Wage Surveys, Specialty Certifications, and the MBA Degree (#164)
/In this podcast episode, we discuss several topics relating to accounting certifications and the MBA degree. Key points made are noted below.
This episode is a continuation of the discussion in Episode 162, which was about the CPA and CMA certifications. As you might recall, I pointed out that I’d probably receive hate mail from people who hold the CMA certification, because I didn’t think that certification was all that useful. That’s not quite what happened. I got an e-mail from someone who really hated the CMA. And he raised some additional points, which seemed worth addressing in a separate episode. So here we go.
Wage Surveys
First point. The Institute of Management Accountants is the group that sponsors the CMA certification. They issue a salary survey every year that shows how much more money a holder of the CMA certification makes over someone who doesn’t have the certification. That one survey alone probably gets people thinking about taking the test for the certification. But before you buy the study guide, consider that a person who gets any certification is pushing harder for job advancement than someone who doesn’t. So in way, getting any certification at all is a self-fulfilling prophecy, because this type of person is bound to earn more money over the long term. So you might want to discount any salary survey that shows how you’ll make more money if only you earn such and such a certification.
Specialized Certifications
Second point. What about specialized certifications? For example, there’s the CIA certification, which stands for certified internal auditor. And there’s the CISA, which is for Certified Information Systems Auditor. And there’s the EA, which is for Enrolled Agent, which relates to taxation. And, for that matter, you also have the Certified Financial Planner, and Certified Fraud Examiner, and Certified Financial Manager. And so on. Are any of these worthwhile?
It depends upon how you approach how you’re going to use them. I do not recommend a shotgun approach, where you go into a frenzy of test taking and sit for every possible exam. Instead, the better approach is to figure out exactly what you want to do with yourself, and then specifically target the certification that makes the most sense.
I can bring some personal experience to this one. Back in Episode 162, I mentioned that I had both the CPA and CMA certifications. That’s not the whole story.
I only mentioned those two, because they were most relevant to the point I was making. Actually, early in my career, I picked up seven certifications – and it was in shotgun style. I just sat for every possible exam. The intent was to be qualified for everything, so my resume would look better. It didn’t really work out that way. No one ever commented on all of the other certifications, so I eventually let them all expire.
And here’s a story to consider. One of those other certifications was the Certified Internal Auditor. It’s usually considered the third most important accounting certification, after the CPA and CMA. So one day I received a call from someone else living in Colorado who had all three certifications. She was calling to let me know that there were now three of us in the entire state who had the big three certifications. The main thing to take away from that call was that only three people in the entire state thought it was important enough to load up on certifications. No one else bothered.
So my advice with specialty certifications is to make very sure about what you want, and target your efforts on just one or maybe two of these certifications.
And speaking of the CIA certification, I was flying back and forth to another city while studying for the test, and carrying this big training manual with me that said CIA on the cover. You wouldn’t believe how many people asked if I was training to join the Central Intelligence Agency.
Getting an MBA
OK, third point. What about getting an MBA? That’s the Masters in Business Administration. A lot of job postings require either an MBA or a CPA. That’s pretty stupid, since the MBA curriculum doesn’t remotely cover the same information that the CPA covers. The MBA covers all kinds of non-accounting issues, like business law, and management theory, and marketing. So someone who issues a job posting like that isn’t thinking through what they’re asking for.
Still, if you’re looking for a more advanced job, like controller or CFO, it’s fairly likely that you’ll see an MBA requirement on the job posting. What do you do? It takes a couple of years to pick up an MBA degree, and it’s pretty expensive. I’ll answer this one from personal experience. Yes, I have an MBA. I’m fairly sure it led to my getting my first controller job, so it definitely was worthwhile for me. And that controller position led to a couple of CFO jobs in a row, so I’d have to say it was very worthwhile.
But that doesn’t mean the MBA is right for everyone. For example, if you’re in the public accounting profession and you intend to stay there, then just having the CPA certification is really enough. In that area, the CPA is king, and any other qualification doesn’t really matter that much. The MBA is more useful if you want to be a controller, or CFO, or a management consultant – and that’s because what they teach you in the program can actually be put to good use in those jobs.
Another consideration is the quality of the school from which you earn the degree. The general thinking is that you should try to get it from a top 20 business school, since the school’s name recognition then goes along with the degree. I agree with that, but with a provision thrown in. After all, it may not be possible to be accepted into one of those programs, and they’re all incredibly expensive. Instead, consider a really good regional college that has good name recognition in that area. So if you continue to work in that area, the degree still gives you some name recognition.
Drawing from personal experience, my MBA is from Babson College. It’s a really good school just outside of Boston in the United States, and it has terrific regional name recognition. It’s not usually listed in the top 20 business schools, but it probably is in the top ten business schools in that area. Getting the degree from Babson definitely helped me get my first job out of college, because all of the auditing companies recruited there.
I don’t recommend any of the other MBA programs. There’re huge numbers of people who have the MBA degree, so you’ll just be one in the crowd, unless there’s some kind of name recognition associated with the program.
Another thought on the MBA is that it doesn’t do much to your starting pay if you earn the degree and then get a starting job in the auditing industry. I know, because I got an MBA and then went straight to work for Deloitte & Touche. All of the new hires swapped their starting pay information, and it turned out that the pay differences for people having only bachelor’s degrees, versus those with master’s degrees was just a couple of thousand dollars.
So, in summary, I still think the MBA is a good idea, but only the right MBA.
Basically, the name brand of the school from which you get the degree is more important than you might think. Also, the degree is only of practical use if you intend to either go into management or consulting.