CFA vs CPA: Which is Better for You?

Knowing which is better between CFA and CPA is subjective. In this article, we have shared a comparison between the two widely recognised finance certifications, CFA and CPA, in various aspects to help individuals make an informed decision while choosing one. Read below to know more.

CFA vs CPA: Know Which Is Better

CFA vs. CPA: Earning an additional credited credential is a good choice to move forward in the field of finance. Choosing between CFA and CPA can be a little tricky. There are different financial professionals and designations. Accountants and analysts are both important sources in the financial sector, but the distinction between their functions can often be subtle.

The CFA primarily emphasizes on investment and portfolio management, utilizing various investment tools for tasks such as asset valuation and portfolio management. In contrast, the CPA focuses on accounting, taxation, and auditing. CPAs employ auditing techniques to establish tax rates and set accounting standards.

The major and primary difference between these two certifications is that CPA focuses on accounting and CFA is for financial analysis.

Although CFA and CPA are both financial certifications that can open numerous doors for an individual's career path, choosing either can be tricky. In this article, we have compared the CPA and CFA courses in various aspects such as salary, career prospects, exam pattern, difficulty, etc.

CFA vs CPA: Know the Financial Certifications

CFA: The Chartered Financial Analyst (CFA) program, offered by the CFA Institute, is an internationally esteemed certification known for its rigorous standards. The program is structured across three levels, each focusing on developing a comprehensive understanding of advanced investment analysis and practical portfolio management skills. Achieving the CFA designation requires students to complete a well-defined curriculum and successfully pass three challenging exams, reflecting their expertise in the field.

Also Read: CFA exam

CPA: Certified Public Accountant (CPA) is a designation for legally qualified accountants around the world. Conducted by the American Institute of Certified Public Accountants (AICPA), the Uniform Certified Public Accountant exam, offers a CPA designation that specializes in the field of accountancy and taxation. CPAs produce financial records. They produce reports which reflect the business dealings of the companies and individuals for which they work. They may also be involved in tax reporting and filing. They help individuals in finding the best course of action in terms of minimizing taxes and maximizing profitability.

In other words, the CPAs prepare and audit the financial statements and the CFAs read and analyze the financial statements.

CFA vs CPA: Differences in Curriculum

The CPA curriculum and syllabus focus on auditing, financial accounting, and regulation thus ensuring companies accurately reflect their business performance and financial health.

The CPA exam is divided into four testlets which are of four hours duration each. Students appearing for the exam have to pass all the four testlets within a duration of 18 months. These four tests are:

1. Auditing and Attestation (AUD)
2. Business Environment and Concepts (BEC)
3. Financial Accounting and Reporting (FAR)
4. Regulation (REG)

The important topics of the CPA curriculum include auditing procedures and professional auditing standards, standards related to attest, assurance, accounting and review engagements, corporate governance, economics, information technology, financial management, strategic planning, operations management, accounting and reporting standards applicable to not-for-profit organizations and government entities, federal taxation, ethics, professional and legal responsibilities and business law.

On the other hand, the CFA curriculum focuses on investment analysis and portfolio management. The CFA program is designed to advance investment careers and deep knowledge of investment analysis.

The important topics in the CFA syllabus include ethical and professional standards, quantitative methods, economics, financial statement analysis, corporate issuers, equity investments, fixed income, derivatives, alternative investments and portfolio management.

Also Read: CFA exam preparation tips

CFA vs CPA: Difficulty Level of the Exams

Considering the difficulty level of CFA and CPA, the CFA’s difficulty level is high and can be trickier and more confusing than CPA. The CFA exam covers a much wider range of study material as compared to the CPA exam.

The pass rate of the CFA exam is way lower than that of the CPA exam. The CFA exam requires approximately three times more study hours as compared to CPA. The CFA exam requires the students to learn new concepts and topics of the finance industry rather than reworking and reviewing the material at work.

Also Read: CFA Exam: Cost, Curriculum and Difficulty Level

CFA vs CPA: Key Differences

Here is an overview of the key differences between CFA and CPA certifications:

CFA vs CPA: Career Paths

The industries that the CFAs and CPAs work in are very different. The CFAs work in the investment industry while the CPAs work in multiple industries including accounting, taxes, etc.

CPA Career Opportunities

Refer to the table below to know some of the career options after becoming a CPA.

CFA Career Opportunities

Refer to the table below to know some of the career options after CFA:

CFA vs CPA: Salary Differences

Salaries of CFAs and CPAs differ widely based on locations, experience level, organization size, etc. The average salary of CPA is USD 94,000 whereas the average salary of CFA is USD 1,02,000. In India, the average salary of CPA and CFA is INR 7 LPA and INR 8 LPA, respectively. With experience, the average salary of a Chartered Financial Analyst can range between INR 15 LPA to INR 20 LPA in India.

CPA vs CFA Global Demand and Opportunities

The demands of finance professionals vary depending on the location, experience, organizations, etc. Certified Public Accountants are highly in demand in the United States and in countries with US-based organizations. CPAs have better career opportunities in sectors such as Auditing, Tax, Financial Reporting, Corporate Finance sector, etc. CPAs are particularly in high demand in North America.

While the CFA is a globally demanded profession. The Chartered Financial Analyst profession is highly sought after worldwide. Sectors such as Investment Banking, Portfolio Management, Financial Analysis, etc. are a good choice for CFA professionals. There are no region-specific demands for CFAs as they have a broad international appeal across financial sectors.

CFA vs CPA: Pros and Cons

Every course has some pros and cons. Check out the table below to know the course-wise pros and cons:

CPA: Pros and Cons

CFA: Pros and Cons

CPA vs CFA: Which is Better?

There is no definite answer to which is better – CFA or CPA, and is entirely subjective. CPA and CFA are both highly rewarding and recognized financial certifications which provide a great degree of mobility and flexibility for a career in the field of finance and investment while offering an excellent career path. When choosing which is better, students should assess their career goals and aspirations.

If the student wants to solely focus on finances and analyzing financial statements, the CFA might be a better choice but if he/she wishes to explore career advancement opportunity which revolves around accounting, auditing, etc. then he/she should look to pursue a CPA certification.

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