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you've made the decision to go back to school and
further your business education. But do you do it
by going for your CPA or your MBA? For many these
days, that's the million dollar question. We'll
say right up front that there's no right answer.
It depends on you, your background, what you want
to do and where you want to go. With that said,
we can help with the generalities and by explaining
the differences between the two degrees.
Going for an MBA generally takes twice as long as getting certified as a CPA. MBA programs usually require a minimum of 10 months and can take as long as several years (if going part-time).
On the other hand, most states require 150 hours of education after a candidate has completed his or her undergraduate studies for certification as a CPA. Becoming certified as a CPA also requires you pass a test. Although some people are pushing for a similar MBA test, it is years away if it happens at all. Some states also require certified CPAs to do a certain amount of "continuing education" every few years. Many major companies offer these classes in-house, making it easy for their CPAs to stay current, however.
A strong and vocal minority in the CPA profession wants to change the way CPAs are designated. Many in this group would like to see more on-the-job training instead of an additional 120 to 150 hours of class for students who already mastered accounting principals during their undergraduate education. It remains to be seen what this change could mean for the way the credential will be bestowed in the distant future. In the near future, however, the 120 to 150 hours of additional education aren't going anywhere.
The CPA is more of a technical certification than an MBA. A CPA credential focuses on "hard skills" (quantifiable academic subjects) and relates specifically to accounting principals and ethics, although it also provides a decent business background. But a CPA's business knowledge is rarely as in-depth (outside of accounting) as that of an MBA. MBA training, on the other hand, is the opposite of CPA; it focuses on business-organizational and management skills, strategic thinking skills, product development, human resources, quality and information technology-and merely touches on accounting. In addition to these hard skills, MBAs also learn "soft" skills like leadership, teamwork and communication that are essential to good management.
In sum, an MBA is more comprehensive than a CPA, but it can never replace a CPA (for some jobs a CPA is a requirement, no ifs, ands or buts about it). Yet, a CPA with its accounting credential can do almost as much outside of accounting as an MBA can.
If even after you've read this article and looked at what you want a CPA or MBA to do for you, you're still unsure of which degree you should pursue, you may want to consider going for both. Obviously, it will take more time, but having both degrees will make you even more valuable to a company. Many high-level business executives are both CPAs and MBAs. The two degrees are highly compatible; having already earned one (be it the MBA or CPA) will help you when going for the second because many classes are similar.
If you're committed to the accounting profession, a CPA shows you're
serious and you know your stuff. The CPA exam is a difficult test,
and passing it clearly demonstrates to peers and clients your level
of expertise. A 2001 survey by the American Institute of CPAs and
Harris Research showed:
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90 percent of executives see the CPA as
respected by their coworkers. |
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65 percent of executives believe CPAs have
many opportunities to move up the ladder. |
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More than half of executives polled say that
CPAs have a competitive advantage over non-CPAs. |
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Twice as many executives see the CPA as very
important for financial positions, versus the MBA. |
"There are a few strong messages coming from this research," John Morrow, president of the American Institute of CPAs, told The Asset (the magazine of the Missouri Society of CPAs). "First, CPA is the preferred credential for financial management positions. Also, executives are very supportive of the CPAs in their companies. Third, CPAs enjoy the respect of their colleagues, who turn to them on a wide variety of issues."
In an AICPA newsletter, Robert Scott, a CPA and director of finance for Brookfield, Wisc., says, "If someone is serious about utilizing their skills in the accounting field, it would behoove them to pursue their CPA."
If you aspire to management or are already involved in management but want to move up the food chain, an MBA might be the way to go. MBAs also have an advantage over CPAs in international business. More and more often, MBA programs realize the world economy is truly global and structure their programs to prepare students for this reality. No matter what type of business you are in (or will be in the future)-for-profit, nonprofit, family-owned, entrepreneurial or government-your managerial skills can benefit from an MBA.
An MBA works really well if you're looking to switch careers, too. Military officers transitioning to civilian life, government employees looking to bring a business mindset into the office, engineers who want to run projects instead of design for them, writers interested in switching to publishing, and consultants who want to make the jump from analyst to manager are all great candidates for an MBA.
MBAs are still key in the world of investment banking, too. According to John C. Hallenborg, a Los Angeles-based writer and business consultant, recruitment specialists at large and small banks report that about 90 percent of new hires have an MBA.
Now, what will you do?
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