Updated October 12, 2023
Difference Between CPA and CFA
Completing a certification and gaining a credential has been one of the finest ways for accounting professionals to boost their expertise and knowledge and, in turn, get an opportunity for a good career path and increase their pay scale. One could choose various such credentials, subject to the area of finance/accounting one would want to focus on. It is essential to select your credentials carefully, as each is unique and provides certain benefits; if not, it won’t count.
But here, the question won’t be which one would be better. It is more like which one would be better for you. Achieving these credentials won’t guarantee any success in the respective careers they lead to. Hence, the most important thing would be to decide what you want to be and what you want to do. This seems easy, but when you would sit down to determine it, it would get difficult to verbalize why you chose to take up that as your career.
In this article, we will focus on two of the best-known and highly significant credentials, CPA vs CFA. Certified Public Accountant (CFA) and Chartered Financial Analyst (CFA), applicable under various job functions in the finance industry, would help you choose the right one. However, the decision to take up the credential depends on the direction you want to give your career.
It be any certification, there are three most basic requirements: completing the educational requirements, experience requirements, and clearing all the exam levels.
Read along to discover the difference between these certifications, CPA vs CFA, in terms of exam details, requirements, and career.
Certified Public Accountant (CPA)
- CPA has been, so far, the most known credential in the accounting and finance world.
- A CPA license is legally essential for specific jobs, such as public accounting, i.e., independent auditing.
- It permits you to charge for accounting services you provide to the public.
- CPA is helpful in corporate but valuable in the public sector.
- Many people see a CPA as someone who prepares tax returns, but CPAs do much more than that, and one does not require a CPA license to prepare the same.
Chartered Financial Analyst (CFA)
- CFA could be one of the hardest credentials to obtain and is specifically focused on investment banking.
- It was introduced in 1963 and is considered one of the highest designations in the finance domain.
- It is a credential that certifies its holder as competent and honest. This reputation in the business world is recognized in many countries.
- The CFA degree is not a legal requirement to work as a financial analyst but is an excellent way to crack some of the most critical jobs.
- To get the best jobs in an investment bank, you either require an MBA from the top institute or the second-best option would be to have a CFA designation and good relevant experience.
CFA and CPA Exam Date (Updated 2023)
|CFA Exam Dates
|CPA Exam Dates
|Level 3 –
CPA and CFA Exam Details – Comparative Table
|It is controlled by the American Institute of Certified Public Accountants, the governing body of CPAs in the United States.
|The CFA is a charter issued by the CFA Institute, United States
|To obtain the credential, there are four parts to the exam
|To obtain the credential there are three parts to the exam
|Mode of exam
|It is a 14-hour, computerized exam for all the parts together
|The duration of the exam is six hours for each part and is paper-pencil-based
|The window is of two months period, and there are four such windows during the year (Jan-Feb, Apr-May, Jul-Aug, Oct-Nov)
|There are exam windows where the Part 1 exam is offered twice a year in June and December, whereas Part 2 and 3 are offered only once in June.
|Educational obligations form a major requirement.
|According to the guidelines by the institute, you need to prepare for at least 300 hours for each of the three levels
|The exam consists of the following sections:
|The exams consist of the following sections:
|The four parts of the exam test the subject matter independently
|The three parts of the exam do not test the subject matter independently. The CFA constructs each exam covering many of the same subjects, such as ethics and financial analysis, but just at broader and deeper levels. The first exam tests the candidate’s broad financial principles, the second is a more intensive test on financial analysis and accounting, and the third exam is broadly based on portfolio management and decision-making.
|Pass rates for the exams are usually 50% or slightly lower than that, and the exam is only in English.
|The pass percentage is less than 45-50% on average for all three parts, and if you do not pass the second or third exam, you will have to wait a year to attempt it again.
CPA and CFA Requirements
|The educational criteria/requirement also varies by state, but typically, to appear for the CPA exam, applicants should have a bachelor’s degree along with 120 semester hours.
|Regarding the educational requirements for the CFA credential, you would require only a bachelor’s degree.
Even if you do not have one, this condition can be satisfied if you have 4 years of professional experience.
|Additional educational requirements
|Additional educational requirements generally comprise 24 to 30 semester hours in accounting earned through a graduate or bachelor’s degree in business. Many students also pursue a master’s degree to complete the educational requirements.
|As far as the work experience is concerned, it would vary across states, but mostly, they must have completed at least 1-2 years working directly for the CPA.
|CFA would require four years of professional experience in a related field that has a direct role to play in the investment banking process. Furthermore, they need to be members of the CFA Institute.
|To obtain the CPA certification, applicants must clear the Uniform CPA Exam, gain applicable work experience, and meet additional educational requirements.
|To obtain the CFA certification, applicants must clear the CFA exam and gain applicable work experience.
CPA vs CFA Career
- Accounting as a career choice is an in-demand field and will continue to be. According to the U.S. Bureau of Labor Statistics, employment in this field will grow by $49,000 and $113,000, with a median salary of around $68,000
- Once a CPA within this area of public accounting, you could work for any sized firm, from a large CPA firm to a small local accounting firm.
- You could work in various fields at the firm, such as audit, tax, and management consulting. If you want to work for any corporation or business, you could choose a field in financial accounting and reporting, management accounting, financial analysis, treasury/cash management, hedge funds, etc. On the other side, at the government end, you could work either at the federal, state, or local level. There are also various opportunities available for non-profit organizations.
- There are various career opportunities after having earned this certification, including financial analysts, treasurers, financial advisers, research analysts, traders, private bankers, portfolio managers, and investment banking analysts, $56,000 and $120,000, with a median salary of $95,000
- This charter provides you with international recognition and imparts highly acknowledged skills.
- Since CFA provides the skills to a candidate required at the professional place, most companies use CFA degrees as one of the parameters to shortlist the candidates for the interview.
- Moreover, these jobs are considered more lucrative than other finance jobs.
Each of these certifications is relatively unique, focused on specific areas of finance and accounting, and caters to a particular purpose. One should choose their credentials, considering the cost-benefit analysis for them. Pursue your passion irrespective of the risks, as whichever credential you choose requires dedication, discipline, and hard work to earn and succeed. All the best!
my knowledge cutoff was in September 2021, and I cannot predict the schedule for the CFA exams in 2021 or later years. I suggest you visit the official website of the CFA Institute or contact their customer service for the latest information on the exam schedule.
|February 16- March 1
|May 25- June 1
|August 31- September 4
|May 25- June 1
How to Enroll
To enroll for the Certified Public Accountant (CPA) program offered by the American Institute of Certified Public Accountants (AICPA) and the Chartered Financial Analyst (CFA) program offered by the CFA Institute, you need to visit their official websites and follow the registration guidance provided.
CPA vs CFA Infographics
Learn the juice of this article in just a single minute, CPA vs CFA Infographics.