When you're ready to advance in your finance or accounting career, earning additional qualifications can increase your earning potential or allow you to work in a role that you find more interesting or fulfilling. If you're trying to decide between a Chartered Financial Analyst (CFA) or a Certified Public Accountant (CPA), knowing the right option can be challenging. To that end, Becker outlines the differences between a CFA and a CPA, compares career paths and salary requirements, and provides an overview of the differences between a CFA and a CPA. the requirements for both options.
Table of contents
- What is the difference?
- Fulfillment of requirements
- Take the exam
- Career opportunities
- Income insight
CFA vs CPA: What's the Difference?
Let's first define these terms and outline what exactly they are.
What is a CFA?
A Chartered Financial Analyst, or CFA, is a financial professional who specializes in investment management and analysis. To earn this distinction from the CFA Institute, candidates must demonstrate competence and knowledge related to assessing financial markets, managing investment portfolios and making informed investment decisions, as well as ethics and professional standards. CFA charterholders must also have a deeper understanding of financial instruments, risk management and investment strategies, enabling them to work in the financial sector, asset management and investment banking.
What is a CPA?
A Certified Public Accountant, or CPA, is a certified public accountant recognized for their skills and competence in advanced areas of financial reporting, taxation and auditing. Candidates earn this designation from their state's accounting board after meeting experience and education requirements and passing the CPA exam.
With their skills in financial regulation and ethical standards, CPAs can provide services including tax preparation, financial analysis and consulting to government clients, or they can work internally within a company or organization.
CPA versus CFA
Both CPA and CFA are prestigious designations that demonstrate skills and competence. The main difference between CPA and CFA is that CPA is an accounting reference while CFA is for financial analysis. Although related in many ways, accounting and finance are ultimately separate fields.
More specifically, the CFA focuses on financial matters related to investments, risk management and strategy. CPA plays an important role in ensuring compliance, financial transparency and strategic decision-making and also has a much broader area of knowledge.
CFA vs. CPA: Meeting the Requirements
Both CFAs and CPAs must meet specific educational and experience requirements, pass an exam to determine skills and competencies in specific areas, and then maintain their status through Continuing Professional Education (CPE).
| Area | CFA | CPA |
|---|---|---|
| Education | Bachelor diploma | Varies by state, but all states require a bachelor's degree with a minimum of 150 hours of post-secondary education |
| relevant work experience | Between 1,000 and 4,000 hours of relevant work experience, depending on the higher education. The work does not have to be investment related. | Varies by state, but all states require a minimum of one year of full-time accounting work or part-time equivalent |
| Inspection | Pass a three-part CFA exam | Pass a four-part CPA exam |
| Professional further education | CFA Institute recommends a minimum of 20 CPE points annually. | It depends on the state, but most states require an average of 40 CPE credits each year. |
How do you become a CFA?
To become a CFA charterholder, you must enroll in the CFA program through the CFA Institute and sit for the Level 1 exam. Before you can enroll, you must have completed a bachelor's degree or equivalent from an accredited college or university or have graduated within 23 months of graduation.
In addition, you must have a combination of 4,000 hours of work experience and higher education, achieved over at least three consecutive years. The dates of education and professional work should not overlap. Work experience can be gained before, during or after enrollment in the CFA program. It must be completed before you earn the CFA charter.
It is important to note that work experience, including paid internships, does not have to be investment-related, but should also include higher-level judgment and business skills, including analytical skills and business communications.
You should too
- Pass the CFA exam – a three-part exam that must be taken in the order of Level 1, Level 2 and Level 3
- Submit two to three professional references
- Apply to become a regular member of the CFA Institute
How to Become a CPA
You receive your CPA license from your state's board of accountants, and each state has different onesCPA Requirementsto get your license. But as we mentioned above, you need to take the following steps:
- Earn your state's minimum amount of credits to sit for the CPA exam
- Register with your state to take the CPA exam
- Pass the CPA exam in four sections
- Complete 150 credit hours and possess a bachelor's degree
- Complete the equivalent of one year of full-time employment in accounting
- Apply for your license from your state
Most states also have ethics requirements that must be met before obtaining your license.
Taking the Exam: CPA vs. CFA
Let's take a closer look at the exams required to become a CFA or CPA and how they are similar and different.
| details | CFA | CPA |
|---|---|---|
| How many episodes? | Three: Level I, Level II and Level III must be taken in order | Four: Three core exams and choose one of the three disciplines to take in any order |
| Types of questions | Multiple choice and essay questions with vignette support | Multiple-choice and task-based simulations |
| How long does the exam take? | Each episode lasts four hours and 24 minutes | Each episode lasts four hours |
| Percentage of successes | 41%1 | About 50% |
| Total study time | 900 timer | 320 to 420 hours |
| Cost | $1,250 for each section, plus a one-time registration fee of $3502 | Application fees and registration fees vary from state to state. The National Association of State Boards of Accountancy recommends that states set the exam fee at $344.80 per exam section. |
Take a closer look:Download our free CPA Exam Guideand get a comprehensive overview of each part of the exam, the do's and don'ts of exam preparation, and even multiple choice questions!
CFA-exam
The CFA exam consists of three parts, with each section increasing in difficulty and building on the knowledge covered in the previous section. The CFA Institute recommends that candidates study a minimum of 300 hours for each section due to the complexity of the topics. Topics covered on all three exams include:
- Ethics and professional standards
- Quantitative methods
- Economy
- Accounting analysis
- Business problems
- Portfolio management
- Stock investments
- Fixed income
- Derivatives
- Alternative investments
CFA-examination structure
- The Level 1 exam consists of 180 multiple-choice questions, divided into two 135-minute sessions.
- The Level II exam consists of 22 sets of vignettes containing 88 multiple-choice questions. The test is divided into two sessions, both 132 minutes.
- The Level III exam consists of vignettes with associated multiple-choice questions and essay questions related to the vignettes. From 2025, the Level III exam will offer three specialized pathways to a more focused career path: Private Wealth, Private Markets and Portfolio Management. Like Level II, this exam is split into two 132-minute sessions.
CPA-exam
The CPA exam consists of three core sections that focus on knowledge and skills that are universal to all CPAs. All candidates must do the following:
- Audit and attestation (AUD)
- Financial Accounting and Reporting (FAR)
- Taxes and regulations (REG)
In addition to passing all three core sections, candidates must choose a discipline from three options:
- Information Systems and Controls (ISC)
- Business Analysis and Reporting (BAR)
- Tax Compliance and Planning (TCP)
These disciplines focus on the knowledge and skills required within a specialty.
Each episode lasts four hours and is divided into five "testlets". Two testlets are exclusively multiple-choice questions, and the other three are task-based simulations that require candidates to answer longer questions related to the information provided.
Take a closer look:Learn more about the CPA exam format
CFA vs CPA Exam Difficulty
If you base your decision on which exam is more difficult, CPA vs. CFA, there really is no clear answer. Both are challenging and require skills and knowledge in complex subjects. However, the CPA exam generally requires less study: approximately 80 to 120 hours per semester. section compared to 300 hours per section of the CFA exam, and the CPA exam also has a higher pass rate.
CPA vs CFA: Career Options
Most people choose their designation based on what they want, what career path they want. So what types of jobs do CPAs do compared to CFAs?
What does a CPA do?
As we mentioned earlier, CPAs often work in at least one of five areas:
- Audit and assessment
- Tax preparation and advice
- Consulting services
- Financial planning
- Procesadvies
This means CPAs can generate, analyze and certify financial statements, prepare tax returns and provide advice to help their clients become more profitable, reduce costs or minimize their tax burden. They can also conduct audits, both internal and external, to validate a company's finances.
What does a CFA Charterholder do?
CFA Charterholders, on the other hand, act more as analysts and advisors. They read past financial statements, look for patterns and opportunities to increase growth and profitability - and then make specific recommendations on how to achieve the company's or individual client's financial goals.
CFA Charterholders also often provide investment advice. They can help clients decide on the best investments to manage their wealth and grow their portfolios, taking into account factors such as risk tolerance and tax benefits.
CPA vs. CFA Responsibilities: Side by Side
The roles of CPAs typically fall under accounting, although they can also work in the financial industry. However, the role of CFAs is almost entirely focused on financial analysis. Becoming a CPA offers significantly more flexibility.
CPA | CFA | |
|---|---|---|
Primary focus | Accounting and taxes | Financing and investments |
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Take the next step:Career guidance for accounts
CFA vs CPA: Income Insights
As we mentioned, both CPA and CFA offer broader career opportunities, which can lead to higher salaries. Naturally, the salary depends on a number of factors, including the job itself, industry, amount of experience and location.
CPA | CFA | |
Average Base Salary for Certified Professionals (US) | $ 76.6394 | $ 91.7233 |
Although CFA charterholders earn slightly more than CPAs (at least according to this data), both credentials significantly increase your earning potential. With enough hard work and ambition, you will find plenty of opportunities to achieve your personal financial goals with the CPA or CFA.
Take the next step:CPA-salarisgids
CPA vs CFA: Which is Right for You?
Of course, there is no simple answer to this question. But we hope the information in this article has enabled you to make a smarter decision. Ultimately, your choice will come down to what types of things you like to do and what your career goals are.
Download our FREE eBook for the CPA Exam
If you want to learn more about the CPA exam, download our free 2024 CPA Exam Guide and get a clear overview of what to expect. What's in it?
- An overview of the CPA exam
- Comprehensive details of each section, including the exam format, section times, scoring details and key content areas
- Choose your field
- Do's and don'ts to prepare for the CPA exam
- Exam study tips
- Multiple choice practice questions
Download it here
