If you are or considering becoming an accounting and/or finance major, you have probably heard a lot of acronyms thrown around in reference to different professional certifications (read: exams) that you can acquire. This article is aimed at breaking down some of the confusion and clarifying what each one is. This is the first step in deciding which one(s) may be for you.
- CPA- Certified Public Accountant. This is the flagship certification for those who want to actually be accountants. Professions include tax and audit, though the CPA is widely enough respected that many corporate lawyers, business consultants, tax attorneys, and personal financial planners have it as well. The CPA is quite difficult with four 4-hour exams which must be passed within 18 months of each other. Pass rates for each of these exams is between 40-60%, though Grove City College students tend to have much higher pass rates. The exam sections are audit, financial accounting and reporting, tax and regulation, and business environment and ethics. This is a very valuable certification, but you have to really want it. If you are considering or would like the option to take the CPA, look into your state’s CPA eligibility requirements for undergrad course work. Some states (such as CO) require you to have specific courses under your belt that the College does not include in graduation requirements.
- CMA- Certified Managerial Accountant. This is similar to the CPA, but with more of a managerial emphasis. This means that costing, cash flow, inventory, and those types of issues are more heavily emphasized. The CPA is incredibly broad, the CMA is less so. Professions are similar to those of CPAs; financial analyst, managerial accountant, corporate controller, financial manager, and many others.
- CFP- Certified Financial Planner. Usually, to use this certification you must also pass other financial licensing exams such as the Series 6 or Series 7. A CFP works with individuals and families to provide financial solutions to their problems and to grant them added security. A CFP works in a very personal role with their clients and has a lot of responsibility for giving them good recommendations. CFPs understand finance and financial products, are empathetic and caring, and have strong people skills.
- CFA- Chartered Financial Analyst. The CFA exam is sort of like the CPA of finance. There are several exams (called levels) which must all be passed. CFAs become experts in finance, and often work as asset or portfolio managers, financial managers, risk management experts, or consultants.
All of these paths provide excellent career opportunities, but you may fit one of them more than others. Spend some time reading about each one, finding out who you may know with a background in one of these areas, and considering your end goal to help you decide!
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