Once you step into the field of finance and accounting, there are so many paths that it often becomes hard to choose one.
And when you want to pursue a career as a professional and independent accountant, CPA (Certified Public Accountant) is mandatory in many countries like the USA.
But CPA is not the only certification you can take. There are many other professional certifications like CA, CFA, ACCA, ACMA, CIMA, etc.
When talking about CPA, one certification often talked about is CFA. It is a common belief that CPAs should go for CFA as well to improve their salaries, scope of work, and credibility. But does it actually holds true?
It can only be answered after comparing both qualifications, their merits & demerits, and considering the combination of CFA and CPA.
In this article, we will talk about CPA, CFA, and whether there is any value in a CPA doing CFA. We will answer all your questions regarding the combination of CFA and CPA and the benefits of pursuing CFA after completing CPA.
So let’s get into it.
What Is CPA?
CPA stands for Certified Public Accountant, considered the most advanced accounting certification to get a license and work as an independent accounting & financial professional.
To get a CPA designation, an individual must possess certain education and experience besides passing certification exams.
The Board of Accountancy in every state is responsible for awarding professional CPA certification. However, the American Institute of Certified Public Accountants provides resources for obtaining a CPA license.
CPA is considered the most prestigious certification, equivalent to Chartered Accountant(CA) in many other countries.
After completing a CPA, the public accountants can join public accounting, corporate accounting, or government service. In many cases, CPAs are offered positions as controllers, chief financial officers(CFOs), etc.
One notable thing about CPA designation is that it is specific to the country where the candidate has taken the exam. For instance, if a person is attempting CPA in the USA, the license will be granted for the USA.
How To Become CPA?
The real question is how to become a CPA.
What are the educational requirements and experience required? How does a CPA work? What are the subjects and courses studied in CPA?
Here are answers to all the questions being asked.
Let’s start with the education requirements and experience required before you can take the CPA exams. An individual looking forward to becoming a CPA must fulfill the following requirements:
- Must have completed Bachelor’s Degree with at least 150 credit hours of coursework. Unlike popular belief, getting a bachelor’s degree in accounting is not mandatory. However, it is recommended to take an accounting major to compete successfully. You can also earn a Master’s degree to increase your success rate as Master’s degree holders are greater in number to pass CPA than bachelor’s degree holders.
- There are no certain requirements regarding any prior CPA exam experience.
How is the CPA exam divided into different stages?
The CPA exam has 276 multiple-choice questions, 28 task-based simulations, and three writing portions. The whole content is divided into four sections:
- Auditing and Attestation
- Financial Accounting
- Business Environment and Concepts
Passing marks are 75% minimum in each section, and all four sections have to be passed within a period of 18 months or 1 ½ years.
What Is CFA?
Now, what is CFA?
CFA stands for Chartered Financial Analyst, and the CFA institute awarded the certification, previously known as AIMR(Association for Investment Management And Research).
CFA is standard to measure the competency of financial analysts.
Professional accountants and financial analysts must possess competency in areas like accounting, ethics, security analysis, economics, money management, etc.
Just like CPA, CFA is also one of the most respected and prestigious charter certifications, often considered the gold standard in investment analysis.
After getting CFA certification, professional financial analysts are believed to have expertise in real-world investment analysis. It is a three-part exam that tests different areas and skills of professionals.
How To Become CFA
The real question is how to become a CFA and join the global community of 170,000 CFA charter holders. Here are the requirements regarding education, experience, expertise, etc., to become a CFA:
- For education requirements, you must possess a bachelor’s degree or be in the final year of a bachelor’s degree. According to the CFA institute, you must have 900+ hours of self-study, 10 topic areas, and in-depth investment analysis, portfolio management, and ethics knowledge.
- For experience, you must possess 4 years of experience combined with your education. According to the CFA Institute, 4000 hours of experience is required to appear in the exam of CFA.
The certification has been divided into three parts:
Level I Examination
Focus on investment tools, corporate finance, economics, financial reporting & analysis, quantitative methods, derivatives, equity investments, fixed income, and portfolio management & wealth planning.
After passing Level I, students are offered to take the Level II exam conducted once a year. The focus of the Level II exam is on the following areas:
Finally, the Level III exam is offered to students qualifying the Level II. Level III exam is also conducted once a year, and the students are required to synthesize all concepts and analytical methods from the entire curriculum.
The focused areas are as follows:
What About CPA CFA?
Now to a combination of CPA and CFA. What if a public accountant chooses to go for CFA as well?
There are two different perspectives of specialists about the combo of CFA and CPA. The first school of thought believes that CFA and CPA simultaneously might not give a big advantage.
Instead, it will be expensive to bear the costs of both different courses from different industries.
On the other hand, the second school of thought believes that doing CPA CFA makes you an accounting and financial expert simultaneously.
You can quickly advance in any respective field if you have obtained a CFA along with a CPA.
Benefits of CFA for a CPA
Let’s discuss the benefits of getting a CFA along with a CPA.
1. Better Industrial Expertise
In-depth industry knowledge is one of the most acknowledged benefits of getting an additional certification besides your Public Accountant certification.
The individuals looking to build industrial expertise in research within hedge funds, investment banks, mutual funds, etc., must go for a CFA certification along with a CPA.
2. More Career Choices
If there were 4 career choices for you when holding a CPA, getting CFA certification will open 4 more career paths for you as a professional.
If you have already done your CPA but want to switch to the investment banking and financial analysis industry, getting a CFA charter is the fastest way possible.
CFA designation adds investment know-how and in-depth analysis to your skillset, making you a more desirable employee for different financial institutions and banks.
3. More Professional Skills And Credibility
Your professional credibility will also increase with a broader skillset and knowledge base. When you have passed three CFA exam levels in addition to the four stages of CPA, you are not knowledgeable on the paper.
Still, it enhances your professional competence in economics, finance, portfolio management, accounting, etc.
It also increases your credibility as a professional because only highly-motivated and committed individuals can do the hard work required to earn CFA.
It is clear evidence of your work ethics and commitment to your professions that make you a desirable candidate for different employers.
4. Faster Advancement In Career
Your pace of advancement in the career also increases when you get an additional certification of CFA along with CPA.
Well, you can find a dream financial analyst job sooner than holding an MBA degree or only a CPA degree.
Besides, the educational courses and professional resources in CFA are at industry standards, making it a more competent degree than an MBA or other certification.
5. Exemptions Of Licensing
In many countries, holding a CFA degree along with CPA makes licensing process quick and easier. If you hold a CFA, you won’t have to go through the entire licensing process CPA.
If you plan to move to one of the countries that provide exemptions, getting your CFA is equal to getting one step closer to a smooth relocation.
6. Higher Salaries
The pay packages you will get as a CPA CFA are better than holding one certification. With your CFA certification, you can earn around $87,000 to $499,000 per year, depending on your designation and years of experience.
For instance, a financial banker makes around $153,000, but an investment banker with the same experience makes around $323,000 yearly.
We have discussed all the possible benefits a certified public accountant can enjoy if he opts to get an additional certification of CFA.
We hope the article will help you decide what to pursue further with your CPA degree. We wish you a good career path, professional competency, and salary!