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CPA, MBA, CMA: How Much Do the Letters Really Matter?

To advance, do you need to have a CPA, MBA or both?

As a recruiter specializing in CFO searches, Dave Arnold knows that companies want a lot from their head finance person. In particular, he says, they want real-world experience. For the kind of venture-backed and small-cap public companies he works with, a prospective CFO needs to have had experience with growth companies. Having taken a firm through an IPO, for example, is an especially attractive skill.

So, does this mean experience ever carries more weight than paper credentials like a CPA certification or MBA degree? The fact is they are still highly valued by employers. “Most companies want CPAs and MBAs,” says Arnold, the founder of Arnold Partners in Los Gatos, California. “One or both are almost always present…. I think it’s really important.”

But which one they want – and which one CFOs think companies should want – is a hot debate, and a topic frequently visited by Proformative members through the Questions section of the site. Particularly as of late – after a period when CFOs’ laser-like attention on accounting issues in the early 2000s evolved into a position that requires more strategic thinking at some companies – the backgrounds businesses expect of their new finance chiefs vary greatly.

A Rise in Demand for a Certain Type of CFO
Cindy Kraft, a career strategist with The CFO Coach, says companies are increasingly interested in hiring financial executives with an operational focus. “The MBA gives that broader, general management perspective,” she says.

Indeed, this year, 26 percent of CFOs appointed at large American companies came from a general management position rather than a finance role, up from 14 percent last year, according to an analysis done by executive recruiter Korn/Ferry International for the Wall Street Journal.

But Kraft says companies aren’t simply switching their recruitment from CPAs to MBAs. “The new trend, which probably has been over maybe the past two to three years, has been that combination of the CPA and MBA,” she says.

The importance of a CPA for financial officer positions has much to do with regulations. According to executive search firm Spencer Stuart, the percentage of CFOs holding a CPA certification rose from 29 percent to 45 percent when Sarbanes-Oxley took effect about a decade ago.

Even now, Kraft says, publicly traded companies almost universally want a CFO with a CPA to help them deal with extensive reporting requirements. But with private companies, a lack of certification isn’t necessarily a deal-breaker.

Hiring by Acronym
Kenneth Goldman, a CPA CFO at Black Duck Software, wrote in response to a Proformative question that a CPA symbolizes a level of expertise in the financial world.

“What the CPA designation does add is a somewhat strong (if not absolute) assurance that the CPA CFO is extremely well versed in GAAP accounting,” he wrote. “Another benefit of a CPA CFO who started their career in the audit function of a CPA firm is that auditing teaches a great deal about controls and process, which is critically important in building a rock-solid financial organization.”

Still, it makes a difference how much someone has actually applied all those accounting rules in the real world. Indeed, says consulting CFO Wayne Spivak, passing the CPA exam and then spending time at an accounting firm — something most states require for licensing — can take professionals away from learning management skills. “You don’t know how a company really runs,” he says. “These are things you learn over time. It’s not something you’re going to learn in school.”

Even people like Arnold who see value in certifications say that going back to school isn’t always the right option for senior-level professionals.  By the time they reach their first CFO post, Arnold says, they are usually too busy with their job and family to go back to school. Most couldn’t stop their careers to spend time doing the accounting work that most CPA certifications demand.

Arnold says he wouldn’t necessarily even advise a CFO who ended up between jobs to go back to school for an MBA if it meant being out of the workforce for an extended period. “There could be some negative stigma around that,” he says. “So you have to balance that out.”

As for CFOs who do have CPAs, Arnold says it’s a good idea to keep up with CPE credits, if only for the ability to speak knowledgeably with the company’s accounting firm. “The relationship with auditors has become more contentious,” he said. “A CFO who’s up to date on technical issues is probably more of an asset than somebody who isn’t.”

The Letters That Matter Now May Not Matter Later
For some CFOs, they see a distinct gap between what certifications are needed to do the job and what’s needed to get a new job. In an answer to a recent Proformative question, Daniel Poirier, CFO at Pro Tech International, said that his lack of a CPA made his job hunt two years ago difficult. “Having said that, I eventually did land a job as a CFO through my networking efforts … and my ability to sell myself prior to the [résumé] showing up on their desk,” he wrote. And, he added, “I have found that once in a position of responsibility, the lack of CPA designation has not been a hindrance in the performance of my duties.”

At the same time, Kraft says some certifications that might seem like they would help on the job aren’t particularly helpful in a job search. A CMA, or Certified Management Accountant designation, for example, is rarely a sought-after qualification. She says many people who have a CMA argue that it’s more relevant to running a company than a CPA. “You can believe that,” she says, “But if companies aren’t asking for it, that just flat out isn’t true."

Like Arnold, Kraft says companies are looking for paper certifications, but it’s just as important for CFOs to have a broad range of experiences if they want to be strong candidates for the next job. This means spending time overseas with subsidiaries and taking the time to understand the IT side of the business. “Those are the areas that I think are really important for up and coming CFOs, or when you’re looking for that next opportunity,” she says.

Livia Gershon is a freelance writer in Nashua, New Hampshire.


Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

Warren, I believe most knowledgeable people are familiar with the rigor associated with the CFA credential. It just seems to me that the areas of the CFA specific to security analysis and portfolio management would be overkill for finance professionals not working on Wall Street.

I simply cannot agree with the box you put CPA's in. As with any professional designation, it is the time spent in industry that is most meaningful. Not a single one of the CPA-holding CFO's I've worked for was a "bean-counter". Perhaps that has just been my experience.

Either way, I'm with Cindy on this one - it's all about the perception of the value of the credential. Were the marketplace to dictate that finance professionals obtain CFAs to advance their careers, I expect all those statistics you cite would reverse quickly...

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

In the end, companies are the consumers and financial executives represent the intellectual product they wish to purchase. Cindy is right again - perception is reality. In direct response to the question asked, "The one thing that has been enormously consistent is that each certification appears to add around $10,000 in additional compensation." IMA's 2012 Annual Salary Survey

Topic Expert
Cindy Kraft
Title: CFO Coach
Company: Executive Essentials
(CFO Coach, Executive Essentials) |

Thanks, Regis.

Perception is reality, and until companies begin requiring or preferring the CMA credential over the CPA, how the job candidate feels about his non-CPA credential is through his or her personal perspective ... not through the reality of the job market. And that in no way disparages any non-CPA credential.

Warren Miller
Title: Cofounder
Company: Beckmill Research, LLC
(Cofounder, Beckmill Research, LLC) |

An accounting system serves three masters: (1) the GAAP master, (2) the IRS/tax master, and (3) the management-information master. (3) tends to receive short shrift, esp. in middle-market, non-public companies because the design comes from outside CPA firms whose external reporting needs help little when it comes to managing the business. Moreover, while have the CPA designation helps, it's no guarantee that the holder knows much about GAAP. I am CPA (and a former CFO with an MBA), and I've taught CPAs in 33 states. CPAs tend to be extremely valuable in two arenas: (1) auditing / attest services, and (2) tax services.

Beyond that, however, look out. Here's why: the CFO's job is forward-looking and fraught with ambiguity. CPAs look backwards. That's what accounting is about. If the typical CPA wanted to deal with the uncertainty and ambiguity of the future, they'd've never become bean-counters. What the overwhelming majority of the thousands I've met know about finance, the CAPM, capital budgeting, real options, ASC 805, the cost of capital, and strategic management fits comfortably on the head of a pin; ask most of them to write a coherent business letter, and you'll see that the phrase "writing-challenged" take on a whole new meaning.

That doesn't make 'em bad people. They're not. The vast majority are honorable, honest, upright, hard-working professionals. But they have their place--in accounting--and it's seldom anywhere else, even with an MBA. As a general rule--and there are exceptions, of course (but don't bet the store on finding one)--you can get the accountant out of bean-counting, but you can't get the bean-counting out of the accountant.

I should mention that I'm also a former CMA. The CMA tests I took in 1991 were far harder than the CPA exams in that same era, which, if one studies hard and prepares, is truly not difficult. Yeah, there's a lot of material, but the exams are not hard.

(N.B.: The AICPA has a passing "quota." So a certain percentage of test-takers will always pass. That ensures the continuing flow of annuity dues revenue to the American Institute of CPAs, whose CEO, Barry Melancon, was selected as one of the worst CEOs in America by BusinessWeek magazine in its 1/13/2003 edition.)

But, in recent years, the Institute of Management Accountants, which issues the CMA designation, has made the unfortunate decision to shorten its test and reduce the qualifications required to sit for the CMA exam. When I read that it was doing that, I promptly shredded up my CMA certificate and quit the IMA. Management accounting is a vital area for any CFO to know, but the 'new' CMA certificate carries no assurance that the holder has a clue about management accounting. . .or GAAP, either, for that matter.

Anyone interested in a real education in finance--that will provide the kind of knowledge one needs to be a good CFO--should sit for the exams leading to the Chartered Financial Analyst (CFA) designation. Those tests make the CPA exams look like a first-grade 2+2=4 exercise. They also run circles around the typical M.S. in finance degree. Only 19% of those who start the CFA curriculum finish it. It's far and away the hardest, most demanding, most rigorous series of tests I ever took (including Ph.D. comprehensive exams), and it's the professional accomplishment of which I'm the proudest. And I achieved it when I was 62.

BTW, something fewer than 5% of CFA charterholders are also CPAs. About 12% of CFA candidates, however, are CPAs. Do the math: about 8% of CPAs who start the CFA curriculum complete it successfully.

Joshua Schustak
Title: Financial Director
Company: Stepping Stones for Living
(Financial Director, Stepping Stones for Living) |

If 12% of CFA candidates are CPAs and only 5% of those CPAs pass the CFA..wouldn't the percentage of CPAs that pass be equal to 5%/12% = 42%?

Akira Liu
Title: SP Intern
Company: Sanofi
(SP Intern, Sanofi) |

Thank you for the comment. It really helps me.

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

These letters are just a "baseline." If they get you in the door for an interview, you have to take it from there. They will not get your hired, unless you are in a dead heat for a position and the certification puts you over the top.

Topic Expert
Cindy Kraft
Title: CFO Coach
Company: Executive Essentials
(CFO Coach, Executive Essentials) |

Perception is everything, and if - in the eyes of the company who is hiring - it is requiring a CPA rather than a CMA, then the value of a CMA lies with the holder of the credential, not with the organization doing the hiring.

It has nothing to do with the value of the credential itself. It has everything to do with the perception of the value of the credential by the company.

Ronald LaPlante
Title: Auditor
Company: Self-employed
(Auditor, Self-employed) |

I would like to offer a rebuttal to this article, because it is quite misleading about the CMA. Please see my LinkedIn page if you wish to offer this opportunity. I have both of these certifications and several more and reside in the Raleigh area.