Types of Accounting Certifications

There are many different types of accounting certifications that professionals can get in the field. Obtaining an accounting certification can provide great benefits.

The accounting certificate is a basic requirement if you hope to gain an entry level position in this particular field. It is also considered the initial step towards a long-term goal of becoming a Certified Public Accountant or CPA. Most accounting certification programs are meant for graduates of bachelor’s degrees. You can be a candidate for CPA examinations after completion of state educational prerequisites. The program generally includes seven up to 10 courses that will provide students with a formidable foundation in finance theories and accounting principles. There are evening classes, part-time or online modules. It will take two and a half years to earn the accounting certification if you are a full-time student.

Primary Certifications

Certified Public Accountant (CPA)

The CPA can specialize in various disciplines. This could be a choice of appraisals, auditing, forensic accounting, tax compliance, risk management, and IT systems. Companies look forward to Certified Public Accountants for compliance with laws; risk reduction; improvement of business procedures; support assessment and appraisal; and, formulation of reporting mechanisms to facilitate decision-making by management.
Each state has distinct academic and practical requirements. An accounting course may be made up of 150 semester hours. Likewise, it is mandatory to pass the examinations for the CPA managed by the American Institute of Certified Public Accountants as well as take on more than 40 hours of continuing professional education annually. The board examinations for Certified Public Accounts are made up of four components:

  • Financial Accounting/Reporting
  • Auditing and Verification
  • Regulation
  • Business Concepts and Environment

Certified Management Accountant (CMA)

Another certification is called Certified Management Accountant. There may be some common characteristics between expertise of the CPA and CMA. However, CPAs are generally more proficient in terms of compliance, transaction accounting and taxation. CMAs conduct more of financial analysis, measurement of organizational performance, budgeting and strategic assessment. Tests are administered by the Institute of Management Accountants.
The major components of IMA are the following:

  • Business Analysis – This consists of global economics and enterprise; quantitative and quantitative methodologies; internal controls; and, analysis of financial statements.
  • Management Accounting and Reporting – IMA includes preparation of budgets; cost management; performance measurement; information management; and, external financial reporting.
  • Strategic Management – This is comprised of strategic marketing and planning; corporate finance; analysis of decisions; and, investment decisions.
  • Business Application – It refers to organization communications; organization management; ethical issues; and, behavioral issues.

You can only obtain this certificate if you are a registered IMA member with bachelor’s degree. It is mandatory to pass the examinations for Certified Management Accountant with two uninterrupted years of experience in management accounting or financial management. You should have finished a minimum of 30 hours of ongoing professional education each year.

Certified Financial Managers

general accounting

Certified financial managers can be appointed as comptrollers, corporate treasurers, or finance officers. The CFM supervises monetary affairs and transactions of institutions. CFMs are often employed by big corporations, banks, government offices, non-profit organizations, and small enterprises. The tasks of the certified financial manager include monitoring of cash flows; preparation of income statements, balance sheets and budgets; complying with regulatory prerequisites; and, administering accounting and auditing.

You can become certified by fulfilling the required formal education. Minimum entry-level credential is the bachelor’s degree in fields such as accounting, business administration, economics and finance although some employers want candidates with master’s degrees in any of these disciplines. The common subjects for the four-year program are asset management, accounting, budgeting, financial reports preparation, and cash flow management. There are pertinent certifications in financial management which include Certified Public Accountant, Chartered Financial Analyst and Certified Management Accountant. Certified financial managers must be adept in financial regulation and reporting. Skills in mathematics, management and communications are also mandatory.

Certified Financial Planner

The Certified Financial Planner is given a certification by the Certified Financial Planner Board of Standards, Incorporated. These are granted to individuals who finish the CFP Board’s preliminary and current certification requisites. Candidates can only become CFP professionals by passing required exams in the fields of financial planning, taxation, insurance, real estate planning, and retirement. The certification calls for hard work as well as experience. Certified Financial Planners should have at least a bachelor’s degree or its equivalent from a prestigious academic institution. You also must finish continuing educational programs every year to maintain certification status.

However, this degree may be finished after you take the examination for CFPs inside five years and is not considered compulsory or is not an eligibility requirement in taking the CFP Board Certification Test. You should also master 100 topics about Integrated Financial Planning. The core curriculum ought to be the equal of at least 18 semester credit hours or six courses. Main topics include the following subjects in Planning:

  • General Principles in Financial Planning and Finance
  • Insurance
  • Employee Benefits
  • Investments and Securities
  • State and Federal Income Tax
  • Estate, Gift and Transfer Taxes
  • Asset Protection
  • Retirement
  • Real Estate or Property
  • Financial Consulting

Certified Internal Auditors

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This certificate is awarded to accountants who perform internal audits in companies. Certified Internal Auditors should conform to several requirements before earning this designation. The first is to pass a written test made up of four parts. It covers issues, risks and solutions that relate to internal audits. The Internal Auditor certification is administered by the Institute of Internal Auditors (IIA). This is the sole credential accepted globally.

Three parts of the test focus on principal global building blocks of internal audits. The last part deals with auditing issues which are specific to the region where the student is located. Internal auditors will ensure that investors can rely on company statistics. The IA also owns the task of guarding against possible irregularities as well as help management alleviate the risks of fraudulent practices in accounting.

Certified Fraud Examiner

The credential of Certified Fraud Examiner is given by the Association of Certified Fraud Examiners or ACFE. The ACFE is the biggest anti-fraud organization worldwide. It is also the major provider of education and practical training in anti-fraud systems. With a membership of more than 65,000, the ACFE is committed to reduce business fraud all over the world and build public confidence on the integrity and objectivity of the accounting profession. CFEs have skills which are not found in any other accounting field. This fraud examiner has the capability of putting together knowledge of intricate financial transactions with comprehension of accounting procedures, legal concerns and resolution of fraud allegations. Fraud examiners are trained to understand how and why fraud takes place. If you are decided in becoming a Certified Fraud Examiner, it is mandatory to complete the following preconditions:

  • You need to be an associate member of the Association and maintain good repute at all times.
  • You must have the minimum academic and professional prerequisites.
  • A candidate should have good moral character.
  • You should agree and comply with the By Laws and Code of Professional Ethicsof the Association of Certified Fraud Examiners.

Enrolled Agent

The Enrolled Agent is a tax practitioner with authority from the US Federal Government and given power by the Department of Treasury. Enrolled agents can represent taxpayers before the International Revenue Service or IRS. The EA status is the highest credential awarded by the Revenue Service and accepted in all 50 states of the country. Lawyers as well as CPAs are also given this license as per the laws of each state by the treasury department. Based on statistics provided by the National Association of Enrolled Agents, there are more or less 48,000 EAs practicing their profession in the country.

It is necessary to obtain a Preparer Tax Identification Number or PTIN and pass all tests if you wish to become an enrolled agent. The exams are made up of three components of the Special Enrollment Examination which encompasses numerous facets of the Internal Revenue Code of the US.

“The Special Enrollment Examination (SEE) is a test that an individual can take to become an Enrolled Agent in the United States. The Enrolled Agent credential is conferred and regulated by the IRS. The exam consists of three parts:

  • Part 1 – Individual
  • Part 2 – Business
  • Part 3 – Representation, Practice and Procedures

All of the questions on the examination are weighted equally and the IRS grades the test on a bell curve. The test results are converted to a scale from 40-130, with 105 representing a passing score. Exam results can be seen right after completion.” Source: (Wikipedia)

At the same time, candidates should have rendered service at the Revenue Service for five straight years. The position must have something to do with the application and interpretation of IRC provisions along with regulations associated with income, real estate, gifts, employment, or taxes on commodities in the domestic market. A background check on the applicant will be conducted. This includes an evaluation of the applicant’s tax compliance both for personal and business matters. It is performed right after you file Form 23, which is the Application for Enrollment to Practice before the Internal Revenue Service, within a year of completing the three-part test.

Certified Government Financial Manager

The professional certification of the Certified Government Financial Manager comes from the Association of Government Accountants (AGA) in the United States. The AGA was established in 1994 to come up with world-class standards for financial expertise and ethics in the government sector. This is the norm by which financial management professionals in government are measured. To date, over 14,000 individuals have been given this accreditation.

It calls for sufficient experience, formal education and tests. All candidates should have a minimum experience of two years in government financial work.

Candidates need to earn a bachelor’s program with 24 credit hours of instruction. The examination is made up of three two-hour examinations. It should be completed within three years of the education. The CGFM must accomplish credits in continuing education to be able to keep up said certification.

The CGFM curriculum certification applies to federal, state, as well as local governments. Since 2001, federal agencies have been authorized to employ appropriated funds to get hold of certifications for their employees. As of 2007, seven states have already recognized the CGFM. These states are Idaho, Mississippi, Missouri, Maine, Tennessee, Virginia and Washington. A number of counties have also accepted the CGFM. Incidentally, many chief financial officers are Certified Government Financial Managers.

Benefits of Accounting Certifications

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According to StudentAdvisor.com,
“If you have a bachelor’s degree and have worked in various businesses over the years, you may have developed a working knowledge of budgets, reporting, and auditing that could be the basis for a new career. Accounting is the underlying language of many aspects of a thriving business—where the money is, where it is budgeted, and how it flows. Adding an accounting certificate to your educational arsenal can extend your present career or help you to start a new one.”

This is really true. Obtaining accounting certifications provide the following benefits:

  • Strategic Flair – Accountants need to think strategically as well as achieve top-level communications expertise.
  • Solving Problems – Accounting can be the key in developing competence with regards to analysis and problem-solving.
  • Career Option – Accounting is a very good career option. Once you secure a certificate, there are endless possibilities and opportunities. It does not matter if you work for a multinational firm, small or medium scale enterprise, or government agency. The credential is always full of integrity and acceptance.
  • Respect – Accountants are respected anywhere and everywhere. The profession is well-respected in all industries.
  • Contributions to Society – Accountants give invaluable contributions to the company, community and society.

It is not easy to become a certified accountant. Besides, there are multiple options such as the certifications that have been discussed in this article. Career planning is very important so at an early stage, you have to decide on one career. Accounting can be one of your prospects if you want to be successful professionally and personally.