Although many accounting professionals acquire licenses for both Certified Public Accountant¬ (CPA) and Charted Financial Analyst (CFA) designations, there are note-worthy differences between the two. Prospective accountants who get a better understanding of these designations early are able to figure out and follow the best accounting career path for themselves.
In a nutshell, a CPA covers the vast array of accounting transactions that take place in a company. Much of this involves week-to-week, sometimes day-to-day, tracking of revenues and expenses.
A CFA most often works outside a specific company and guides investment advice for people and businesses. A CFA employed at a single company spends his or her time really drilling down into the data to help build sound strategy for moving forward for clients.
CPA vs CFA: Beneficial Differences
What Does a CPA Offer?
An accountant that has a CPA qualification will always be in demand. The designation offers other benefits such as:
- Broad responsibilities: CPAs often have an ability to take their pick of accounting jobs, from independent management consulting to comprehensive auditing. The CPA designation indicates a broad knowledge, which means they can handle more than one type of accounting need.
- In-demand work opportunities: Accounting jobs are not limited to private firms, as CPAs are in demand in quasi-governmental organizations (i.e. the United States Post Office) and government offices, as well.
- A shared baseline of knowledge among co-workers: Those with accounting master’s degrees have a stronger foundation of accounting fundamentals needed to pass the CPA exam and practice accounting.
- Accelerated career progression: Some accounting jobs require a CPA before a promotion or salary increase will be considered. The CPA provides a proven level of knowledge that is important to (and sometimes required by) employers.
What does a CFA offer?
CFAs are in demand by investment banks and other similar institutions involved in handling investment portfolios for clients. Other benefits of the designation are:
- Knowledge: Conversant with broader topics outside accounting that offers a different value from CPA counterparts.
- Salary: In certain roles, because of commissions and bonuses, the salary is often better. It’s an extremely competitive field due to these perceived salary levels.
- Specialization: Companies who hire in-house CFAs often need an insight into their financials that they lack. Sometimes, CFAs are hired solely to take the reins of a certain investment segment. In other words, some larger companies may invest in real estate, equities, leveraged debt, and mutual funds. Each area requires specific expertise
- Community: The CFA Institute is a well-regarded organization to join. It is active in promoting and hosting events on both very specific duties – such as designing portfolios for fixed incomes – and more general ones. A general subject event might include something like a presentation on the effect of gender diversity on business success. Both of these were offered in the first quarter of 2016.
CPA or CFA: Which is for you?
Either of these accounting designations can help you achieve advancement in your career. Both CPA and CFA designations can be used in combination with each other to land a career of your dreams.
With that said, the needed day-to-day skills and personal qualities differ in significant ways. The final decision on whether to pursue a Certified Public Accountant or Chartered Financial Analyst largely depends on your skills, where you think you’d do best and be happiest, and what your employer requires for advancement. If you are up for it, of course, you can decide to pursue both credentials to increase your value in the workplace.
What is CMA Certification?
There are many other credentials you may considering pursuing, such as the CMA certification. Offered by the Institute of Management Accountants, the CMA differentiates accountants who are qualified to work inside organizations, and emphasizes technical expertise for strategic purposes. While the CPA designation is generally focused on professionals in auditing and accounting, a CMA designation concentrates more on leadership, effective management and analysis. Because the expertise for CPAs and CMAs vary from each other, knowing what type of accounting you’re interested in is vital.
The CMA certification requires taking an exam, made of 4-parts:
- Business Environment and Concepts
- Financial Accounting and Reporting
- Audit and Attestation
The exam is structured to help develop and monitor critical thinking and management skills. The exam can be taken within certain “exam windows”. These windows last 2 months, and there are 4 windows in each calendar year (Jan/Feb, Apr/May, Jul/Aug, Oct/Nov).
Since 1972, more than 30,000 professionals have taken, and passed, the exam. While you don’t have to pass the CMA exam to work in accounting leadership positions, obtaining the CMA certification offers a huge advantage in the job market. In fact, in a recent IMA’s salary survey, it was found that CMAs earn nearly 61% more in total salary compared to those who do not hold the CMA certification.
Learn more about these credentials by downloading our free professional accountant guide.