I’m doing a BA in Accounting and I’m not sure which combination is better: CPA + MAcc or CPA + MBA. Most have told me the ladder is the better option. I’d get 4-5 years of work experience before getting the MBA though.
So what can one do with a CPA + MBA? Salary prospects?
I would personally trend towards the CPA plus MBA. From what I know, the MAcc isn’t all that great - most opp for the CPA over it as that’s where most of the knowledge is. I would think this would really depend on if you were looking for a CFO or a CEO spot down the line.
…and it’s the latter, not the ladder. You climb ladders.
CPA-MBAs can have very good career prospects. What you are missing is how are you going to become a CPA if you don’t go for a MAcc? You can’t wait 5 years after graduating from your undergrad accounting program to first sit for the CPA. You would be setting yourself up for potential failure. The CPA exam is a book test, not an experience test. FYI - am a CPA father whose son is graduating with an MSA/MAcc in a couple weeks and has already passed half of the sections.
To get your license all states now require 150 hours of credit with specific requirements concerning the number of accounting hours and business-related hours. Many states also have other specific and unique requirements concerning ethics, business law, accounting research, business writing/communication etc. in order to qualify. Many states will not even let you sit for the exam until you have 150 hours with transcript in hand - though some will let you sit with 120 hours or during your last semester when you will earn 150.
A MAcc is not absolutely required, but depending upon your state’s requirements, a double major or a few extra classes might not qualify you to sit. Some states will not accept community college classes for accounting/business sub-requirements in the 30 hours since they require advanced level classes - it all depends upon your state. If you spend the time with your counselor or work with your state board of accountancy, you should be able to learn the requirements and come up with a plan to qualify. In those states that have strict requirements, a MAcc is more common. If your state requirements are looser, most students just grab extra classes.
Whatever you do, do not go immediately into a third-tier MBA program right out of school! Any MBA worth the paper its printed on requires a minimum of 2 - 5 years of work experience. If you need the hours to qualify for the CPA, go for the MAcc or work with your advisor to take acceptable classes as noted above. If you are going to get an MBA, get as “good” of one as you can qualify for and afford - and that means waiting.
@ChicagoBear Thank you for the information. I was planning to complete the 150 credit rule through the MBA, which I would only do if I were accepted into a top 20 school; I just don’t see the ROI for a tier 2 or lower MBA program. As for the CPA, I’m currently studying for it and plan to sit for it after I complete my bachelor’s (I only need 120 credits to sit for the exam).
What are the differences between the career prospects of the MAcc vs MBA?
The vast majority of students that earn a MAcc wind up in public accounting - often at the Big 4, while others get jobs at other accounting firms, large corporations and banks in their management training programs, internal audit or corporate accounting departments. It really depends upon the school. If you go the MAcc route, you need to do your research and find out which firms recruit on campus and what the placement rate for the program is. The more respected the program, the better the results as far as placement.
Just as examples, my son’s undergraduate school (Miami Ohio) - ranked #17 undergraduate and #27 graduate in the 2014 Public Accounting Report (PAR) annual rankings - indicates that it is a target school for all Big 4 firms, other national accounting firms, numerous large corporations, consulting firms and banks and has a greater than 95% placement rate for its MAcc graduates. The same is true for my son’s MSA program (Notre Dame) -ranked #4 undergraduate and #4 graduate in the 2014 PAR rankings - that boasts a 100% placement rate within 3 months of graduation with 87% of last years graduates joining a Big 4 firm. I’m sure other highly respected programs such as Texas, Illinois, USC and Michigan also have fantastic results.
After interning with a Big 4 firm and receiving an offer, my son decided he didn’t think public accounting was for him, but with the ND name and recruiting, he was able to interview and receive an a couple offers in investment banking. I would not call the MAcc/MSA as the normal way into IB, but if you do go to a top name school, there can be other possibilities.
As far as the MBA, it looks like you have it right - given the cost of Tier 2 and 3 MBAs, the payback may not be there unless you go to a top 25 +/- school. Any quality school wants students with significant work experience so that they can contribute to the class and share real world scenarios. But the reward is if you graduate from a top program, six figure starting salaries are common and you are not constrained to stay in your current discipline.
Unfortunately, some people think an MBA from “South Succotash State” is going to guarantee them six figures upon graduation. That is highly unlikely. That’s not to say that someone with an MBA from a Tier 2 or 3 school can’t wind up in the C-suite - check the annual reports and proxy statements, there are plenty. However, these people most likely worked their way up the ladder within their company (or a competitor) and the MBA helped secure a promotion or new position along the way - building upon their accumulated industry experience.
Concerning the 150 hours, just be aware that the big accounting firms will not extend you an offer unless you have earned the 150 hours or are in school to earn them. You also can not start full time for a firm until you have those hours. They are not going to start investing their time and trouble to train you unless you are qualified to be licensed. So keep that in mind if you are going to postpone your MBA and still want to be a CPA.
The advantage of the MAcc to get to 150 is 1.) it only takes one year and work experience is not required 2.) it ensures you qualify you to sit and get licensed 3.) if you did not get an offer directly only of undergrad, it gets you “another bite at the apple” for on campus recruiting 4.) if it is a good program, you should have fantastic placement opportunities 5.) you can check the “masters degree” box.
The last one can be important because “life happens”! You can fully intend to go back for that MBA, but 1.) you are on the fast track or busy at work and you don’t have time 2.) your pay is already on the high end for your age and work experience, so why bother 3.) your significant other might be in school or need to relocate for a great opportunity 4.) kids, or other family responsibilities (sick parents or spouse) come along, etc… Not having that graduate degree can come back to haunt you as a mid-career manager if you are competing for those more limited senior level promotions with someone who has one.
Good luck!