If you are planning a career in taxes, you may be wondering about the EA vs. accounting certifications and other designations. An EA is an enrolled agent and is a tax practitioner designated by the Internal Revenue Service (IRS). The enrolled agent designation is actually the highest credential offered by the IRS. There are other accounting certifications, like the CPA, which are licensed by individual state boards of accountancy.
If you’re trying to make a decision about the best accounting certifications and designations, it can be very overwhelming. There are so many different options out there and some of them may appear to be very similar to one another. Therefore, use this article as a guide to help you understand the difference between the EA vs. other accounting certifications.
Before we dive into the ea vs. accounting certification comparisons, let’s take a look at the EA basics to help you with a frame of reference. An enrolled agent’s role is to represent taxpayers before all administrative levels, to include examination, collection, and appeals.
In short, an EA helps people with their business or personal tax returns. As an EA, you may represent individuals before the IRS with all matters except those in Tax Court (where an attorney would be required). What kind of tasks or job responsibilities do you have an as enrolled agent?
Most enrolled agents operate tax preparation practices and compete directly with CPAs, bookkeepers, tax attorneys, and other accountants. While any of those individuals may be knowledgeable enough to prepare tax returns, enrolled agents can also work across state borders. CPAs and attorneys have to meet the requirements of the state they practice in, so they do not have the option of working across state lines. Therefore, this is one distinct advantage of becoming an enrolled agent.
In addition to being able to work across the US without worrying about state borders, EAs also earn competitive pay with enrolled agent salaries. According to Payscale.com, enrolled agents typically make between $30K-$75K a year.
There are two ways meet the enrolled agent requirements:
The EA Exam has three parts:
However, it’s important to know that you can take these three EA parts separately and pay for them separately as well. Each of the three parts of the EA Exam also has specific content areas and generally, the content of each exam part does not overlap.
The EA exam focuses on the niche of federal taxation. It delves very deeply into this subject matter by touching upon individual and business taxation along with matters of representation.
Given that the tax code is essentially a list of rules, you can pass the EA exam by doing the following:
Unlike with the CPA Exam, you don’t need an extensive knowledge of business and accounting to pass the EA exam. So, the EA exam is a plus for many people who do not meet the criterion to become a CPA.
As the average enrolled agent exam pass rate is ranges from 61-86%, many people find the EA exam to be easier than the CPA or CMA exam. EA candidates typically find Part 3 to be the least challenging as there is less quantitative information being tested.
The overall U.S. CPA Exam pass rate is around 50%. In contrast, the CMA exam pass rate is lower, at 35% for Part 1 and 50% for Part 2. This means, in comparison, the EA exam is easier to pass than the CPA or CMA exam.
Reviewing with the best enrolled agent course enables you to study more effectively and pass more efficiently. The same is true for any exam of this caliber. When finding the best course for you, there are different things to consider. For example, you want to look into how well the course fits into your learning style.
You also want to see how many learning tools come with the course and what kind they are (e.g., video lectures, test banks, etc). Also, it’s very important to consider the history and reputation of the course you are considering. If a course has helped an overwhelming majority of EA candidates pass their exams on the first try, chances are likely that they can help you to pass as well.
The number of months you’ll need to dedicate yourself to studying for the EA exam depends on how many study hours you will need. 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, you may not need as much time as other candidates. Therefore, it’s difficult to pinpoint how long it will take each person to study for the EA exam, although there are general guidelines for you to follow.
|Exam Part||# of Study Hours||10 Hours/Week||15 Hours/Week|
|Part 1||80-100||8-10 weeks||6-7 weeks|
|Part 2||80-100||8-10 weeks||6-7 weeks|
|Part 3||60-80 hours||6-8 weeks||4-6 weeks|
|Total||220-280 hours||22-28 weeks||16-20 weeks|
Understanding what is on the EA exam is very important to passing. If you don’t know the material, you can’t study properly for it. The IRS exam syllabus reveals which topics the EA exam addresses. Additionally, the IRS EA exam syllabus also specifies how many questions the exam assigns to each topic.
|Part 1 EA Exam: Individuals||EA Part 2 Exam: Businesses||EA Exam Part 3: 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|
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. You can learn more about the EA exam syllabus in this full write-up.
Use these EA exam study tips to ensure you are fully prepared to pass the EA exam on the first try.
Now, let’s explore EA vs. accounting certifications and designations to help you decide which is right for your chosen career path.
A Certified Public Accountant is an expert in accounting. Tax matters may be just one of the tasks that a CPA handles. In short, the CPA certification is the gold standard for the accounting world and CPAs enjoy some unique capabilities. For example, CPAs are the only accountants licensed by the state governments and allowed to write audit reports on publicly traded companies.
First, both are good options. The EA and the CPA each have their pros and cons as well as distinct effects on your long-term career. In fact, this is the most important thing to look at when deciding which to go with: your future career path.
It isn’t so much about one being better than the other. Rather, it’s about choosing the one that suits your needs. The CPA has a long history in the accounting profession and a more respected designation. CPAs are also more well known by the public-at-large. On the other hand, EAs are becoming more well known, but the title isn’t as widely understood by many tax service consumers.
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. So, when you compare the job types of the type, it’s important to note that while CPAs might provide other accounting and advisory services, EAs only provide tax services. Also, most enrolled agents work for individual taxpayers. It’s relatively uncommon for an EA to assist with a large business entity’s returns.
In addition to the types of clients each designation services, international CPAs are quite common. Moreover, there are many CPA Exam locations all over the world to choose from. On the other hand, most EAs are located in the U.S. and the designation does not have international appeal.
The biggest benefit to becoming a CPA is that you could earn a higher salary. Moreover, you will have a more varied choice of jobs and career opportunities.
However, the CPA takes longer to achieve than the EA. Additionally, the EA exam is less difficult and the designation can be obtained faster.
The decision for one designation over the other is really all about evaluating your needs, wants, and future career path.
The requirements to becoming a CPA or an EA are quite different. But with both designations, you’ll have to qualify to take the exam, study and prepare for it, and take and pass it.
As part of the CPA Exam requirements, a CPA will have to earn 150 credit hours (the equivalent to a U.S. master’s degree) from an accredited college or university. In contrast, an EA does not have to earn any college credits at all.
Another distinction between the two is that CPAs will have to earn two years of experience (depending on the state), working on under a CPA or equivalent. An EA doesn’t need to earn any specific experience to hold themselves out as an EA. Instead, EA candidates just need to take and pass the SEE and apply to become an EA through the IRS.
The CPA Exam fees total nearly 3x as much as the ones for the EA exam. CPA candidates also have a unique CPA Exam application fee, whereas an EA does not have this cost. Therefore, given all of the costs that a CPA must incur, it’s much costlier to become an EA than a CPA.
Also, because around 50% of all CPA candidates fail the CPA Exam on their first attempt, the Exam actually costs them far more. Re-take fees, CPA review course extensions, and forgone or delayed job opportunities may cost CPA candidates who fail a great deal of time, money, and frustration.
Luckily, the pass rate for EA candidates is much higher. Therefore, even EAs who fail will likely never incur the same designation costs as CPAs.
|EA Exam||CPA Exam|
|Testing Fee (per part)||$181.94||Examination Fee (per part)||$208.40|
|EA Review Course||$500||Application Fee||$100|
|Enrollment for Practice:||$30||CPA Review Course||$1,700|
There are two major types of EA exam discounts and CPA Exam discounts.
The EA exam offers nearly continuous testing throughout the year. The only exception is during tax season when the EA exam is updated to test the latest tax code; so, there are no EA testing dates during this time. Therefore, you can take the EA exam from May 1 – February 28 of the following year. After you sit for each part of the EA exam, you’ll immediately receive your score.
However, the CPA Exam testing windows are much less generous. There are only four windows in which a candidate can sit for the CPA Exam:
A Certified Management Accountant, or CMA, is a certification for those that specialize in management accounting.
Accountants who hold the CMA certification are perfect for internal management and executive-level roles. This is not a great certification for those who are working in public accounting because the skills of a CMA are best suited for industry accounting. Moreover, with the CMA you won’t learn how to complete audit procedures, write reports, or to do any type of tax work. Therefore, the CMA is very different from the EA, which is all about taxation.
There are different job types that a CMA can hold. For example, a CMA could make a great COO or CFO within a company. Additionally, CMAs are suited toward making decisions, conducting analysis, and performing financial planning. The CMA is strictly focused on management, which is the major way it differs from the EA.
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.
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.
And now, let’s look at EA vs. CFA.
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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