CPA vs CA. What’s the difference, and which one should you invest in?
The answer: It depends on where you live.
Both the Certified Public Accountant (CPA) and Chartered Accountant (CA) are credentials that you earn through defined study and by passing an examination. The CPA credential is issued solely in the U.S., whereas the CA credential is administered and recognized worldwide.
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Key Takeaways
- Geographic Recognition: CPAs are primarily recognized in the U.S., while CAs are respected in countries like Canada, the UK, India, and Australia. Choose based on where you plan to work.
- Specialization Areas: CPAs are experts in U.S. GAAP and federal tax laws, making them ideal for U.S. accounting practices. CAs specialize in IFRS and international accounting standards, which are perfect for global operations.
- Exam Structure: The CPA exam consists of four sections focusing on U.S. accounting practices. CA exams vary by country and often include multiple levels and extensive practical training.
- Career Opportunities: Both designations offer robust career prospects. CPAs often find more opportunities within the U.S., while CAs have a broader international scope, particularly in Commonwealth countries.
- Cost and Time Investment: Becoming a CPA typically takes 6-8 years and can cost up to $6,000. The path to becoming a CA varies by country but usually involves significant training and can be employer-funded in some regions.
What is the Difference Between a CPA and a CA?
What is a CPA?
A certified public accountant is a professional who has passed the CPA examination administered by the American Institute of Certified Public Accountants (AICPA) and fulfilled all of the education and work experience requirements associated with taking the exam.
These professionals are experts in US GAAP, US federal income tax, and several other areas of US accounting and financial law, such as auditing. Although this certification is respected around the world, it’s a US designation certifying that the professional is competent in US accounting and able to perform auditing and taxation tasks that other professionals are not allowed to do.
You Might Want to Be a CPA and Not a CA If:
- You Plan to Work in the U.S.: The CPA is specifically designed for U.S. accounting practices, including U.S. GAAP and federal tax laws.
- You Want to Specialize in U.S. Taxation: CPAs have specialized expertise in U.S. federal income tax, making them the go-to professionals for tax-related matters.
- You Aim for Flexibility in Various Accounting Roles: CPAs can work in diverse roles, including auditing, tax preparation, and financial analysis within the U.S. framework.
- You Value Recognition in the U.S. Market: The CPA credential is highly respected and recognized across the United States, providing a strong professional reputation.
- You Want to Open More Opportunities in U.S. Public Accounting: To sign audit reports and practice as a public accountant in the U.S., a CPA license is often mandatory.
What is a Chartered Accountant?
A charted accountant is a professional who has passed the CA exam and the required education in his or her country of certification. There are many organizations that provide education and examination for CAs. A few examples include the Institute of Chartered Accountants of Scotland (ICAS), the Institute of Chartered Accountants in England and Wales (ICAEW), the Institute of Chartered Accountants of India (ICAI), and the Canadian Institute of Chartered Accountants (CICA.)
Chartered Accountants in Canada, Australia, New Zealand, Mexico, and Ireland have a reciprocity agreement with the United States. If they can pass an equivalency exam, they can work in the U.S. as CPAs. CAs are experts in IFRS and other international accounting standards. Though they may have a good grasp on US GAAP, they aren’t as trained in this area as CPAs are.
You Might Want to Be a CA and Not a CPA If:
- You Plan to Work Internationally: The CA designation is globally recognized and respected, providing opportunities to work in numerous countries with various accounting standards.
- You Want to Specialize in International Accounting Standards: CAs are experts in International Financial Reporting Standards (IFRS), making them invaluable for companies operating on a global scale.
- You Aim for Opportunities in Specific Countries: In countries like the UK, Canada, Australia, and India, the CA credential is highly valued and often a requirement for senior accounting roles.
- You Value a Global Professional Network: Being a CA connects you with a prestigious and extensive network of professionals worldwide, facilitating international career growth.
- You Seek Roles in Global Companies: Many multinational corporations prefer hiring CAs due to their comprehensive training in international accounting practices and standards.
- You Want to Leverage Reciprocity Agreements: CAs from certain countries can take advantage of reciprocity agreements to work in other nations, including the possibility of practicing as a CPA in the U.S. after passing an equivalency exam.
CPA vs CA Career Path Differences
There is very little difference in their knowledge base and responsibilities. Both CPAs and CAs focus on providing financial services for clients—either personal, small businesses or large corporations. Areas of study and expertise include auditing, taxation, financial reporting, and business/managerial accounting. Both types of accountants can work in the public and private sectors.
If you are a CPA or CA, you can find employment in the government, industry, major public accounting firms, or (in increasingly rare circumstances) as solo practitioners. Chartered accountants typically work outside the United States, while CPAs drastically outnumber CAs in the United States’ workforce. If you want to work in the US, you will most likely want to become a CPA.
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CPA vs CA Time Requirement Differences
It takes a considerable amount of time to become either a CPA or a CA. It’s a little more straightforward for the CPA requirements. You must have completed 150 undergraduate credit hours, and some states require that you also work a given number of hours under the direct supervision of a CPA. You then have 30 months to sit for and pass all parts of the CPA exam. So, it could take about 8-10 years to become a CPA (e.g., five years of undergraduate work, two years on the job, and 30 months to pass the CPA exam).
How long it takes to become a CA depends on what country you plan to practice in and your level of education and professional experience. As an example, the ICAS has four options:
- The direct entry route requires five years of training with an ICAS-approved employer.
- The Graduate entry route for university graduates requires three years of training with an ICAS-approved employer.
- The professional entry route for experienced finance professionals is for established professionals with a university degree (formally recognized as a UK equivalent) or five years of relevant work experience.
- The pathways route allows members of The Chartered Institute of Public Finance and Accountancy (CIPFA) the opportunity to become a member of ICAS and earn CA designation.
CPA vs CA Cost of Certification
CPA Certification Cost
How much it costs to get your CPA license is variable. All states require that you earn a minimum of a bachelor’s degree in accounting or business, including a number of required courses. Almost all states require that you earn at least 150 credit hours as well. Thus, your CPA educational requirements will vary depending on whether you pursue a master’s degree to earn your last 25 college credit hours or simply take more classes in your undergraduate degree program.
The certification process itself can cost upward of $6,000, including a top CPA exam review course and exam fees. One CPA candidate said this when asked about their overall cost: “Probably about $5 or 6k with the testing fees, and different review programs I subscribed to over the course of almost 3 years at least almost 2k were due to a few fails.”
After you pass the exam, you will also need to keep your license valid with continuing education credits each year. These vary in price, but a subscription to one of the best (Becker CPE) will run you around $700 a year.
CA Certification Cost
The cost of becoming a CA depends on the country you live in, your education and work experience, and what organization you are applying to to obtain your credentials.
For example, if you are applying to ICAS and you choose Pathways #1 and #2 (direct entry from school or university), then your employer will cover the costs. If you opt for Pathway #3 (Experienced Professional), the costs are roughly £5,750 – £13,900. Pathway #4 (for CIPFA members) costs £1,035 for the Relevant Expertise Pathway. For the Practical Competence Pathway, the costs are £596 for the training contract, £1,547 – £1,935 for class fees, £292 for the exam fee, and £495 for annual ICAS/CIPFA membership dues. If there are continuing education and licensing requirements, they will be determined by the country in which you are working.
CPA vs CA Salaries
Salaries for both CPAs and CAs depend on your geographic location, job title, and years of experience. Thus, they vary drastically.
According to Robert Half, the median salary for a CPA in the U.S. is $122,000, and the upper end of the average salary for a CA in the U.K. is £58,000 (roughly $75,000), according to Glassdoor. Both certifications have large salaries and upward mobility, and can each make $150,000 or more each year, depending on the position and level of experience.
CPA vs CA: Why Not Have Both?
There’s really no reason to get both of these certifications since they are so similar. You are better off choosing one or the other. Unless you plan to practice both in the U.S. and abroad, you do not need to have both credentials.
The general rule of thumb is that if you are planning to work outside the United States for international companies that aren’t traded on US markets, you should probably look toward the Chartered Accountant certification. On the other hand, if you want to work in the US for/on a US company or a company that is traded on US markets, you will probably need your CPA.
Conclusion
Neither one of these certifications is better than the other. They are simply different and used for different purposes. You can expect to make about the same salary with both credentials, given that the location, job position, company, and work experience are the same. It really comes down to what you want to do and where you want to work. If you want to work in IFRS and non-US GAAP markets, you should go with a CA designation. If you want to work in US GAAP, you will most likely be required to get your CPA license.
FAQ
The main difference is geographic. CPAs are primarily recognized in the United States, while CAs are recognized in countries like Canada, India, and the UK.
Both exams are rigorous, but the difficulty can vary depending on your background and study preferences. The CPA exam has four sections, while the CA exam often involves multiple levels and comprehensive training.
Salaries for CPAs and CAs can be quite similar, but they depend on factors like location, experience, and industry. Generally, both designations are highly respected and offer competitive salaries.
Yes, CPAs can work internationally, especially in countries that recognize the CPA designation. However, CAs often have a broader international recognition, especially in Commonwealth countries.
Both CPAs and CAs have excellent career prospects. The best choice depends on where you plan to work and your career goals. CPAs may have more opportunities in the US, while CAs are highly valued in many other parts of the world.
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