When you are looking to advance your credentials, it can be tricky deciding which one is best for you, or even to find out what all of them are. Here, we have included a summary of the top accounting licenses and certifications that you are likely to hear about during the course of your career. We hope that it brings you some insight into the differences between them, and that they may possibly spark further interest.
1. Certified Public Accountant (CPA)
A Certified Public Accountant (CPA) is an accountant who has gone the extra mile to earn their CPA license. It is a US is license is US-based and is provided by the American Institute of Certified Public Accountants (AICPA) and is earned through passing all four parts of the Uniform CPA Exam with at least 75% per section within an 18-month timespan, as well as the state-specific experience and educational requirements, in addition to the basic 150 College Credit requirement. It is considered the gold standard of US accounting credentials, and is has the most weight internationally.
2. Chartered Accountant (CA)
A Chartered Accountant (CA) is another internationally recognized public accountancy license. In fact, one that is even recognized as being equal or even of higher status to that of the US CPA license within the licensing countries. Each country has their own CA licensing board or institution that legally permits their license holders to perform as a CPA license holder can in the US.
3. Certified Management Accountant (CMA)
A Certified Management Accountant (CMA) license is a designation that is available in the US and Australia. In the US, it is issued by the Institute of Management Accountants US (IMA). The CMA has an emphasis on corporate accounting and management accounting. They are largely involved in helping the business to make risk management, strategic, planning and budgeting decisions. They are not permitted to practice public accountancy.
4. Chartered Global Management Accountant (CGMA)
A Chartered Global Management Accountant (CGMA) is a certification offered jointly by the AICPA and Chartered Institute of Management Accountants (CIMA.) It is a high-level certification that indicates that the holder has achieved an advanced proficiency in management, operations, finance and strategy. However, when it was first created, it only required a paid subscription fee for certification without any need for examination. As such, although it has since gained a standardized exam, it is still not considered to be as prestigious as a CPA license or a CMA certification, at least in the US. However, the AICPA and CIMA are currently developing an association to standardize its value.
5. Certified Internal Auditor (CIA)
The Certified Internal Auditor (CIA) designation is the only globally recognized internal audit designation that is awarded to accountants. They receive it upon passing an exam that authorizes them to perform internal audits. Both the exam and license are issued by the Institute of Internal Auditors (IIA.) Unlike most of the other licenses and certifications on this list, it is available in 13 languages for accessibility.
6. Chartered Financial Analyst (CFA)
A Chartered Financial Analyst (CFA) is a globally recognized certification that is more focused on the finances and investments than accountancy. The CFA is issued by the CFA Institute and license holders are not permitted to work in public accountancy. They can either be self-employed working for individual clients or as part of an organization or firm. They will analyze their clients’ finances to advise them on investment strategy and money management. They will help to manage their clients’ portfolios and to help analyses and manage their investment risks. The exams are considered far more intensive than those of the CPA. Both the course-load and exam are considered far more difficult than those of the CPA exam, especially since far fewer participants pass the CFA exam. As such, it is a highly respected designation in the accountancy world.
7. Certified Financial Planner (CFP)
A Certified Financial Planner (CFP) is someone who has received licensure from the Certified Financial Planner Board of Standards, Inc. This qualifies them to help their clients to manage their personal finances, estates and investments. This is also often referred to as assisting with ‘wealth management.’ Some examples of the areas that they assist with include retirement plans, debt management, investment options, insurance, tax advisement and retirement planning. Although they overlap in some ways, the primary difference between a CFA and a CFP is that a CFA focuses on investment management for institutions and businesses while the CFP is designed around holistic financial planning for individuals. The CFP is also considered to be an easier exam than the CFA.
8. Enrolled Agent (EA)
An Enrolled Agent (EA) is a federally licensed Tax Preparer. Their license enables them to represent taxpayers before the IRS. They are empowered to do so by the US Department of the Treasury upon being issued a Preparer Tax Identification Number (PTIN) by the IRS. The EA license is awarded once the participant has passed all three sections of the Special Enrollment Examination (SEE.) Once acquired, EAs have unlimited practice rights. This means that they can represent any taxpayer they choose. Like CPAs, they must also renew their license and complete continued professional education (CPE) within that time.
9. Certified Fraud Examiner (CFE)
A Certified Fraud Examiner (CFE) is someone who has passed the Association of Certified Fraud Examiner’s (ACFE) CE exam. It is an internationally recognized designation that is focused on forensic accounting. It is more than a desk job, as it entails interviewing suspects and witnesses, as well as acquiring and investigating financial documentation. It is considered to be much easier to achieve than the CPA exam but is also a much narrower designation in terms of the job opportunities that it affords in government departments, insurance companies, financial institutions and healthcare industries, for instance.