Many business students and young professionals want to advance their careers, but they aren’t sure what path will help them the most. Some argue that a masters degree will propel them up the ladder and allow them to command a higher salary while others advocate for the respect of the certified public accounting designation.
Both of these career paths are great options for people who want to take over the business world and both of them tend to focus on different career paths. Let’s take a look at each option and see which one is right for you!
What is the difference between a CPA and an MBA?
One is a credential and the other is an academic degree. CPA (Certified Public Accountant) is a credential that you earn by fulfilling educational requirements, experience qualifications, and passing an exam that designates you as being qualified to perform duties associated with public and private accounting. The exam consists of four parts: Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting and Regulation.
An MBA (Master’s of Business Administration) is a post-graduate degree that focuses on a broad scope of business disciplines (typically): Finance, Accounting, Marketing, Information Technology, and Organizational Management/Operations. To be an accepted into an MBA program, you have to meet a school’s requirements that weigh your undergraduate GPA and performance on the GMAT. (Some schools may also consider work experience.) MBA programs are widely offered by universities and colleges worldwide whereas the CPA exam is administered by the AICPA (in the U.S.)
CPA vs MBA Career Path Difference
If you have an MBA, you have a greater choice in career opportunities, depending on your area of specialization. If you have an MBA, you could work as a management consultant, marketing manager, investment banker, chief information officer, operations manager or financial advisor (to name only a handful.)
If you are a Certified Public Accountant, some job titles might include CFO, auditor, tax advisor or forensic accountant. Since the areas of study for an MBA are more wide-ranging, there are more career choices. If you have a CPA license, your options will be focused on accounting and finance. If you get both of them, you’ll have the world at your disposal.
CPA vs MBA Time Requirement Differences
There is no specific timeframe for completing an MBA degree program. How long it takes will depend on if you study full or part-time and if you attend classes on campus or take them online. Some schools also give credit for work experience which can knock off some of the hours required for degree completion. Since an MBA program is a master’s degree program, there is no type of certification exam that you will be required to pass upon completion. You simply graduate from your program. On average, it takes 2-3 years to complete an MBA program.
Becoming a CPA takes longer is much more involved. You must have completed 150 undergraduate credit hours and some states require that you must also have a given number of hours worked under the direct supervision of a CPA. You will also have 18 months to sit for and pass all four parts of the CPA exam. In total it could take about 8 1/2 years to become a CPA (e.g. five years of undergraduate work, two years on the job and 18 months to pass the CPA exam.)
CPA vs MBA Cost
Costs of earning an MBA and CPA are highly variable and depend on such factors as geographic location, private versus public institution, number of hours required, etc. Figure in other costs such as books and/or access to online materials, technology costs, study courses and if you plan to live on-campus, the cost of room and board. The average cost of tuition is around $58,000. Other considerations are income and work experience that you will forego if you choose to become a full-time student. That is why part-time, online and, accelerated MBA programs have become so popular.
It is less definitive to put a price tag on becoming a Certified Public Accountant. The tuition at the school where you get your undergraduate degree will be part of the equation. On top of that, you will have the costs associated with any prep courses you might take to prepare for the CPA exam. You can figure this will cost about $2,000. Regarding the exam itself, the costs fluctuate vastly from state to state. Some states have a registration fee that is broken down by how many section(s) of the exam you plan to sit for. There are additional fees for retakes. (You will need to check with your state board of accountancy.) On average, it will cost about $1,500 to sit for all four sections.
Finally, there is the cost of the license itself, which averages about $150. Don’t forget that in order to maintain your license, you will be required to attend CPE courses on a regular basis for which you will incur additional costs. Some states, like Connecticut, require 40 hours of CPE each year. That could cost as much as $4,000 in continuing education each year.
|Designation||Undergraduate Tuition (120 hrs)||Undergraduate Tuition (30 hrs)||Graduate Tuition (30 hrs)||Exam Fees||Prep Course Fees|
|MBA or MACC Degree||$48,000||0||$58,000||0||0|
CPA vs MBA Potential Salaries
It’s no great secret that having an MBA or CPA can open more career doors and increase earning potential. Years of experience and where you work will have some impact. If you are a CPA you will earn approximately 10% more than your non-CPA counterparts. The median salary for a CPA is $62,123 per year.
For a Master’s of Business Administration, “location, location, location” plays a big role in compensation – meaning that the school you attended (based on national ranking) can impact how much you make. However, for the first year after earning your MBA, you can expect to receive employment offers on an average of $50,427 per year. While that may seem underwhelming, keep in mind that you will see your income potential increase significantly as you gain work experience. On the average, if you have an MBA, you can expect more sizable raises and advancement than your peers without this credential.
|Designation||Average Starting Salary||4-Year Average Salary||10-Year Average Salary|
|MBA or MACC Degree||$51,396||$60,541||$98,800|
CPA vs MBA: Which is Better?
There is no clear-cut answer to this question. It all depends on your career interests and aptitude. If you get an MBA with an emphasis in marketing and your goal is to be a public relations director, there is probably little impetus to expend the “blood, sweat and tears” to get a CPA credential on top of that. Likewise, if your passion is auditing, getting an MBA will provide you with a well-rounded business education but it may not be worth the cost.
CPA vs MBA: Why Not have Both?
You can. Again, this leads back to what do you want to do? If you are interested in management opportunities or general business consulting, then an MBA would be the better choice. On the other hand, if you are strictly a “numbers cruncher,” you should become a CPA, especially if you want to work for a big four accounting firm. If you are a Certified Public Accountant who wants to gain a better understanding of business operations and become employable in more industries, getting an MBA would be useful. Likewise, if you get an MBA with a concentration in finance and plan to specialize in corporate finance or taxation, it makes perfect sense to go on to become a CPA.
There are a few options to make this a little easier. Since you must earn 150 credit hours to become a CPA, you can begin fulfilling this requirement by starting on your MBA. If you have been led to believe that trying to tackle both at the same time is not feasible, think again. Schools are getting more creative and putting together programs that combine disciplines (e.g. MBA/CPA, MBA/MD, etc.) so with a little research, you might find the perfect program that will allow you to earn both an MBA and CPA at the same time.
If you are currently employed, look into your company’s benefits package to see if tuition reimbursement is offered. While this perk is mostly associated with large corporations, you might be surprised to discover that your company has funds available. However, be prepared to foot a percentage of the bill yourself as tuition reimbursement averages anywhere from a few hundred to a few thousand dollars. Also “read the fine print” — often companies have a stipulation that if they finance your education (particularly in the case of a highly marketable MBA) that once you get your degree you must remain employed there for x-number of years or risk having to repay the tuition. The same strategy applies to Certified Public Accountants. Look into what types of professional expenses reimbursement is provided by your employer. The state you work in will have a number of CPE hours that you must acquire during a given time period (e.g. 20 hours in 2 years) to maintain licensure. The cost of continuing education (and licensure) might be covered by your employer.
If your employer doesn’t provide tuition reimbursement, you still might be able to make the case for them to subsidize your higher education. If you do your homework and can demonstrate what value an MBA level of knowledge will bring to the organization, there is a chance that your employer will agree. Whether or not you’re a CPA and you want to get an MBA then do a personal cost-benefit analysis. Assess the job market and make a determination as to whether or not it is worth it. Pursuing an MBA degree involves a huge time commitment and again, the result will be determined on your present job, positions you aspire to and whether or not your company will pay for your education.
Is it worth it? What do you want to be when you grow up?
There is no solution to the CPA vs MBA quandary. There is an exhaustive body of research that describes the pros and cons of having one or the other or both. Network and talk to people who have an MBA, CPA or both and see what advice they offer. You have to decide what’s best for you and take into consideration your interests, aptitudes, finances and career objectives.