CPA vs CA: Which is Right For You?
When you consider a career path in accountancy, you will find a world of acronyms that all look similar.
The truth, however, is that there are clear and important differences between each option.
Discovering those differences and being able to make comparisons can make it easier for you to choose the right career path.
CPA and CA may look like different names for the same thing. They are both terms used by qualified accountants who may work in similar fields.
There is also a fair amount of crossover regarding what these individuals study and what their subsequent careers look like.
In reality, although holders of each qualification may carry out similar tasks in their day-to-day work life, the path that they take to their careers and their prospects following certification could make one more appealing than the other, depending on an individual's personal circumstances and ambitions.
What Is a CPA?
CPA is the abbreviation for 'certified public accountant'.
To receive this certification, you will need to have passed the CPA exam which is overseen by the American Institute of Certified Public Accountants (AICPA).
You will also have to complete the required degree-level studies and work placements prior to taking the exam.
Certified public accountants are often experts in areas such as US income tax, US generally accepted accounting principles (GAAP), auditing and US financial law.
What Is a CA?
CA is the abbreviation for ‘chartered accountant’.
CAs are individuals who have passed CA certification in whichever country they are based and are overseen by the institute of chartered accountants in that country.
In the US, they are overseen by the American Institute of Certified Public Accountants (AICPA).
The United States has agreements in place with Canada, New Zealand, Australia, Mexico and Ireland, which means that individuals from those countries are able to take an equivalency exam before working as a CA in the US.
Once a chartered accountant passes the exam, they will be able to complete most of the same tasks as a certified public accountant, although they may not be quite as well versed in the intricacies of US tax law.
CPA vs CA
Some details to consider when making your own comparisons are:
A CPA is only certified to work within the US. Because of this, the career path is popular with US citizens who wish to work as accountants but have no plans to do so abroad.
A CA is an internationally recognized certification and is the most common route into accountancy for those who are not US residents.
Individuals who have passed the CA examination are theoretically able to work anywhere in the world, although this can be subject to equivalency exams and other requirements being fulfilled in a new country.
‘Certified public accountant’ is a position that is only recognized in the United States, and as such, CPAs are only able to work within the US.
Individuals are overseen by the American Institute of Certified Public Accountants (AICPA).
Because ‘chartered accountant’ is a globally recognized term, CAs can theoretically work anywhere in the world.
Depending on the rules within a particular country, an individual may be required to undertake equivalency exams.
They are overseen by the governing bodies of whichever location they are working in. In the US, this is the AICPA, as for a CPA.
Other examples globally are:
- Institute of Chartered Accountants in England and Wales (ICAEW)
- Institute of Chartered Accountants of Scotland (ICAS)
- Canadian Institute of Chartered Accountants (CICA)
- Institute of Chartered Accountants of India (ICAI)
The exact route to becoming a certified public accountant may vary by state, but it is generally expected that individuals will spend around eight and a half years qualifying for the role.
Generally, they will need to complete five years of education, followed by around two years of work experience, and exams which may take up to 18 months to complete.
There are four sections in the CPA exam:
Auditing and attestation – Financial statements, compliance, processes, auditing and correct internal control practices
Business environment and concepts – Business concepts, professional duties, corporate governance, economic concepts, analysis and the expectations required of a certified accountant
Financial accounting and reporting – Types of transactions, government reporting, government accounting, non-profit accounting and standards of financial statements
Regulation – Federal taxation, business law and ethics
Individuals are required to pass all sections and score at least 75 out of 90 in total.
- US citizenship with a social security number
- Bachelor's degree and at least 120 hours of undergraduate training
Although the exact requirements will vary depending on location, a school leaver who has decided to undertake education to become a chartered accountant will usually need to complete five years of education, followed by two to three years of licensing.
They may also be required to have experience with an employer who is approved by a governing body.
For someone who already holds a degree or has experience within the finance sector, the route is slightly different, with degree holders only being required to complete three years of workplace experience.
In some circumstances, a large amount of workplace experience can mean that the required length of education is reduced.
There are three levels of testing required in order to become a CA:
- Certificate level– Six online tests that cover topics such as accounting, law and principles of taxation
- Professional level – Six written tests that cover topics such as management information, assurance and business technology
- Advanced level– A combination of case study work that documents work experience and two written papers
All sections must be completed and passed in order to become licensed.
Minimum requirements to undertake CA study:
- Undergraduate degree
- Postgraduate CA training or work placement
Salary expectations can vary dramatically depending on where the certified public accountant or chartered accountant is located, their level of experience, whether they specialize in a particular area of accounting and their job title.
Because there are so many variables, it is difficult to say exactly what salary should be expected.
A newly qualified certified public accountant or chartered accountant will understandably earn less than someone who has been doing the job for a long time and has a wealth of experience on their side.
Having said that, it would not be unusual to find individuals who have achieved annual incomes of over $150,000 through increasing their experience and working their way up within a company.
- CPA – $68,500
- CA – $50,500
Ongoing Learning and Long-Term Costs
Both the CPA and CA certifications have ongoing requirements for people wishing to work in those areas.
These include annual license fees and continued learning to ensure that individuals keep up-to-date with changes in financial law and practices.
The exact costs vary from state to state, but it is generally recommended to allow around $1,000 per year for continued learning courses and $50–$500 for annual licensing costs.
A certified public accountant is generally required to complete a minimum of 40 hours per year of continued learning time, with at least four hours consisting of professional ethics training.
Without these continued learning hours, your license would not be valid. Many employers will cover the cost of the learning time.
To hold chartered accountant certification within the US, individuals are required to complete equivalency testing, as well as the same ongoing learning and certification memberships as a CPA.
The requirements will be different depending on where in the world a CA is practicing and will be in line with that country's licensing specifications.
Once you have achieved your certification, there will be a wealth of options open to you.
Training as a CPA will ensure that you are fully versed in all areas of US financial law.
Popular career paths include:
- International accounting
- Forensic auditing
- Assurance services
- Internal auditing
Being a chartered accountant is a globally recognized status.
Once individuals are fully qualified, they are able to work anywhere in the world.
Although the specialization that comes with CA certification is not always as widespread as with CPA certification, chartered accountants are still able to find positions within highly specialized areas of finance and many will choose to begin their own professional practices.
Popular career paths include:
- Corporate finance
- Corporate law
- Independent practice
Summary of Differences Between CPA and CA
|Location||Within the US||Worldwide (subject to equivalency exams)|
|Governing Bodies||American Institute of Certified Public Accountants (AICPA)||Varies depending on location|
|Educational Requirements||5 years of study, 2 years of work placement, 18 months of exams||5 years of education, 2–3 years of licensing, sometimes work placements are also required|
|Licencing Costs||$3,000 initially plus annual licensing and continuous learning fees||Variable depending on which country you live in|
|Salary Expectations||$68,500 (average) with opportunities to achieve six figures||$50,500 (average) with opportunities to achieve six figures|
|Ongoing Learning (annual estimate)||$50–$500 (licensing)
$1,000 (continued learning)
40+ hours per year minimum requirement (4+ hours of professional ethics)
|Within the US, requirements are the same as for a CPA, but fees may vary globally|
|Career Prospects||The opportunity to work in highly specialized areas of finance and taxation within the US||Worldwide opportunities and the prospect of independent practice|
CPA vs CA – How to Decide Which Is Right for You?
It may be that you are unable to decide between the two qualifications and are wondering whether to hedge your bets and undertake both.
While this is possible, it won’t really offer any advantages and is just an extra expense when it comes to certification and the required further qualifications.
Many people who are deciding between becoming a certified public accountant or chartered accountant find that it comes down to one main factor: Location of your work.
If you are considering a career outside of the US, then pursuing a career as a chartered accountant will more than likely be the way to go.
As it is a globally recognized position, individuals find it is the best choice as they will not need lengthy periods of requalification or education in order to be able to work.
Often, it is simply a case of completing an equivalency exam and then paying for annual licensing.
Those looking for a career within the US will usually find that becoming a certified public accountant is the logical option.
This particular career path is only recognized within the US and is specialized to deal with the intricacies of US account and tax legislation.
CPA qualification and licensing are also usually required for those who intend to work in US GAAP.
On the surface, it may seem that there is little to choose from between becoming a chartered accountant and a certified public accountant.
They are both qualifications that will enable an individual to work in accounting and taxation and both options offer further education and similar rates of pay.
It is only when you take a careful look at the details that the differences become noticeable.
Which one to choose will entirely depend on your own personal preferences, where you hope your career will take you and your future ambitions.