Professionals in the finance industry choose to pursue professional qualifications to excel in their respective careers. CPA and CFA undoubtedly are the two most renowned and prestigious designations in their field.
They can’t be compared on the same level to distinguish and know which qualification is better as they represent two different sectors in the field of general accounting and finance.
Key Takeaways
- CPA (Certified Public Accountant) focuses on accounting, auditing, and taxation, while CFA (Chartered Financial Analyst) emphasizes investment management and financial analysis.
- CPA is a US-based certification, whereas CFA has more global recognition.
- CPA requires work experience in accounting, while CFA demands experience in finance or investment-related fields.
CPA vs CFA
The certified public accountant (CPA) is a professional designation credential primarily associated with careers in accounting. Chartered Financial Analyst (CFA) Program is a professional post-graduate certification with a three-part exam associated with a wide range of positions in the finance industry.
CPA is a qualification offered by the Board of Accountancy to a licensed accounting professional for each state. This designation helps in enforcing the standards of professionalism in the industry of accounting.
A certified public accountant must meet the requirements of education, examination, and work which includes having a bachelor’s degree in business administration and finance.
A CFA or chartered financial analyst is a globally renowned professional identity provided by the CFA Institute that was previously known as the Association for Investment Management and Research or AIMR, which measures the capability of a financial analyst.
A candidate for CFA needs to pass three stages of examination which include accounting, money management, security, ethics, and economics.
Comparison Table
| Parameters of Comparison | CPA | CFA |
|---|---|---|
| Definition | CPA is a professional designation that works in the field of accounting, tax and audit, etc. | CFA is a financial analyst that works in the field of money management, economics, ethics, etc. |
| Syllabus | Regulation. Audit & Attestation. Business Environment and Concepts. Financial Accounting and Reporting. | Financial Principles. Portfolio Management. Financial Analysis. Accounting. |
| Course Duration | CPA course lasts up to 1.5 years. | CFA course lasts up to 4 years. |
| Difficulty | The difficulty rate is moderate and 50% of candidates pass this examination. | The difficulty rate is high with only 10% of candidates clearing this examination. |
| Jobs | Forensic Accountant. Public accountant. Financial analyst. Internal auditor. | Corporate Financial Analyst. Consultant. Portfolio Manager. Research analyst. |
What is CPA?
A certified public accountant Is a professional accountant who has fulfilled all the requirements needed to earn the title of CPA through experience, training, education and have passed the CPA examination.
CPA is not considered as a normal job or career path, but an identity of a professional which allows them to have more flexibility in their career. Generally, CPAs are licensed in only one state but can be licensed in more based on reciprocity laws.
Within industries, a person seeks for CPA for their reliability, knowledge about the industry, and credits. The American Institute of Certificate Public Accountant has stated the popular sectors where a CPA work. These sectors include:
- Public accountant
- Business and industry
- Education
- Non-profit organization
- Government
This list is not comprehensive as a CPA designation can earn opportunities in almost any industry. All CPAs are considered to be accountants but not all accountants are titled as CPA.
The work of a CPA is not restricted only to one industry or job function. While keeping track and interpreting financial records, a CPA can perform other works too as a result of the knowledge that they have gained while preparing for their examination.
Depending on their respective State board requirements, CPA candidates are needed to complete their 40 hours of continuing professional education otherwise known as CPE every year.
Due to the difficulty level of the CPA examination and commitment to continue education, many people in this industry consider the CPA license as the most renowned and prestigious designation one can earn.
What is CFA?
The designation of a Chartered Financial Analyst falls under the most renowned and respected credentials across the globe.
The significance of CFA excels the equity of research and its cachet is capable of opening doors to the vast spectrum of opportunities in the sector of finance, including corporate finance, investment management, and investment banking.
Financial advisors hold various forms of professional certification but, in the world of investment management, CFA holds the maximum weight due to the reason that they have a detailed understanding of the Global Body of Investment knowledge.
The process of becoming a professional CFA requires clearing the series of three examinations for qualifying and it can easily take up to 300 hours or more of self-study for preparing for a single level.
The examination of CFA is so difficult to clear that nearly a quarter of the candidates that have enrolled for this designation does not show up for their examination.
The institute of CFA analyzed the results of the exam till 2019 and found that up to 50 % of candidates fail to clear the first two qualifying examinations and the rest who manage to clear them to fail in the last test expect a few who manage to pass.
Candidates who gave an examination for CFA never get to know their original score, just a pass or fail with an indication of their performance in the subjects.
Main Differences Between CPA and CFA
- A CPA designation is controlled by the AICPA i.e. The American Institute of Public Accountant whereas the designation of CFA is controlled by the CFA Institute.
- CPA covers all the areas of financing and accounting whereas CFA covers the areas of investment analysis and portfolio management.
- CPA has a single-level examination with three sections whereas, CFA has three-level examinations.
- For earning a CPA designation, the candidate should have a bachelor’s degree along with 150 credit hours of education while for acquiring the CFA designation, the candidate should have a bachelor’s degree.
- The CPA candidate should have 1 to 2 years of work experience which varies according to their respective State whereas, the candidate for CFA should have 4000 hours of work experience or higher education.
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