This page is designed to give information about two important  designations in the fields of accounting and finance, and some related material:

1. the CPA (Certified Public Accountant);
2. the CMA (Certified Management Accountant);
3. CPE (Continuing Professional Education); and
4. Exam On Demand.

PROFESSIONAL DESIGNATIONS IN ACCOUNTING AND FINANCE

The following is a brief discussion of the CPA and CMA designations. In the competitive world of the 21st Century, while a degree and experience are useful, some sort of professional designation is essential in most fields of endeavor. Two (the BIG two) of the major designations in the fields of accounting and finance are discussed here.  Both involve "exam on demand," a concept which is discusssed more fully following the discussion of the basic certifications.

CPA - CERTIFIED PUBLIC ACCOUNTANT

The Certified Public Accountant designation dates from the end of the 19th Century. It is a designation granted by the various states and administered by the state boards of public accountancy. Recipients must meet certain basic requirements which differ from state to state and must pass rigorous exams set and administered by the American Institute of CPAs (AICPAs). "Public accounting" refers to holding oneself out to perform work in the fields of accounting, taxation, finance, etc. for the general public and the CPA designation is a prerequisite to the practice of public accounting in some states and, even in those states that do not limit the practice of public accounting to CPAs, is considered significant to the practice of public accounting. In addition to the public practice of accounting engaged in by many CPAs, there are a great number of CPAs employed in industry, government, not for profit organizations and other places where accounting, financial and related skills and knowledge are important. At the dawn of the 21st Century, there were over 400,000 CPAs in the United States.

Many other countries have a designation and a well-established public accounting profession similar to that in the United States. Most British Commonwealth countries, for example, have what are referred to as "CAs" (Chartered Accountants).

Each state sets its own requirements to obtain the CPA designation. In general, no state requires that candidates be a resident of that state or a citizen of the United States; a resident of Maryland or Ghana could, for example, attempt to get the CPA designation from Alaska. All states require candidates to pass a rigorous exam set and administered by the American Institute of CPAs and all states impose certain educational pre-requisites to sitting for the CPA exam. These educational requirements differ from state to state but most states require that candidates have at least 120 semester hours of college work; this is usually the equivalent of an undergraduate degree. (A few require 150 semester hours and a few allow candidates to take the exam with less than 120 hours.) In general, the states require that certain courses be included in those semester hours. In particular, most states require that the undergraduate degree amount to a major in accounting with, perhaps, 24 or 30 hours of accounting and related subjects such as tax.

To get more information about the CPA exam, to determine whether you meet the educational requirements for your state, and (for most states) go back to our CPA page and click the link there.

Candidates from other countries must get their educational qualifications evaluated by an outside service such as FACS (the Foreign Academic Credential Service) or Joseph Silny Associates.

All candidates for the CPA must pass a rigorous set of four exams which are administered by the AICPAs in cooperation with the various state boards of accounting. 

To hold oneself out to the public as being a practitioner of public accounting, many states impose two basic requirements: that one obtain the CPA designation; and that one document a certain level of experience. Many candidates want the CPA designation merely for the purpose of dressing up their resume or business card and have no intent to practice public accounting. Those who want to go on to the practice of public accounting often have to prove to the state board of public accountancy that they have had two years experience in public accounting or equivalent.

For more information about the profession and the CPA designation, visit the homepage of the American Institute of CPAs. The AICPAs is a national organization for CPAs. All the states have a comparable professional association and you might find it instructive to visit the homepage of the Greater Washington Society of CPAs. This organization which draws its membership from CPAs in Washington, DC and from the surrounding Maryland and Virginia suburbs is to the AICPAs what a state is to the nation.

CMA - CERTIFIED MANAGEMENT ACCOUNTANT

The CMA is to management accounting as the CPA is to public accounting. The CPA in public practice may be the auditor of a corporation or the tax preparer for a corporation or individual. The CMA is likely instead to be the controller, or chief financial officer of a corporation or trade association and as such may administer the accounting and finance functions, prepare corporate tax and regulatory filings, provide financial advice to top management, implement decision-making and information-processing systems, etc.

The CMA exam is set and administered by the Institute of Certified Management Accountants (ICMA) a branch of the Institute of Management Accountants (IMA) a leading world organization in the management accounting and financial professions. As of the year 2010, there are more than 30,000 CMAs (and counting). Bear in mind that the CMA has only been in existence since 1972 which accounts for why its numbers are small compared to those for the CPA. When you tell your Uncle George that you have just become a CPA, he will know what that is. When you tell him you have just become a CMA, he may think it stands for Certified Medical Assistant. However, the CMA, thanks in part to the high quality and rigor of its exam, is every bit as well known and every bit as prestigious as the CPA among those in the top ranks of accounting and finance.

You can qualify to sit for the CMA exam with a four-year degree in any field including architecture or anthropology. Realistically, however, one should not apply to take the CMA exam unless one has had at least six semester hours of college accounting and it would be useful to have at least two or three courses from the following: economics, finance, management and statistics. While the educational requirements to sit for the CMA are somewhat less rigid than those for the CPA, nobody should tackle this exam with the thought that it is an easier exam than the CPA. Climbers respect Everest not only because it is there, but also because it is tall. Likewise, accountants value the CMA because it is there and because it is difficult and demanding. It is the Mount Everest of Accounting.

The exam is also "on demand;" see below. The exam has four parts. Part two of the CMA is similar to the Business Environment and Concepts part of the CPA and accordingly CPAs who wish to become CMAs may waive taking that particular exam. Candidates who depend on degrees from other countries to sit for the CMA exam must get their educational qualifications evaluated by an organization such as the World Education Service.

For more information about the CMA visit our main CMA page by clicking here.. Many publishers and organizations offer materials to help the candidate prepare for the CMA exam. In addition, some IMA chapters offer coaching programs to help candidates prepare for this exam.

EXAM ON DEMAND

Both the CPA and CMA require passing an exam which is now known as an exam "on demand." This designation - "on demand" - means that after being accepted to take the exam, you schedule an appointment at a "learning center" at a time  convenient to you. You go in and, spending a few hours in front of a devicel like the one at which you are now seated, you answer a long list of objective-type questions. When you are through the CMA, assuming you have put in the appropriate preparation time, the device may tell you "Congratulations, you passed" or, if you haven't put in the time, "Better luck next time." On the CPA exam, instead of being informed immediately of your success or failure on the exam, there is a delay after which you are notified by mail by your appropriate state board of accountancy whether you passed.

GO FOR IT! Both designations are worth getting. You can enroll in outstanding courses for these exams by clicking the links on the left.