What is the Difference between CFA® and CPA Designation?

What is the Difference between CFA® and CPA Designation?

Enrolling for a CPA (Certified Public Accountant) or a CFA (Certified Financial Analyst) is a big step towards advancing your financial career. However, although either will be an impressive addition to your resume, they will impact your career differently. Therefore, it would be best to understand the differences between the two designations before making a choice.

What is a CFA?

To become a Chartered Financial Analyst, you should complete the CFA curriculum from the CFA institute and gain the required experience in the investment industry. CFA is an internationally recognized qualification for financial analysts.

With a CFA designation, you will focus on understanding financial markets, analyzing various businesses, and advising companies and individuals to invest. CFA charter holders trade securities, manage funds on behalf of their clients to earn revenue. As a result, achieving a CFA designation will help you become an investment analyst, fund manager, portfolio manager, and financial advisor.

What is a CFA?

A Certified Public Accountant has passed training and the CPA Exam, and the state licensing requirements. Consequently, CPAs are licensed to offer accounting services such as filing tax returns to the public.

CPAs ensure that their clients pay their taxes, adhere to financial regulations, and find ways to help them save money in the financial industry. Additionally, CPAs help identify unusual and fraudulent activities.

Benefits of becoming a licensed CPA

There are various benefits to becoming a professional CPA.

  1. You will potentially earn more with a CPA in the financial industry than without.
  2. The added training will teach you skills and equip you to be a better accountant.
  3. A CPA license will give you more career opportunities and help you advance in your career.

Cons of earning a CPA license

  1. The cost of registering for and taking the CPA exam is high. Although the price varies from state to state, you will spend an average of $1,000 to enroll and several thousand dollars for the recommended course review. However, some companies reimburse employees, and you should check to see if you qualify.
  2. You will spend at least 300 -400 hours studying for the CPA exam. In addition, the test will take an average of 16 hours to complete.

CPA vs. CFA exam topics

The CPA exam has four sections which you are required to pass within 18 months. Each section
will take at least four hours. These are;

  • Auditing and attestation
  • Regulation
  • Financial accounting and reporting
  • Business environment and concepts

The CFA exam topics are;

  • Economics
  • Accounting and reporting standards
  • Information technology
  • Corporate governance
  • Auditing procedures and professional standards
  • Federal taxation
  • Ethics
  • Professional, legal responsibilities and business law
  • Financial and operations management and strategic planning

The CFA charter curriculum has three levels and covers a broader range of topics on financial analysis. The core topics in CFA include; ethical and professional standards, quantitative methods, economics, financial reporting and analysis, corporate finance, equity investments, fixed income, derivatives, alternative investments, and portfolio management.

CPA vs. CFA career options

You can work as a public accountant, private accountant, government accountant, non-profit accountant, or academics with a CPA license. On the other hand, a CFA can work as a research analyst, financial advisor, investment analyst, portfolio manager, or chief financial officer.

What are the requirements for attaining a CFA vs. CPA certification?

Requirements for earning a CFA charter are;

  1. To enroll in the CFA professional course, you should hold a bachelor’s degree or an equivalent or be in the final year of your undergraduate studies. You are also eligible to register for the CFA program if you have at least 4,000 hours of relevant work experience or 4,000 hours of the combined university and professional experience.
  2. Sit for and pass all three levels of the CFA exams.
  3. You should agree to abide by the CFA Institute Code of ethics and become a member of the institute by paying the fee.
  4. You should provide proof of 4,000 hours of full-time work experience in a position involving decision-making on investments or a product that contributes to the decision-making process. The work experience can be from before or after you did the CFA exam.

Requirements for attaining a CPA are

  1. To enroll for a CPA course, you should hold a bachelor’s degree and 150 hours of pre-licensure education, inclusive of the degree.
  2. Most states require at least two years of professional experience.
  3. You should pass the four CPA exam sections within 18 months.

Whether you become a CPA or CFA charter holder, you will analyze financial information, determine the profitability of various businesses and work with clients and companies to help them earn profits. However, as discussed above, each designation is responsible for different tasks.

Attaining a CPA or CFA accreditation is a long process that requires you to be dedicated and put in many hours. However, the sacrifice will be worth it. Start your journey to CFA certification with Analystprep.com and enroll in our study packages. We provide instruction from our experts and supplemental study materials including, online study notes and video lessons, question banks, mock examinations, and customizable quizzes.

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