College students are often confused between working for their CPA license or earning an MBA degree.
Instead of looking up to someone else for advice, it is preferable that you take the time and think about your future plans. Let’s look at the basics of each program so that you can relax and only think about your future possibilities.
What is a CPA?
The Certified Public Accountant (CPA) exam, administered by the AICPA, is the highest level of proficiency in the field of Accountancy across the globe. A CPA can act as a tax consultant, financial advisor, business consultant, and they can also take up any other position related to finance in a company.
The CPA exam thoroughly prepares you for the core concepts of accounting and tests your capability to apply your learning in the field of auditing and accounting
What is an MBA?
A Master of Business Administration is typically a two-year degree course offered by business colleges to prepare you for the field of business. It is a post graduate degree course which comes under the management spectrum. This course deals with disciplines such as- Human Resource, Management, Finance, Business and Banking. The study fields of the MBA is not restricted to finance and involves subjects like organizational behavior, economics, marketing, and quantitative analysis.
CPA vs. MBA: 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.
On the other hand, location plays a big role in compensation for an MBA – 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. While that may seem underwhelming, keep in mind that you will see your income potential increase significantly as you gain work experience. On average, if you have an MBA, you can expect more sizable raises and advancement than your peers without this credential.
CPA vs. MBA: Certification Costs
It is difficult to put a price tag on becoming a CPA. 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.
Costs of earning an MBA are highly variable and depend on factors like geographic location, private versus public institution, the 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 the 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.
CPA vs. MBA: Time Requirements
To become a CPA, you must have completed a minimum of 120 undergraduate credit hours. Some states also require that you must also have a given number of hours worked under the direct supervision of a CPA. You will also have a total of 18 months to pass all four sections of the CPA exam. In total, it could take you about 8 1/2 years to become a CPA.
There is no specific time frame for completing an MBA degree program. It will all depend on if you study full or part-time, and if you attend classes on campus or take them online. Some schools also give you 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 certification exam that you will be required to pass upon completion of your degree. It means you simply graduate from your program. On an average, it takes about 2-3 years to complete an MBA program.
So, Which One is Better for You?
An MBA will be a better choice if you are interested in management opportunities or general business consulting. But, if you are strictly a “numbers cruncher,” and especially if you want to work for a Big 4 accounting firm, you should think about becoming a CPA. If you, as a CPA, want to gain a better understanding of business operations and become employable in more industries, it would be useful for you to get an MBA. Similarly, if you get an MBA with a concentration in finance and are planning on specializing in taxation or corporate finance, it makes perfect sense to go on to become a CPA.
You just have to decide what’s best for you and your career and take your interests, aptitudes, finances, and career objectives into consideration.
Hope the above article is helpful to you. If you have any queries, feel free to comment in the section below. Happy Learning!
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