CPA certification is considered a more general designation in the field of accounting. This is to say that CPAs can do all of the jobs and tasks are done by the other certifications. In this regard, CPAs are not as specific as the other certifications. So, to answer the question of specific applicability to either financial accounting or managerial accounting, it should be understood up front that the CPA certification is more applicable to both.
Certified Management Accountant (CMA) :
The CMA certification is a more specific certification that specializes in the internal management of a company. Given the fact that this certification is strictly focused on management, it, therefore, follows that certified individuals cannot prepare nor sign tax returns, conduct audit procedure, or prepare and write audit reports, tasks performed by CPAs. This is to say that the task of CMAs does not overlap that of CPAs. However, CMAs are best suited for both executive management and internal management of the company.
One of the ways CMA is different from CPA is that the exam that the CMA is required to pass to be a certified CMA is half the exam done to become a CPA. This is the case because CMA is specific and specialized in management accounting while CPA is more of a general certification.
Another difference between CMA and CPA certification is that unlike CPA that require accounting courses, CMA does not.
Another difference between the two certifications regards the cost of certification. Apparently, it is slightly less costly, in terms of financial resources, to become a CPA compared to becoming a CMA. More specifically, the estimated cost for CPA stands at $1500 while that of CMA stands at 1,750
To answer the question of specific applicability to either financial accounting or managerial accounting, it should be understood up front that the CMA certification is more applicable to managerial accounting.
References :
Fay, J. R. (1992). Accounting certification, educational, & reciprocity requirements: An international guide. Westport, Conn: Quorum.
