CPA vs. CFA: Which Career Path Is Right for You?

posted by

 

Image of female CPA and male CFA

 

The CPA and CFA are both recognized as valuable credentials for professionals in the financial services industry. However, understanding the distinction between the two can be confusing. There are subtle differences in both function and requirements, but accounting and finance professionals can leverage these credentials for ongoing career success. Choosing between the CPA and CFA designations is an important step in determining which business career path is right for you.

Certified public accountants (CPAs) have completed the Uniform Certified Public Accountant Exam along with meeting their specific state’s requirements for certification. The CPA exam is administered by the American Institute of Certified Public Accountants. In general, those who hold the CPA credential are responsible for tax reporting and filing, though specific job duties vary by role. They help companies and individuals maximize profits and minimize taxes, along with “producing reports that accurately reflect the business dealings of companies and individuals they work for,” Investopedia says.

Chartered financial analysts (CFAs), on the other hand, have completed the requirements of the CFA Institute’s program. This includes earning an undergraduate degree, completing each of the three CFA tests, and gaining industry experience. After obtaining this credential, CFAs work in a variety of financial analyst roles, examining “the growth and profitability of companies as well as their creditworthiness and the amount of debt they carry,” according to Investopedia. CFAs can perform personal financial planning and wealth management, as well as advising clients on investment decisions.

CPA vs. CFA Exams

Requirements for the CPA exam vary by state, but in general, applicants must be bachelor’s degree holders with 120 or 150 semester credits. They must also pass each portion of the exam and have relevant work experience. Educational requirements usually consist of 24 to 30 hours in accounting, and some states also require one to two years of accounting experience before taking the exam. Because of the strict educational requirements, many applicants choose to pursue a master’s degree in accounting to fulfill the necessary hours.

Anyone who holds a bachelor’s degree can sit for the CFA exam, but general requirements to earn this credential include passing each of three exams and having three years of relevant work experience. The exam consists of three, six-hour tests that cover:

  • Financial principles
  • Financial analysis and accounting
  • Portfolio management and decision-making

Careers After Certification

The following are some of the career options available to those who have completed the CPA and CFA exams.

CPA Careers 

  • Accountant and auditor: Perhaps the most straightforward career path after completing the CPA exam is becoming an accountant or auditor. These professionals ensure that financial statements are accurate and comply with regulations. Responsibilities typically include preparing tax returns, maintaining financial records, and making financial recommendations to management. According to the Bureau of Labor Statistics (BLS), the average salary for accountants and auditors is $67,190.
  • Controller: Also known as comptroller, this career involves overseeing the various financial departments within a company. This may include accounting, budget, audit, and other divisions. Controllers are responsible for “producing critical financial reports, profit and loss statements, balance sheets and financial prospectuses,” PayScale says. The average salary for these professionals is $78,488.
  • Chief financial officer (CFO): CFOs manage the financial operations of companies, serving as the leaders and decision-makers of accounting and finance departments. It is the responsibility of CFOs to ensure that all financial operations comply with laws and company policies. The average salary for these executives is $125,026.

CFA Careers

  • Portfolio manager: This career path is among the most popular for those who have completed the CFA exam. Portfolio managers are responsible for managing investments. “The portfolio manager may be a client-based advisor who works with individuals and businesses to manage a group of investments and assets; they may also handle financial products such as mutual funds,” PayScale says. The average salary for portfolio managers is $82,600.
  • Financial analyst: Another popular career path for CFAs, financial analysts are responsible for recommending investments to their clients. They study business and market trends to ensure they are giving sound financial advice. Financial analysts determine the value of businesses based on financial statements, and they prepare written reports on the results. The average salary for financial analysts is $80,310, according to the BLS.
  • Consultant: Financial consultants also serve as advisors to their clients, but they usually work for investment banks or financial services companies. By understanding clients’ financial needs, they help assemble investment portfolios in order to build wealth. One of the most important aspects of this career is informing potential investors about the services offered by their organization. The average salary for these professionals is $65,252, according to PayScale.

Graduate Business Education at King University

Whether you choose to earn the CPA or CFA credential, the right education can help you make the most of your career. King University offers an online MBA with specializations in both accounting and finance. You will learn advanced business skills related to management, decision-making, communication, and more, along with specialized coursework in accounting or finance that enables you to focus your education and meet your goals. Begin or advance your career today with an MBA from King University.