There’s nothing easy about the CPA exam. It requires hours of study – 400 minimum is recommended – and even then, the passing rate for all four parts hovers right around the 50% mark.
Having the Certified Public Accounting credential does open the door to a wider range of accounting jobs, but even so, it’s not a prerequisite. So the temptation can be great to bypass the investment of both time and money.
Now, a study by the Institute of Management Accountants, shows that the effort put into earning a CPA or the Certified Management Accountant (CMA) designation – or both – pays off handsomely.
“Consistently, holding some type of certification has a positive impact on compensation,” the IMA found.
How big an impact? Big, according to a survey the IMA conducted. For young accountants under 30 the median pay is $65,500. Add a CMA certification and median pay jumps to $80,000. The CPA bump is nearly identical at $79,925. For those holding both a CPA and a CMA, median pay came in at $97,250.
With more experience, the dollar differential is even more substantial. Median pay for a mid-career accountant without either a CMA or CPA is $101,500. With both, median pay jumps to $156,250.
“Overall, respondents holding only the CMA or the CPA earned 127% and 182% higher median additional compensation, respectively, above base salary compared to those holding neither certification,” the report notes.
“For all age groups, holding the CMA, the CPA or both certifications has an incremental, positive effect on median total compensation. This indicates that employers value employees for having the CMA, CPA, or both and are willing to compensate employees for holding these certifications.”
The report provides a rich array of other data about pay, including a section on gender pay differences. Comparing median base pay and total comp by gender and age, the report found women accountants of all ages earn 84% of what their male counterparts earn.
The differences are wider among older accountants, but the gender gap exists among even the youngest are groups. Women 20-29 years old earn a median total compensation that is 91% of the men in that age group.
Looking at it region by region, the IMA found women in the Northeast do better financially than the men. They earn 118% of what men earn in base pay and 105% in total comp.
Women though might want to avoid the Plains states. There the gender gap is the widest with women earning a mere 70% of what men are paid.