Thank you readers for suggesting this topic of CPA vs MBA. I had an article on CPA vs Master’s degree. Given the nature of MBA is quite different, it’s worth a separate discussion:
If it’s not convenient for you to watch the video, here is the text version.
CPA vs MBA: They Lead to Different Career Paths
Accountants go for CPA license because they want to get promoted beyond manager in CPA firms, or that they need a globally recognized qualification to progress to senior finance positions.
Professionals go for MBA degrees because they aspire to take leadership roles in business administration. These days, this can mean a wide variety of career choices, ranging from investment banking, analyst, strategic planning, marketing to general corporate positions.
CPAs focus on accounting, auditing or tax, while MBAs on finance and general management.
What are the benefits of the CPA designation?
If you have basic background in accounting or tax, and are willing to work really hard for a few months, you can pass the CPA exam within 6-18 months.
2. Less Expensive
For a typical candidate, the investment for a CPA license is ~$3,000. This is a lot more affordable than any MBA degree programs.
Also, most candidates study for the CPA exam while working full time. We are easily talking about $100K+ difference here.
3. A Must for Public Accountants
For those who stay on as public accountants or plan to launch their own audit firm, CPA’s privilege of signing audit reports is mandatory for their careers.
4. A Globally Recognized Standard
There is only one Uniform CPA Examination and people know exactly what you accomplished in order to get this qualification.
This compares favorably with MBA where there is a huge difference among the quality (or perceived quality) of MBA programs.
1.Great Way to Switch Career
Unlike the CPA exam, people with different backgrounds can further their studies in an MBA program. If you are bored with your work, or are looking into specific industries that appreciate an MBA degree (e.g. investment banking), it can be a great move.
Decent MBA programs have much incentive to help you land a good job, because they need to build strong relationship with companies for alumni network and for future recruitment. Their career centers offer information sessions, career fairs, and on-campus interviews for internships and full time jobs.
2. Great Place for Networking
Since you will be spending two years with students looking to work in related industries, it is an excellent platform for professional networking.
This applies especially to top MBA programs where such network is invaluable. For MBA degrees from “diploma mills”, or if you take a long-distance program, the benefit is much smaller.
3. Versatile Set of Skills
There is much controversy over the academic value of MBA programs. However, it is a good place to learn a bit of everything in business, such as marketing, business theories and management, even entrepreneurship and other “cool” classes. This is especially helpful for career switchers.
4. No Ongoing Cost
This is a minor point, but unlike CPA where you need to pay for annual license and AICPA membership, there is no ongoing cost other than voluntary donations to your school.
Conclusion: What’s the End Game?
For those who plan to progress within their CPA firms, or aspire to be a senior corporate guy based on accounting technical expertise, the CPA license is an efficient way to get you there.
If you do NOT want to be an accountant, but instead aim for finance or a more strategic vs technical role in the future (CEO/COO vs CFO/Controller), then MBA makes more sense.
Quality of Your MBA Program Matters… A Lot
For Top 10 MBA programs, it’s a no brainer for recruiters. Save some very weird personality, the candidate has already gone through a very stringent vetting process. In other words, 9.9/10 times, the candidate is a great candidate. That’s why top firms hire at these exclusive places.
For the next tier (Top 11-25 MBA programs), you don’t have this wow factor that put your foot in Wall Street, but if you are a strong candidate through networking and previous experience, you still have the same doors open.
Good MBA programs from state schools are helpful if you look for jobs in your region. People understand that you may choose this program based on cost instead of your ability to get into better-ranked schools.
Lastly, if you go to a no-name school, getting an A+ won’t get you much further, because the recruiter will question why you didn’t take the initiative and transfer to a better one.
Can I Do Both?
You can certainly do that if you need more credits to fulfill the 150-hour rule anyway. For this you have an option to go for a Master’s in accounting degree. This decision depends on whether you want to go for an accounting expertise vs a generalist / more strategic skill set.
Our blogger Sumit has an MBA and he is now going for the CPA title. See how his thoughts on why getting this additional qualification after having an advanced degree and a good job.
For Your Further Reading