After graduating in the field of commerce, students are often confused about what industry they want to work in. Over a decade ago, there were only a few options for such students to pursue to have a successful career, but that is not the case anymore. However, despite such a growth in the number of career options, the core industries in the field of commerce remain to be finance and accounting.
Chartered Financial Analyst (CFA) is an international qualification pursued by those that aim to work in the investment industry & portfolio management whereas Certified Management Accounting (CMA) is for those that are more inclined toward the accounting aspect of finance. Since CFA and CMA are specialisation courses in different fields within commerce, you should analyse where your interests are before deciding between the two. If you are currently torn between these two courses, let’s look at a simple comparison to help you out.
Let’s first take a look at both of these courses individually –
Chartered Financial Analyst (CFA)
The Chartered Financial Analyst (CFA) Course is one of the most reputable finance course to pursue, especially for those who are looking to specialise in the investment industry and portfolio management. This course is perfect for those who are looking to pursue a career in investment banking and financial management.
In fact, because of the immense possibility of growth and the exciting working environment, a majority of finance professionals are opting for this course.
The eligibility criteria for CFA is quite simple, if you are in the final year of graduation, you can start preparing for your CFA level 1 examination. However, in certain cases, you may be eligible for CFA without graduation provided you have a minimum of 4 years of relevant work experience.
2. Course Structure
There are 3 levels of examination (CFA Level 1, CFA Level 2 and CFA Level 3) that you must clear to complete CFA. All three levels cover the same 10 subjects, however, the marking value for each subject in each level will differ. The subjects covered in CFA are –
- Ethical and Professional Standards
- Quantitative Methods
- Financial Statement and Analysis
- Corporate Issuers
- Equity Investment
- Fixed Income
- Alternative Investments
- Portfolio Management & Wealth Planning
CFA Level 1 – Only MCQs (no negative marking)
CFA Level 2 – MCQs in a case study format
CFA Level 3 – MCQs in a case study format + Subjective questions
CFA is a truly global certification. A CFA charter can land you in countries like the USA, India, Hong Kong, Canada and UK. Moreover, a big advantage of pursuing CFA is that even after completing just one or two levels of CFA, you can start working in the field of finance for a higher salary as compared to a regular graduate. If you combine this course with other qualifications such as CA, ACCA or MBA, the number of lucrative career opportunities for you will only increase.
Certified Management Accounting US (CMA)
A Certified Management Accountant (CMA) is a professional who is authorised to look over the strategic management and corporate financial accounting of a company. It is a globally recognised qualification and the certification is given by the Institute of Management Accountants (IMA), USA. In the last few years, the demand for CMA qualified professionals has increased tremendously, not only in India but also in various countries across the world. The subjects covered in CMA help professionals collect all the necessary accounting information in an organisation and enable them to make recommendations to their employer. This further helps the organisation to make sound financial decisions.
You can start studying for CMA quite early in your career. Moreover, because it is only a 2-part exam, you can complete it within a year.
Students can start studying for CMA after completing their 12th grade. However, to be certified as a CMA, you will need a Bachelor’s degree, 2 years of work experience and you need to apply for the IMA membership.
2. Course Structure
The CMA Exam is taken in two parts i.e. CMA Part 1 and CMA Part 2. Both of these parts are divided into 6 subjects each specified as follows.
CMA Part 1 – Financial Planning, Performance, and Analytics
– Financial Reporting
– Planning, Budgeting and Forecasting
– Performance Management
– Cost Management
– Internal Controls
– Technology and Analysis
CMA Part 2 – Strategic Financial Management
– Financial Statement Analysis
– Corporate Finance
– Decision Analysis
– Risk Management
– Investment Decisions
– Professional Ethics
CMA (USA) is one of the highest management accounting qualifications in the world. This qualification is recognised in countries like China, India, the UK, Canada, as well as the Middle East.
To put things into perspective, here’s a short comparison of the points we discussed earlier.
|Course Structure||– CFA Level 1
– CFA Level 2
– CFA Level 3
|– CMA PART 1
– CMA PART 2
|Duration||2-3 years||6-9 months|
|Eligibility||You can start in your final year of Graduation||12th Grade|
|Exam/Registration Fee||USD 450
*to be changed to USD 350 effective from 2023
|Average Salary*||INR 6 – 7 lpa||INR 5 – 7 lpa|
|Average Passing Percentage||45-55%||50%|
|Job Profile||– Investment Banking
– Corporate Financial Analyst
– Portfolio Manager
– Risk Analyst/Manager
|– Cost Accountant
– Risk Management
– Wealth Creation
– Asset Management
|Exam Dates||Level 1: Feb, May, Aug, Nov
Level 2: Feb, Aug, Nov
Level 3: May, Aug
*Salary Source – Payscale
Now that you have some more information about both of these courses, let’s understand which course would be the right one for you based on your current qualification, your goals and your interests.
Also Checkout : US CMA vs CMA India: Which is Better Career Option ?
When Should you Select CMA US?
If you are planning to get into the field of management accounting, courses like CMA or Chartered Institute of Management Accountants (CIMA) are probably among your list of selected courses. CMA or CIMA will get you involved in the management side of accounting and business of any company or industry.
If you have recently passed your class 12th or if you are currently pursuing your graduation, you are eligible to enrol for either of these courses, but CIMA will take you longer to complete as compared to US CMA. Moreover, statistically, the number of people pursuing US CMA is much larger than the number of students pursuing CIMA.
So if you are a student looking to enter the field of management accounting in a relatively short amount of time, pursuing US CMA would be the right choice for you. If you are interested, you should definitely check out our US CMA course.
When Should you Select CFA?
When talking about the finance sector, CFA is one of the most recognised courses to be pursued across the world. A large number of companies, especially hedge fund management companies or finance and accounting firms, are always looking to hire professionals that have completed CFA. So if you are looking to get into the field of financial reporting and financial management, pursuing CFA is definitely a good idea.
Whether you are pursuing CFA as the only course after graduation, or if you are planning to become a CFA after doing CA, ACCA or even MBA, the scope for growth in your career in CFA is incredibly large.
In fact, professionals who have pursued CFA after such courses are known to earn significantly more in their respective fields as opposed to what they normally would if they hadn’t done CFA. With CFA + MBA or CFA + ACCA, you can start working as a hedge fund manager or even an investment banker with much higher than what an ordinary graduate may earn. If you want to learn more about ACCA, definitely check out our ACCA course details article for more information.
CFA is an excellent choice of career for those who are looking to work in an exciting and fast-paced career and lifestyle. If you have recently completed your graduation or are appearing for your final semester, you may already be eligible to become a CFA. Interested? We highly recommend checking out our Chartered Financial Analyst (CFA) course.
What is the difference between management accounting and financial reporting?
Management accounting deals with the internal decision-making process involved in managing the financial landscape of an organisation. Financial reporting is the process of putting together the financial reports and results of the company for compliance with regulations and laws.
Which course can be completed faster? CFA or CMA?
CMA can be completed in under a year whereas CFA can take 2-3 years.
Is CFA equivalent to a Master’s degree?
Yes, in the European Union and the United Kingdom, a CFA qualification is considered to be equivalent to a master's degree.