If you are planning to initiate or enhance your tax career, then you would benefit from earning an accounting certification. Holding an accounting designation allows you to distinguish yourself from your peers, verify your expertise, and charge more for your services. But which certification is the best choice for a tax professional?
You have many options to choose from. For example, the Internal Revenue Service (IRS) awards the enrolled agent (EA) designation to qualified tax practitioners. Additionally, the state boards of accountancy grant the Certified Public Accountant (CPA) license, while the Institute of Management Accountants (IMA) distributes the Certified Management Accountant (CMA) certification.
So, in order to decide between the EA vs. accounting certifications, you must be well aware of all your options and what the process of earning each involves. And you can use this guide to collect that information and make your decision.
As mentioned, the enrolled agent designation comes from the IRS. In fact, the EA is the highest credential the IRS offers, so it is an excellent choice for tax professionals. Therefore, as a potential or promising tax professional yourself, the EA could very well be the accounting certification for you. B
ut to be sure, you should consider the details of the EA and compare them to other popular accounting certifications. Consequently, the first step in this process is familiarizing yourself with the EA.
Because the EA is a tax credential specifically, it will serve as the framework for comparisons of the EA vs. accounting certifications. So, laying the foundation for an understanding of the EA involves discussing the professional responsibilities of an EA, the benefits of holding the designation, the requirements for earning the designation, and the process of preparing for and passing the EA exam.
The National Association of Enrolled Agents (NAEA) defines an EA as a tax practitioner holding a federal government designation testifying to their technical expertise in taxation. And an EA has the ability to represent taxpayers before all administrative levels of the IRS, such as examination, collection, and appeals.
In short, an EA helps people with their business or personal tax returns. And the only matters for which an EA cannot represent individuals before the IRS are those of Tax Court, which requires an attorney.
Most enrolled agents operate tax preparation practices and compete directly with CPAs, bookkeepers, tax attorneys, and other accountants. However, EAs have an advantage over these other professions due to the fact that enrolled agents can work across state borders. In contrast, CPAs and attorneys have to meet the requirements of the state in which they practice, so they do not have the option of working in multiple states. Therefore, national recognition is just one of the benefits of becoming an enrolled agent.
Along with the ability to work all around the United States, another vocational advantage of the EA designation is the enrolled agent salary. According to Payscale.com, enrolled agents typically make between $30K-$75K a year. However, because enrolled agents can perform a variety of in-demand services, their earning potential knows no limits.
What’s more, an EA’s job is very secure, as people have to do their taxes no matter the economic climate. And because they are tax experts who can offer clients unlimited representation before the IRS, EAs give people plenty of reasons to employ them. EAs also don’t have to do as much to earn their title as other certified accountants, as the enrolled agent designation doesn’t include many demanding requirements.
As mentioned, the requirements for earning the enrolled agent credential are not as intense as those of other accounting certifications. You can meet the enrolled agent requirements in 1 of 2 ways:
Deciding how you will earn the EA is easy, as whether or not you have IRS experience will determine your path. So, if you don’t have IRS experience, you must take the SEE, or EA exam, as most EA candidates do. To take the EA exam, you must learn about the exam and prepare for it sufficiently.
The EA exam has 3 parts:
What’s more, each part of the Enrolled Agent exam contains 100 multiple-choice questions (MCQs). These 100 MCQs include 85 scored questions and 15 experimental questions.
The IRS weights the 85 scored questions equally and does not score the 15 experimental questions. Instead, the IRS simply includes the experimental questions to test their suitability for future exams. The EA exam mixes the experimental questions among the scored questions, so you can’t distinguish between them. Consequently, you should answer every EA exam question as well as you can. To do so, you must choose the best answer out of the 4 answer option each EA exam question presents.
Understanding what is on the EA exam is a major component of your preparations. If you don’t know the material, you can’t pass the exam. Thankfully, the IRS EA exam syllabus reveals the topics the exam addresses and how many questions the exam assigns to each topic.
According to the syllabus, the EA exam focuses on federal taxation. What’s more, the exam uses its 3 parts to delve very deeply into this subject matter by touching upon individual and business taxation along with matters of representation.
|Individuals||Businesses||Representation, Practices, and Procedures|
|1. Preliminary Work with Taxpayer Data – 17 questions||1. Business Entities – 28 questions||1. Practices and Procedures – 25 questions|
|2. Income and Assets – 21 questions||2. Business Financial Information – 39 questions||2. Representation before the IRS – 24 questions|
|3. Deductions and Credits – 21 questions||3. Specialized Returns and Taxpayers – 18 questions||3. Specific Types of Representation – 19 questions|
|4. Taxation and Advice – 14 questions||4. Completion of the Filing Process – 17 questions|
|5. Specialized Returns for Individuals – 12 questions|
As you can see, Each of the 3 EA exam parts covers specific taxation content, and that content does not overlap.
Also, to ensure that the IRS SEE Exam always covers appropriate topics, the EA Candidate Bulletin explains that Prometric periodically reviews the subjects tested. This review involves surveying the enrolled agent community and IRS subject matter experts.
As the average enrolled agent exam pass rate per part ranges from 61-86%, many people find the EA exam to be easier than the CPA or CMA exam. Additionally, EA candidates typically find Part 3 to be the least challenging as this part doesn’t test candidates on as much quantitative information.
To become an enrolled agent, you not only need to meet the designation qualifications, but you also must pay the EA exam fees. The EA costs include the EA exam testing fee, the price of EA exam prep, the enrollment to practice fee, and designation maintenance fees. You can see the typical amounts for these fees and the total for all of them in this table.
|1. Testing Fee (per part)||$181.94|
|2. Review Course Materials (mid-range)||$500|
|3. Enrollment to Practice||$30|
|4. Designation Maintenance||$250|
In order to take the EA exam, you must acquire a Preparer Tax Identification Number (PTIN).
To get your PTIN, you must create an account on the IRS website. Then, you’ll need to fill out the application by submitting your personal information and individual tax return.
Your personal information will include your Social Security number, name, mailing address, date of birth, information about your business, information about other certifications you may have, and explanations of any felony convictions or problems you’ve had with your tax obligations if any.
Once you’ve completed the application, you can submit it and receive your PTIN immediately. Applying online takes about 15 minutes, but if you choose to fill out Form W-12 and mail in your PTIN application, the process will take about 6 weeks.
With your PTIN, you can visit the Prometric website and make a testing appointment for the EA exam. Then, you’ll have successfully registered for the EA exam.
And remember, the EA exam does not have a specific arrangement, so you can take each of the 3 parts separately and in any order.
The EA exam is available to take for 10 months out of the year. Specifically, the testing window runs from May 1 to February 28 of the following year. But during leap years, the testing window lasts through February 29. During March and April, the blackout months, the exam administrators maintain and update the exam according to the most recent tax laws.
Additionally, Prometric testing centers administer the fully computerized EA exam, and these centers are open almost every day of the week for many hours each day.
The range for EA exam scores is 40 to 130. And on that scale, the EA exam passing score is 105.
Furthermore, only the questions you answered correctly out of the 85 scored questions contribute to your EA exam score. So, the takes the number of questions you answered correctly and mathematically transforms that number into a standardized scaled score. However, the IRS doesn’t use a straightforward formula to achieve this conversion from raw to scaled score, so we can’t know exactly how they do it.
If you do score at least a 105 on part of the EA exam, the computer will immediately tell you that you have passed the exam. But it won’t tell you your actual score if you passed. Instead, you must simply be content with the knowledge that you were successful.
Another aspect of the EA designation to consider before you decide to pursue it is the difficulty level of the EA exam. Because this exam serves to vet tax professionals who would receive the IRS’s stamp of approval, it is fairly challenging. However, it is not necessarily as difficult as other accounting certification exams. The indications we have for how hard the EA exam is are the pass rates and the recommended amount of study time.
As mentioned, past EA exam pass rates have ranged from somewhere between 50-90%. And not surprisingly, these pass rates are some of the best among accounting certification exams. Therefore, the EA exam pass rates do not imply that the exam is much of a challenge for candidates, especially Part 3.
However, the pass rates also do not imply that the exam is easy. Specifically, the exam is difficult enough that you must commit a significant amount of study time to it.
Both EA review course providers and candidates who have passed the exam in the past can verify that achieving EA exam success requires you to study for dozens of hours for each part. In total, you will have to study for a few hundred hours in order to know everything the EA exam expects you to know. Therefore, because preparing for the exam involves a lot of work, the EA exam is certainly not a cakewalk.
As mentioned, if you pass part of the EA exam, the computer will tell you right away that you passed. And again, you won’t receive a score for passing. However, you will receive a score if you failed. And, that score will fall somewhere between 40 and 104.
Therefore, you can surmise that you knew almost all of the information on the exam if you earned a 103. But if you received a 70, you have more knowledge gaps to fill in. Along with your exam score, you will also receive a score report that will specifically tell you in which content areas you need to improve and to what extent.
If you do fail the EA exam, you can register to retake the failed part in just 24 hours. This quick turnaround time is uncommon among accounting certification exams. So, failing the EA exam doesn’t have to disrupt your study schedule very much.
What’s more, your credit for each passed exam part lasts for 2 years. So, even if you fail one part, you still have plenty of time to pass the part you failed and any remaining parts as well.
But, if you fail the same exam part a total of 4 times in the same testing window, then you must wait until the next testing window to take that exam part a fifth time. Consequently, failing one exam part multiple times does inhibit your exam progress.
The amount of time you’ll need to spend studying for the EA exam depends on how familiar you are with the exam content and how much time in a week you have to study. If you are already working in the tax preparation field, are a recent college graduate of an accounting or finance discipline, or are quick learner, then you may not need as much time as other candidates. Therefore, only you can determine exactly how many study hours you will need, but these general guidelines can give you an idea of what to expect.
|Exam Part||# of Study Hours||10 Hours/Week||15 Hours/Week|
|1||80-100||8-10 weeks||6-7 weeks|
|2||80-100||8-10 weeks||6-7 weeks|
|3||60-80 hours||6-8 weeks||4-6 weeks|
|Total||220-280 hours||22-28 weeks||16-20 weeks|
To ensure that you make the most of your study time, you should apply EA exam study tips. My best EA study tips include:
An EA review course is essential for exam success because it covers all of the exam content, allows you to develop your knowledge and skills, and offers you access to support throughout your entire exam journey.
The only other resource available to EA candidates is the IRS publications, which are reference materials, not study guides. Also, the questions in the IRS publications are very out of date, as the IRS stopped releasing old exam questions in 2005. Therefore, the most efficient and effective materials you can use to prepare for the EA exam are EA review courses.
To use your EA review course properly and ensure that you get through all of the material before your testing appointment, you must create an attainable study plan. Such a plan addresses your current tax knowledge, your daily, weekly, and monthly agendas, and your long-term goals.
And to make this study plan, you must consider how much time you will have to study within each of these periods and make more time where you need it by temporarily cutting back on other activities. Then, stick to your plan strictly so that you can pass each exam part the first time.
You only have so much time to study each day. And, if you spend that time checking your email, scrolling through social media, stressing over your to-do list, or wading through mounds of clutter in your study area, you’ll waste that precious study time. Therefore, you should reduce the presence of each of these distractions when you’re on the study clock.
To do so, put your phone beyond your reach (and on silent, if you can), delegate as many of your responsibilities as you can, and keep your study area clean. Taking these steps will help you focus on the task at hand, which is preparing for the EA exam.
If you purchase an EA review course, you’ll get access to practice questions that imitate those you’ll see on the EA exam. And to give yourself full confidence with the real exam questions, you need to answer as many practice questions as you can before your exam date. So, the bigger the test bank you have, the better.
You’ll also benefit from a test bank that includes answer explanations, as reading the answer explanations allows you to learn from your mistakes and improve your reasoning. When you allow the answer explanations to tell you why the right answer was right and the wrong answers were wrong, you’ll deepen your comprehension of the exam topics and be ready for any kind of EA exam question.
Managing your time on the EA exam is not too difficult because the exam contains only MCQs. However, because you have a limited amount of time to take the test, you still need to develop a time management strategy to ensure you answer every question before the exam ends.
The exam does not penalize you for wrong answers, so you’ll have the best chance at maximizing your score if you answer every question. And you’ll have 210 minutes to get through 100 MCQs, so you should give yourself 2.1 minutes to answer each question. Or, to give yourself an hour of time to review your answers after your first pass through them, you can limit yourself to 1.5 minutes per question.
As mentioned, the EA exam focuses on federal taxation. So, given that the tax code is essentially a list of rules, passing the EA exam requires you to do the following:
And unlike some other accounting certification exams, you don’t need extensive knowledge of business and accounting to pass the EA exam. So, the EA designation is a good alternative for people who do not meet the criteria for other accounting certifications like the CPA license.
However, to pass the EA exam, you do need to know everything about everything included in the EA exam syllabus. So, to give yourself the best chance at exam success, you must study for the exam with an EA review course.
Specifically, you should use the best enrolled agent course for you so you can study more effectively and pass more efficiently. And to find the best course for you, you need to research your options and consider how well each course addresses your learning style and fits your budget.
To know how well a course accommodates your learning style, you should assess the different study tools the course supplies. These study tools often video lectures, books, banks of practice test questions, flashcards, and more.
And to help you gauge the quality of these study materials, you should consider the history and reputation of the publishers of the course. If a course provider has helped an overwhelming majority of EA candidates pass their exams on the first try, then that provider can most likely help you pass as well.
As the EA exam fees prove, earning the enrolled agent designation will cost you money as well as time and effort. But passing the EA exam doesn’t have to cost you as much as it would so long as you use EA exam prep discounts. With such discounts, you can pay less for the perfect EA review course for you.
And you’ll find such EA review course discounts on my site. I’ve got discounts on the best enrolled agent courses on the market, including Gleim EA Review and Surgent EA Review. So, be sure to see what deals are available on my site before purchasing your EA review course.
Now that you know the basics of the enrolled agent certification process, you can compare the EA to other accounting certifications to determine which designation is right for you.
As it’s one of the most popular accounting certifications, starting your comparisons with the CPA is a good choice. As you’ll see, the CPA and the EA designations have some significant differences, but neither is better than the other. Instead, the issue of which you should earn is a matter of what you want to do with your life and how well each certification suits your needs.
A Certified Public Accountant is an expert in accounting. Therefore, tax matters may be just one of the tasks that a CPA handles. What’s more, the CPA is a license that the individual state boards of accountancy grant to people who demonstrate their accounting competence by meeting a series of very high standards.
So, because the CPAs command such accounting proficiency, the CPA license is the gold standard among accounting certifications. It is also one of the oldest American accounting certifications, though the EA is older. Therefore, having the letters “CPA” behind your name is a mark of accounting excellence.
CPAs, or Certified Public Accountants, are licensed individuals who can sign an audit report. In fact, an audit is the most comprehensive financial statement service that a CPA can provide to its clients. Additionally, CPAs can prepare financial statements, provide attestation and advisory services, and offer tax expertise. Usually, CPAs provide their services to businesses and may work for larger international tax and accounting firms.
In contrast, EAs are only tax specialists. They cannot provide the other accounting and advisory services that CPAs can. Also, most enrolled agents work for individual taxpayers and don’t often assist with a large business’s returns.
What’s more, international CPAs are quite common, and international CPA candidates can choose from many CPA Exam locations all over the world. On the other hand, most EAs reside in the U.S., and the designation does not have international appeal.
Like the EA, the CPA offers accountants a host of desireable benefits, including the increased earning potential, more career opportunities, lasting job security, and elevated industry respect.
CPAs are some of the highest-paid accountants, and they can serve a company in multiple capacities. They are also on the path to holding the title of Vice President, CFO, Tax Manager, Finance Director, Corporate Controller, Cost Accountant Manager, and that of many other significant roles within a company.
Currently, CPAs are in demand as the accounting industry hustles to keep up with the pace of the ever-changing modern world. And, because people and companies will always need help managing their finances, CPAs can also feel very secure in their career path.
Finally, CPAs are well-known across America and around the world. As mentioned, the CPA is the gold standard of accounting certifications, so it gives accountants a bit of an edge over the EA, which is not as popular.
While the enrolled agent designation requires candidates to meet a minimal number of requirements, the CPA certification asks much more of its candidates.
As mentioned, the state boards of accountancy award the CPA license to candidates, and each state board has its own distinct set of CPA requirements. However, in general, the state boards expect candidates to do the following:
Additionally, most state boards also impose an ethics requirement upon candidates, which involves passing an ethics exam. And candidates must also meet annual CPE requirements in order to maintain the CPA license.
Therefore, the process of becoming a CPA is pretty intense, and some candidates find the presence of such strict requirements to be reason enough to pursue a different accounting certification such as the EA. Again, the EA does not have education or experience requirements, so the barrier of entry into the EA designation is lower than that of the CPA.
While most state board stick to the 4 Es of the CPA requirements (examination, education, experience, and ethics), the details of these requirements for each state board differs. However, every single state board and jurisdiction that offers the CPA license (55 in total) mandate that their candidates must pass the Uniform CPA Examination.
The American Institute of Certified Public Accountants creates the CPA Exam, the National Associaton of State Boards of Accountancy helps facilitate the process of taking the CPA Exam, and Prometric testing centers administer the exam. Therefore, to earn the CPA, you must prepare to pass the CPA Exam. And your preparations must include discovering everything about the CPA Exam, such its structure.
Specifically, the CPA Exam consists of 4 sections.
Furthermore, the CPA Exam sections consist of a series of testlets presenting different types of questions. The CPA Exam question types are:
The number of questions each CPA Exam section presents varies. However, the total testing time for each exam section is the same: 4 hours.
Auditing and Attestation (AUD)
|Business Environment and Concepts (BEC)||Financial Accounting and Reporting (FAR)||Regulation (REG)|
Testlet 1: MCQs
|Testlet 2: MCQs|
|Testlet 3: TBSs|
|Testlet 4: TBSs|
Testlet 5: TBSs/WCs
|3 TBSs||3 WCs||3 TBSs|
So, as the EA exam only has 3 parts and only features MCQs, its structure is a bit less complicated. Consequently, some candidates find the EA exam easier to prepare for.
As you can see, the 4 CPA Exam sections address different accounting subject matter. Therefore, the questions in each CPA Exam section test candidates on their knowledge of various accounting topics. You can see exactly which content areas and topics each CPA Exam section covers by referring to the AICPA’s CPA Exam Blueprints.
Ethics, Professional Responsibilities, and General Principles (15-25%)
|Corporate Governance (17-27%)||Conceptual Framework, Standard-Setting, and Financial Reporting (25-35%)|
Ethics, Professional Responsibilities and Federal Tax Procedures (10-20%)
Assessing Risk and Developing a Planned Response (20-30%)
|Economic Concepts and Analysis (17-27%)||Select Financial Statement Accounts (30-40%)|
Business Law (10-20%)
Performing Further Procedures and Obtaining Evidence (30-40%)
|Financial Management (11-21%)||Select Transactions (20-30%)|
Federal Taxation of Property Transactions (12-22%)
Forming Conclusions and Reporting (15-25%)
|Information Technology (15-25%)||State and Local Governments (5-15%)|
Federal Taxation of Individuals (15-25%)
|Operations Management (15-25%)||N/A|
Federal Taxation of Entities (28-38%)
As you can see, the scope of the CPA Exam is much wider than that of the EA exam, so passing the CPA Exam requires more knowledge about accounting in general.
Historically, the average U.S. CPA Exam pass rate has been about 50%, with a range of 45-55%. However, in the last few years, the quarterly pass rates for some of the CPA Exam sections have been creeping up slowing and getting as high as 60%. For example, the pass rates for 2018 looked like this:
|Second Quarter||Third Quarter||Fourth Quarter|
As you can see, the BEC pass rate regularly reached 60%, and the REG and AUD pass rates fell into the 50s often enough. Therefore, the CPA Exam pass rates are currently on the upswing.
However, as we learned, the average EA exam pass rate is 71%. Therefore, as the EA exam pass rates are still higher than those of the CPA Exam, the EA exam seems to be easier than the CPA Exam. And, as a result, the EA designation may be slightly more attainable for some accountants than the CPA.
The CPA Exam fees are quite a bit costlier than those of the EA exam (3 times, in fact) because the CPA Exam simply has more fees. For example, EA candidates initially just have to pay a testing fee for each exam part and an enrollment to practice fee. Conversely, CPA candidates must pay a CPA Exam application fee, an examination fee for each part, an ethics exam fee, and a license fee.
What’s more, if candidates have to retake a CPA Exam section, they must repay the examination fee and usually pay a registration fee as well. And having to retake a CPA Exam section is fairly common for a few reasons.
Firstly, because the pass rates of some sections are still pretty low. Secondly, because candidates must pass all 4 sections within 18 months or else they will lose credit for their first passed section. And thirdly, because some CPA review course providers charge fees to extend access to their courses in the event that you don’t pass the CPA Exam before your course expiration date. So, the added expenses of retaking a CPA Exam section is just another reason why earning the CPA costs more than earning the EA.
But one final reason for the price discrepancy of these designations is the costs of review courses. Purchasing a review course is essential for passing both the EA exam and the CPA Exam, but CPA review courses generally cost more than EA courses. And, because the CPA Exam has more sections than the EA exam has parts, CPA candidates must pay for more study materials as well.
So, this table illustrates how, all told, the CPA license requires more funds than the EA credential.
$181.94 per part (3)
$208.40 per section (4)
|Registration Fee (for a retake)|
$75 (+ $208.40 exam fee)
|License Fee/Enrollment to Practice|
Review Course (mid-range)
As mentioned, the individual state boards of accountancy grant the CPA license. Therefore, in order to apply for the CPA certification and register for the CPA Exam, you must select and work with a state board. You have a total of 55 jurisdictions to choose from, and you need to ensure that you can meet the state board’s requirements before you choose to apply to a particular jurisdiction.
But once you know you can meet the requirements, you can fill out the state board’s application form and send it in. For about 20 state boards, you must refer to their website to find, print, fill out, and mail in the application. However, some state boards have their own online application systems in place. Either way, you must follow the instructions carefully in order to ensure success.
Conversely, over 30 state boards outsource their CPA Exam applications to the NASBA. So, if your state board works with NASBA, then your application process will involve signing into NASBA’s website and submitting your application through their CPA Examination Online Application System.
When you apply for the CPA Exam, you must include required documents like proof of identification and education. You will also have to pay some of the CPA Exam fees at that time, such as the application fee and the examination fees.
After you have submitted your application, your state board will review it and tell you whether or not they approve. If your state board does accept your application, you will receive a Notice to Schedule (NTS) so that you can make your testing appointment for one or more CPA Exam sections. Your NTS will have a specific expiration date, so you must contact Prometric to schedule your testing appointment and sit for the exam before your NTS expires.
As you can see, because you have to meet a state board’s specific requirements and receive an NTS, the CPA Exam application is a bit more involved than the EA application.
As you recall, the EA exam features nearly continuous testing throughout the year. The only exception is during tax season when Prometric updates the EA exam according to the latest tax code. Consequently, no EA testing dates are available during this time. However, you still have from May 1 to February 28 to take the exam, and you’ll receive your score immediately when you do. Therefore, taking the EA exam does not involve much waiting.
On the other hand, you can only take the CPA Exam during the CPA Exam testing windows, which leave you with much less testing time. The 4 annual CPA Exam testing windows are:
What’s more, you will not receive your CPA Exam score immediately after finishing an exam section. Instead, you must wait for the appropriate CPA Exam score release dates in order to learn if you passed or failed your exam.
And finally, credit for each CPA Exam section you pass only lasts for 18 months. So, you must pass all 4 sections within 18 months in order to complete the CPA Exam.
Consequently, the process of passing the CPA Exam requires a bit more planning and adjusting than that of passing the EA exam.
To grade the CPA Exam, the AICPA generates a scaled score from the correct and incorrect answers of both the TBSs and the MCQs. For BEC, the AICPA also accounts for the WC answers during this process.
Then, the AICPA combines the TBS and MCQ scaled scores to produce an aggregate score with the policy weights applied. These policy weights include the type of MCQ testlets you received. The first MCQ testlet is always a mediumly difficult testlet. After that, the exam serves you either another testlet of medium difficulty or a more difficult testlet according to your performance with the first testlet.
Furthermore, the exam awards points based on difficulty level. So, you get more credit for answering a difficult question correctly than an easier question. Consequently, the exam doesn’t penalize or favor you based on the combination of testlets you received. Also, unlike the MCQ testlets, the difficulty of the TBS testlets is pre-determined.
Finally, the AICPA finishes the process with a score reported on a scale from 0-99. And on this scale, the passing CPA Exam score is 75. What’s more, CPA candidates will see their score no matter whether they passed or failed. So, in this way, the CPA Exam score differs from the EA exam score.
However, both the CPA Exam and the EA exam include pretest questions that don’t count toward your score.
The CPA Exam pass rates demonstrate that usually, less than half of all CPA candidates pass their exam section in a given testing window. Therefore, the CPA Exam has a reputation for being pretty challenging. Consequently, several factors contribute to the CPA Exam difficulty.
First of all, the scope of the CPA Exam affects the exam’s difficulty. As the CPA Exam syllabus reveals, the different exam sections cover a broad range of content areas and topics. Secondly, the format prevents the exam from being easy as well. The exam has 4 separate sections and 3 types of questions. The content of the exam sections overlaps a little but not much. And the TBSs and WCs require more than memorization from candidates, making them particularly tricky.
Thirdly, the levels of skill the CPA Exam requires of its candidates add significantly to the exam’s laboriousness. Specifically, the exam content encompasses 4 distinct skill levels (remembering and understanding, application, analysis, and evaluation), and the exam sections test candidates at these skill levels to varying degrees.
Finally, the timing of the CPA Exam is tedious. Total testing time for each section is 4 hours. However, you also must pass all 4 sections within 18 months. And if you don’t, you’ll lose credit for the section you passed first. Once again, those pass rates are low, so many candidates fail a section, so the limited timeline just makes the CPA Exam that much harder.
In contrast, the EA exam covers less content, has fewer question types, does not involve such deep skill levels, and gives you more time to retain your exam credit and pass the exam.
As we’ve seen, the CPA Exam is fairly difficult. And you must get a 75 out of 99 on each section to pass it. So, what happens if you fail?
First, along with your CPA Exam score, you’ll receive a Candidate Performance Report. This report will show you how your exam performance differed from the performance of candidates who passed by content area and question type.
Then, you’ll need to retake the failed exam section. But you can’t take the same exam section more than once in a testing window, so you must wait until the next testing window to sit for a failed section again. You also have to wait 24 hours after receiving your failed score to reapply.
However, once these time restrictions are up, you can apply to receive a new NTS for the exam section you failed. And to submit another NTS application, you must pay a registration fee and a re-examination fee. Then, after you get your new NTS, you need to study again.
Though the CPA Exam sections don’t contain as many questions as the EA exam parts, the CPA Exam sections cover such a vast range of accounting topics that you need to prepare for them extensively. In fact, the AICPA recommends allotting at least 100 hours of study time to each section. However, candidates and review providers often find that certain exam sections require more or less study time. Therefore, the numbers of CPA Exam study hours per section often quoted in the industry include:
These numbers are good estimates, but total study times for each CPA candidate are unique. Consequently, your familiarity with the exam content and ability to grasp new concepts quickly will dictate exactly how many study hours you’ll need to pass each exam section.
What’s more, the amount of time you’ll need to clock the sufficient number of study hours will depend on how much time you have to study each day, week, and month. If you can study for 20 hours a week, you can get through your several hundred study hours faster.
However, you may encounter periods of time during which you can only study for 10 or 15 hours a week. These weekly totals can work to prepare you as well.
But don’t spread your studies out too far, or you won’t remember what you’ve learned. On the other hand, you shouldn’t cram your studies in too close either, or you’ll burn out quickly.
Because both the EA exam and the CPA Exam are barriers of entry into professional accounting certifications that hold individuals to high standards, your study strategies for either should be similar.
Just as you would for the EA exam, you need to use a CPA review course to pass the CPA Exam. Again, a review course teaches you all of the exam content, gives you exposure to the exam questions, and supplies you with customer support for your entire journey. Trying to wade through the CPA Exam Blueprints on your own wastes a lot of time and effort. What’s more, the AICPA Sample Tests on their own don’t provide enough interaction with the CPA Exam. Consequently, the only way to give yourself the best chance at exam success is to prepare with a review course.
Once again, you need to accumulate a fairly high number of study hours in order to be totally ready for each exam section. And you can only get all those study hours in before you sit for the exam if you produce and follow a study schedule. Some CPA review courses include interactive study planners that allow you to enter your exam date and dates you can’t study so they can use that information to generate a review agenda that gets you through the entire course by exam day. However, if your course doesn’t offer such a convenient feature, you can create your own by assessing how much time you can commit to studying each week. If you need more time, cut out certain activities temporarily, because earning the CPA as soon as possible is worth the sacrifice.
You don’t need to limit your study hours to times when you can sit in front of your computer. Instead, you can get some additional review in here and there by using flexible study materials. For example, almost all CPA review courses come with printed books, so you should read through these when you’re sitting in a waiting room. Your course may also include audio lectures that you can listen to while driving or working out. Finally, you can usually get your hands on digital or printed flashcards that you can flip through when you’re riding the bus or the train. Of course, you can also make your own flashcards to guarantee that you aren’t without this handy review tool.
To ensure that you can deliver your best possible testing performance, you need to build up your confidence and minimize surprises on exam day. And the best way to do so is to take practice exams. Practice exams recreate the exam environment and experience as realistically as possible so that you know what to expect of the CPA Exam. So, practice exams usually emulate the format and functionality of the exam down to the smallest detail. Practice exams also help you see what the CPA Exam expects of you by including the same number of questions and total testing time. For these reasons, you should take several practice exams before you take the real CPA Exam. And you should employ a time management strategy when you do so you’re sure to answer all of the questions.
Sometimes, the CPA Exam presents questions comprised of confusing language or weird wording. In these cases, you might be unsure of what the answer may be. But just because you’re not feeling confident doesn’t mean you should throw in the towel. Instead, you should take the steps necessary for making an educated guess. If you’ve studied sufficiently, then you should be able to rule out the obvious wrong answers. Then, you can imagine the real-life applications of each remaining answer option to see which makes the most sense. In the event that at least 2 answer options remain appealing, then you can simply go with your instinct to select the one that seems best.
Having an accounting degree and/or accounting experience can get you familiar with some of the CPA Exam content. However, in order to know exactly what the CPA Exam wants you to know for each section, you need to invest in a CPA review course.
A CPA review course has everything you need to comprehend all of the exam content effectively and efficiently. Therefore, you must find the best course for you by researching your options and evaluating how well each option meets your learning and monetary specifications.
You’ll find that most CPA Exam prep on the market comes with a variety of study tools to accommodate different types of learners. Such study tools include digital and printed books, adaptive online platforms, video lectures, flashcards, practice questions, and more.
Other aspects of potential course contenders to consider are the guarantees offered, candidate reviews, the value based on the price, and discounts available.
You should give your CPA review course decision a lot of time and effort. Then, when you’ve found the perfect course for you, you should use it consistently to make the most of your money and your opportunity to take the CPA Exam.
Within a few years (or less) of earning the CPA, the license will pay for itself. However, that doesn’t mean you have to spend more than necessary on the certification process. So, to save money on your path to CPA Exam success, you should take these 2 steps:
As you recall, you can find EA review course discounts on my site and use them to save big on your preferred EA exam prep. And you can have the same experience with your CPA Exam prep. You’ll find CPA review course discounts on my CPA Exam site, and with these discounts, you can get a great deal. So, don’t purchase your CPA course without consulting my site for the latest and best discounts available.
As we saw in our assessment of the CPA Exam fees, retaking an exam section can be costly. Consequently, the price of the CPA certification will continue to go up with each section retake you have to fund. Therefore, you should make every effort to pass each section the first time you sit for it. Only having to take each section once really is one of the best ways to keep your CPA costs down. And again, the best way to ensure you pass the first time is to utilize a CPA review course.
As you recall, the enrolled agent credential designates an individual with specific skills in taxation. On the other hand, the CPA license signifies someone with general accounting expertise. So, the CPA is very useful. However, depending on your career goals, you may need more specialized certification options. Thankfully, the CMA certification is one such option.
A Certified Management Accountant (CMA) is an individual who specializes in management accounting. Therefore, the Institute of Management Accountants (IMA) awards the CMA to accountants who distinguish themselves as experts in management accounting areas such as financial planning, analysis, control, and decision support.
Additionally, a CMA’s skills are particularly critical to the finance departments of companies around the world. So, the CMA has a global reputation as the most respectable management accounting certification.
For these reasons, if you’d like to demonstrate that your accounting skills are deep and diverse, you may want to pursue the CMA certification.
The skills perfected via the CMA certification process equip people for industry accounting positions. Specifically, CMAs often work in big, global corporations that focus on manufacturing.
What’s more, accountants who hold the CMA certification are ideal for internal management and executive-level roles. For example, CMAs can work their way into positions such as financial analyst, accounting manager, controller, Chief Financial Officer, and more. Because the CMA focuses so much on management, CMAs are perfectly capable of making business decisions, conducting analysis, and performing financial planning.
Additionally, the CMA differs from the EA and CPA in that it doesn’t require you to know how to complete audit procedures, write reports, or file taxes. Therefore, the CMA is more useful in industry accounting than public accounting.
The CMA is a great certification if you are interested in leading or becoming an accountant within a Fortune 500 company. And, while the CPA is the gold standard in all of accounting, the CMA is the most widely recognized designation in management accounting. Additionally, the CMA certification is a global designation. So, you’ll be able to contribute to organizations all over the globe if you are a CMA. When looking at the CPA vs. CMA, you’ll find that the CPA is a less global designation and because of this, it may limit your career opportunities.
Another perk of the CMA exam is that it only contains 2 parts (half of the CPA Exam). Because there are less parts, it’s highly likely that it will take you far less time to become a CMA than it will to become a CPA.
Lastly, CMAs are paid very well. On average, CMA salaries show that accountants with this certification earn 67% more than their non-certified peers.
The U.S. CMA exam has 2 parts. The exam covers cost accounting, decision analysis, corporate finance, and financial management at a deeper level than the CPA Exam. Having said that, the coverage of the CMA exam syllabus is otherwise much narrower given its management accounting niche. Therefore, studying for the CMA exam takes less time than studying for the CPA Exam.
The IMA (Institute of Management Accountants) suggests candidates study for at least 150 hours for each exam part. Consequently, the your total CMA exam study time comes to around 300 hours.
The CMA exam pass rate is significantly lower than that of the EA exam. The pass rate for Part 1 of the CMA exam is 35%, and the pass rate for Part 2 is 50%. Again, the EA exam’s pass rates fall between 61-86%, so the CMA exam seems to be more challenging than the EA exam.
In order to take the CMA, you must pay 3 CMA exam fees. All amounts are in U.S. dollars. These include:
Here is a breakdown of what that might look like at the different levels:
|1. IMA Membership ||$39||$135|
|2. CMA Entrance||$188||$188||$250|
|3. Exam Registration|
So, just how difficult is the CMA to pass? According to the latest percentages, the average CMA exam pass rate is 45%. The Institute of Certified Management Accountants (ICMA) seems to have slowed down their release of the CMA exam pass rates in recent years.
We can look at statistics from past years to help us get an idea, but it’s hard to be certain exactly where the pass rates are currently.
|Exam Part||2013||2014||2015||2015-2016*||2016-2017||2017-2018 (?)|
*In 2016, the ICMA adjusted when it releases the CMA exam pass rate data.
The CMA exam is fully computerized and is available at hundreds of CMA exam locations around the world. Candidates can take the exam during the available CMA exam dates each year. However, the CMA exam is only available for testing during three short windows each year:
The CMA exam format includes 100 multiple choice questions per part, representing 75% of the exam score. Additionally, the second section of each exam consists of essays and represents the remaining 25% of your score. You will be given 30 minutes for each of the two essays. Finally, the total testing duration is 4 hours. Here’s what that will look like:
|# of Hours Per Question Type||# of Each Question Type||Avg Time per Question|
|Multiple Choice||3 hours||100||1.8 minutes|
|Essay||1 hour||2||30 minutes|
Before you can register to take the CMA, you first have to meet the CMA requirements. You also have to meet them in the correct order. Once you have done that, you can register to sit for the exam.
To earn the CMA certification, you must fulfill these 7 CMA requirements in this order:
The CMA exam grading of the multiple-choice questions is completed by a computer. And, before you can proceed to the CMA essay section of the exam, you must score a 50% or higher on the multiple-choice questions. If you do not achieve a score of 50% or greater, your exam will end and you will not be able to attempt the essays.
In contrast to the EA exam, you’ll have to wait for your CMA exam score, as it’s not provided once you complete your exam. Generally, it takes 42 days from the date on which you took the exam to receive your score.
There are two major types of CMA exam discounts.
Now to see how EA vs. accounting certifications and other distinctions, let’s look at how it compares to the CIA. Certified Internal Auditor designation is a good choice for people looking to move into a particular job path.
A Certified Internal Auditor (CIA) is an accountant who conducts internal audits. This specific type of auditing professional has received the CIA certification from the Institute of Internal Auditors (IIA). Whereas EA focuses on the tax side of things, CIA focuses on auditing of varying types.
The biggest difference in job types between the EA and the CIA is that the EA focuses only on taxes. CIA certificate holders could have jobs in the following:
And as soon as you’ve demonstrated your competence in one of these roles, you’ll be up for promotions to higher lead internal auditor and internal audit supervisor positions like:
As you may know, a career as an internal auditor is financially stable. It’s also very lucrative! A big benefit to getting your CIA certification is that it can pay good money. Furthermore, the healthy CIA certification salary is just one of the many benefits of becoming a CIA.
Other benefits include:
If this sounds good, the next step is to know how to sign up for the exam and what you need to pay.
There are exam fees for the CIA. You can save some money on these if you also sign up for a membership with the IIA. Here is a look at the application and exam fees.
|Membership Type||Application Fee|
|CIA Exam Fee per Part||Member||Non-Member||Student/Professor|
Additional costs can come in when you consider review courses, travel, and accommodations for taking the exam at one of over 800 testing centers around the world. Furthermore, there are added fees if you need to request an extension or retake any of the parts of the exam.
Chartered Financial Analyst (CFA) Designation is another accounting designation to consider when comparing to the EA. The chartered financial analyst designation is granted by the CFA Institute to candidates who meet the educational qualifications, work experience requirements and pass the CFA exam. Unlike the CPA, the CFA is much more narrowly focused on finance and investment analysis.
Based on this, we can also conclude that it is different from the Enrolled Agent exam and designation, which focuses specifically on taxes.
What kinds of jobs might you be eligible for with a CFA? That’s a great question because the CA differs from the EA in that it allows for a wider range of potential jobs and roles.
The CFA Institute provides the following breakdown of the most common professions:
One additional benefit, apart from the diversity in the job description, is the ability to move to where growth is needed within a company, or even within an industry. When you hold a CFA, you have flexibility in terms of your value.
The commitment to pursue the CFA cannot be understated. According to the CFA Institute, the following is the amount of time needed to obtain the CFA designation:
CFA exam fees include: one-time program enrollment fee (before the first CFA level 1 exam; USD 450), exam registration fee (all levels; the cost depends on when you register, cost of the print version of the curriculum (only if you opt-in; USD 150 plus any fees associated with shipping)
Other costs associated with the CFA exam could include:
Now let’s look at how the EA designation compares to a Tax Attorney who takes the LSAT/BAR.
When exploring EA vs. accounting certifications, we also wanted to explore tax attorneys. This is because they are very close to the job description that an Enrolled Agent for the IRS will hold.
Tax attorneys have a similar role as the other accounting certifications and designations here. However, there are a few things that set a tax attorney apart, and they can do things that an EA can’t do. First and foremost, they can represent clients in Tax Court. The IRS does not allow EAs to represent people in Tax Court.
As a tax attorney, you could work in private practice, or for a law firm or agency. You could also be hired by a company or business to be their sole tax attorney to handle all of their tax issues.
For all out-of-court issues, an EA can do the same thing as a tax attorney. However, an EA is tied when it comes to going to tax court. Only a tax attorney can do this. While some tax attorneys will earn their living doing much of the same tasks as an EA, they will always have this one advantage. Some people take the LSAT and BAR to become Tax Attorneys with the goal of doing as much court casework as possible.
If proving cases in courts gets you excited, this may be the path for you to follow. Otherwise, just the EA designation could be enough for you. Of course, these are very simplified definitions and both of these career paths require a lot of time, money and dedication to achieve. I highly recommend you do your own independent research in addition to this to help you make your decision.
Now that you’ve had a good overview of EA vs. accounting certifications and other designations, you should feel more confident in making a choice about which is right for you. In conclusion, only you can make the decision for your own career path. At the end of the day, you are the one who has to do the work. However, I hope that this post has given you enough information and recourses for further reading that you feel ready to make your choice.
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