For someone, who’s decided to enter the accounting profession the sheer number of options from an educational perspective can be daunting. While the Certified Public Accountant (CPA) designation remains the most prevalent in the US there are a number of other designations that are growing in popularity. These specialist designations recognize that different types of accountants need different skill sets and specialized training for that skill set is increasingly useful. Below is a discussion of several of the most common accounting certifications.
CPAs make up the largest body of accountants in the US. This accounting certification is awarded at the state level and is known for being difficult to obtain, more so in some states than others. A bit of a catch-all designation the CPA covers many different aspects of accounting, including financial accounting, management accounting, and tax accounting. This certification will also generally lead to the highest salaries as when hiring for some roles companies will only consider CPAs.
CIAs are a growing body of accountants as a result of the increased internal auditing requirements public companies face as a result of the Sarbanes Oxley Act. Private companies also find a use for CIAs as their focus on efficiencies and identifying areas where the company could lose money is a valuable skill set for any employer. Effective internal controls are recognized as a critical factor in growing a successful business where the management team cannot be everywhere at once, and as a result, CIAs are finding a greater role in companiesÃƒÂ¢ finance teams.
This designation is actually awarded by the IRS and denotes individuals who have a particular competency in taxation. While CPAs may practice tax, among other things, an Enrolled Agent is a tax specialist with intricate knowledge of the tax code. As companies strive to minimize their tax bill through efficient tax management Enrolled Agents are finding a larger role in both private and public companies.
For those interested in a career in government finances, be it at the federal, state, or municipal level, this is a critical designation to have. Government accounting is actually very different in some respects from that required by private sector companies. Specialized training in this field is almost a necessity, as someone without it coming from the private sector will require a significant amount of on-the-job training to get up to speed when working in government finances.
CMAs focus on the internal management accounting that takes place in all companies and emphasize gathering and interpreting the financial information required to effectively run the company. Meanwhile, external financial reporting, in which many CPAs focus, emphasizes providing the most accurate external picture of the company for other parties (i.e. investors, banks, and the IRS). In a sense, they are looking at two sides of the same coin, one focused within the company and one focused outside of the company. CMAs often earn on par with CPAs as their skill sets are just as valuable, and even more so when the role is for someone doing internal reporting. Several other noteworthy designations include:
In addition to the formal designations discussed above, there are also a host of bookkeeping and accounting certifications available from schools everywhere. Keep in mind, however, that these certifications, while easier to obtain, do not come with the same employment prospects and salary expectations as those discussed above. That is not to say that they are not worth getting, one just has to ensure that they are seeking training that is in line with their working aspirations.