Finance professionals often seek professional qualifications to advance their careers. The Certified Public Accountant (CPA) and Chartered Financial Analyst (CFA) designations are arguably two of the most prestigious titles in their respective fields. We'll cover the difference between a CFA and a CPA to help you decide which is right for you. After all, you can choose to follow both!
Here is the text version for reference:
CFA or CPA: Overview
The CFA and CPA titles cannot be compared apples to apples, as they represent qualifications in two different subfields within the general field of accounting and finance.
CPA is for accounting. CFA is for finance.
What is CPA? What does CPA mean?
The CPA, or Certified Public Accountant, is a "black belt" in accounting. It was originally a designation for public accountants, but private accountants, tax accountants, and financial professionals also seek the CPA designation to demonstrate their expertise in number crunching. In addition, the CPA license holder has legal rights to sign audit reports, which makes the title unique.
What is CFA? What does CFA mean?
CFA, on the other hand, is the gold standard in finance and investing. For those seeking careers as equity analysts, fund managers and asset management or hedge fund professionals, this is the best title you can get.
Some people mistakenly label the initials as "CPA" or "CFA," but the actual title is "CFA."
CFA vs. CPA: Application and Certification
CPA qualifications
The CPA license is granted by each of the 50 states and 5 other jurisdictions (such as Guam and the District of Columbia) in the United States. There is no central governing body and each state has slightly different CPA exam and licensing requirements. For example,CPA work experience requirementsdistinction between jurisdictions.
TheCPA requirementsare the most difficult of all finance-related qualifications. Applicants must have at least a four-year bachelor's degree and in most cases 150 credit hours (equivalent to a five-year college degree) to take the exam.
Because of the high barriers to entry and the complicated application process, passing the exam for non-US applicants is a big challenge.
CFA qualification
The CFA is a designation awarded by the CFA Institute, a global not-for-profit organization. The Institute is headquartered in the US, but there are three regional offices and 200 local affiliates around the world. Candidates apply through the institute and the application process is relatively simple.
The candidate is enoughhe has a degreeor four years of almost any work experience, that person can take the exam. The candidate can also take the exam before graduation.
CFA vs CPA difficulty
When it comes to the difference between the general CPA and CFA qualifications, the CPA license is the more complicated of the two. Credit hour requirements are very specific and often vary by state. Therefore, most international students must have their educational transcripts translated and independently evaluated before their degrees can be accepted by the state board of accountancy.
It is much more difficult and complicated to qualify to take the CPA exam, especially for non-US candidates.
CFA vs. CPA: Exam Content and Format
CPA
There are four parts of the exam: financial accounting and reporting, auditing and attestation, regulation andBusiness environment and concepts.
The exam is 100% computerized and consists of multiple choice questions,task-based simulations(case studies), iwritten communications.CPA Exam Scoringit is mainly a computer.
You can choose to take four parts one at a time, two at a time or even four at once. Although before you had to wait aCPA test window, as of July 2020 continuous testing is now available. If necessary, you can now repeat the test once you have received the results of the previous attempt.
You can take the exam at any Prometric test center in the US. Exam centers also exist in Japan, Brazil and four Middle Eastern countries. Furthermore,CPA Exam Results Release Datesjust a few weeks after your exam date.
CFA
The format of the CFA exam is less flexible. There are three levels of exams and one must be completed to advance to the next. The exam content focuses on financial analysis and portfolio management rather than accounting, auditing and taxation.
Recently, largely due to restrictions related to Covid-19, the CFA exam changed to a fully computerized format. This has allowed CFA Institute to offer it more frequently. Now you can download level 1 in February, May, July, August or November. Similarly, Levels II and III are now offered in May, August or November. In each of these months there is a period of six to ten days in which you can schedule your exams.
Despite switching to computer-based testing, you must take the exam at a designated testing center. There are many international test centers for the CFA exam in major cities and metropolitan areas.
The CPA exam has four test parts. You can download each part in any order and at any time thanks to the new continuous testing policy.
The CFA exam has three levels. You must take three consecutive exams, and each exam is offered within three to five windows a year.
CFA vs CPA Exam Difficulty
When it comes to qualifying exams, many candidates rightly want to know whether the CFA or the CPA is more difficult. While the answer to this question can be subjective, depending on your personal strengths and weaknesses, it is helpful to compare recent success rates. In 2020, the average pass rates for each departmentCPA Examranged from 49.98% (FAR) to 65.56% (BEC). Instead, the latest results available forCFA Examshow success rates ranging from 49% for Level I to 56% for Level III.
This makes it appear as if the exams are of roughly equal weight. However, the 2020 CFA exam pass rates are relatively high. For the years 2010-2019, the average CFA pass rates were 41% for Level I, 44% for Level II, and 53% for Level III. This would mean that the CFA exam has historically been more difficult. Additionally, although opinions differ, some people who have passed both believe that it would be more difficult for a current CPA to pass the CFA exam than the other way around.
CFA vs CPA: Time required to qualify
CPA
Most candidates aim to pass the CPA exam within a year. Some who have the time and commitment can study all the material in six months, take all four parts of the exam at once, and pass.
Most state boards require one year of accounting experience before licensure, and for most states this is the caseexperiencemust be supervised and verified by a US CPA.
CFA
The new continuous testing program could allow faster passing of all three levels of the exam. However, as of now, most candidates take four years to complete the exam. Therefore, it takes much longer to become a CFA than a CPA.
Four years of relevant experienceare required to obtain the CFA designation. However, your supervisor verifying your experience does not need to be a CFA. This adds a lot of flexibility to the process.
Since parts of the CPA exam can be taken simultaneously, it is possible to complete the exam within a few months. One to two years of experience is required after the exam.
For the CFA, most candidates take four years to complete the three levels, plus four years of relevant experience. Exams and work experience can start at the same time.
CPA vs CFA plaća
CPA salary
Based on 2020 data from Payscale.com, average basesalary for CPAin the US it is $68,090. Eighty percent of all CPA salaries fall in the $49,000 to $114,000 range. The details will depend on the cost of living in your area and the stage of your career. For example, a starting CPA will earn about $54,000, rising to $71,000 in mid-career and reaching about $96,000 in late career.
CFA Salary
For comparison, the average basesalary for CFAis $92,432, with a range of $52,000 to $153,000. However, a CFA's salary takes longer to peak over a career. An entry-level CFA in the US can expect to earn around $77,000, rising to as little as $80,000 mid-career and peaking at $101,000 to $143,000 only after 15-20 years in the industry.
CFA or CPA: Which is more valuable?
On the surface, it seems obvious that CFAs make more money. However, there are still significant differences depending on where you live and what type of CPA or CFA accounting you practice. In other words, every CFA is not guaranteed to make $25,000 more per year than any CPA.
How about a CFAICPA;
Crownshe chooses to be only a CPA, but John is a CPA CFA.
The CFA CPA combination helps the practitioner to be considered as a professional accountant in finance and as a financial professional in accounting. In our case, this powerful combination helped John's career to become the CFO of a private equity firm and later the head of a respected family office.
It took a lot of time and effort for John to complete the two qualifications, but if you start early before family responsibilities pile up, it's actually quite doable. John was able to earn the CPA and CFA designations within five years of graduation.
CFA or CPA: Which is better?
When deciding whether to choose a CPA or CFA, the first and foremost consideration is relevance to your career. Additionally, the CPA has more restrictive education and experience requirements, but once you qualify, the process is much faster. CFA has a lower barrier to entry but takes much longer to complete.
Of course, it also depends on your career goals and personal interests. If you earn a CPA, finances will be a much smaller part of your job. Likewise, a CFA will do less accounting work. However, this does not mean that you cannot be a CFA accountant or a financial CPA. If you have the time and motivation, you can certainly do both.
The paths to the CPA and CFA have their challenges. The most important thing is to choose based on your career aspirations. You can do both!
You know our picks. What is yours?
Will you be Stephanie, getting an accounting degree, or John, going for both? Which one will you start first? Choose one and explore further:
CPA CFA
Frequent questions
Is CFA harder than CPA? Or is CPA more difficult than CFA?
It depends what you mean by "harder". If the difficulty of the CPA versus the CFA is judged solely on the basis of exams, then the CFA is a more difficult qualification to achieve. However, if you count against other requirements such as application and education, especially for non-US applicants, the CPA is more complicated. The relative difficulty of the transition from accountant to financial analyst may depend on more than the barrier to entry.
How does CFA salary compare to CPAs in other countries?
Fortunately, Payscale also collects salary data from other countries.
- CPA vs CFA Salary in India: Indian CPAs earn an average of INR 693,555 per year, while their CFAs earn INR 678,706.
- CPA vs CFA Salary in Canada: When it comes to CFA vs CPA Canada, CPAs earn an average of C$61,843 and CFAs earn an average of C$77,663.
- UK CPA vs CFA Salary: In the UK, CPAs earn an average of £55,552, while CFAs earn £51,561.
As you can see, the pattern of CFA earnings in the US is more true in Canada as well. However, in other countries such as India and the UK, the opposite is true.
Is the CPA exam worth it?
"Value" can be measured in many different ways relative to a CPA versus an accountant. In monetary terms, a CPA will earn about $16,000 more per year than a regular accountant. A late-career CPA can also earn nearly $40,000 more per year than a late-career accountant. In general, CPAs tend to gain more respect, career security, and job satisfaction. So yes, it's usually worth taking the exam.
However, it takes a lot of dedication to study, and that doesn't even take into account the other requirements for obtaining and maintaining a CPA license. I would say that seeking out a CPA is worth it, but accountant vs. CPA is a decision you will have to make for yourself.
How do the CFP and CFA certifications compare?
A CFP, or certified financial planner, is another qualification that financial professionals can look for. To obtain this certification, you must have a four-year degree in any field, complete courses in the financial planning curriculum, pass a standardized multiple-choice exam, and have between 4,000 and 6,000 hours of experience.
Comparing CFA and CFP, CFP works with individual clients who plan personal finances, while CFA works with companies to manage investments. Although both qualifications are for financial professionals and the preparation required for each certification is similar, the knowledge base is slightly different. For example, the CFA exam covers topics such as finance, financial analysis, and corporate finance, while the CFP exam covers topics such as risk management, retirement planning, and estate planning.
A CPA versus a financial advisor is a bit more difficult to compare since they have such different job duties. Ultimately, in terms of expertise and requirements, the CFP is much more similar to the CFA than the CPA.
Where can I find more information about becoming a CPA?
Our sister site, IPasstheCPAExam.com, has tons of informationhow to become a CPA, including an analysis of exam, education and experience requirements.
What is the best school for CPA candidates?
If you haven't started college yet, check out this article about itCPA Pass Rates by School.
What about CMA qualifications?
The CMA is a certificate in management accounting and represents a slightly different career path for an accountant. A CMA earns an average of $91,299 per year, significantly more than a CPA or CFA. There are also advantages to pursuing a CMA after you get your CPA. A CPA CMA combination greatly enhances your resume if you want to practice private or management accounting. This career has its pros and cons, which you can read about on my other page,IPasstheCMA exam.
What about CIA qualifications?
The Certified Internal Auditor certification is another career path to consider. Since so many accountants considerCFA vs. CIA, I devoted an entire post to this topic.
FAQs
CFA vs. CPA: Which Qualification is Best for You? ›
CFA® Program vs. CPA. The certified public accountant (CPA) credential is well established but is primarily associated with careers in accounting. The CFA Program is designed to advance investment careers and provides deep knowledge of investment analysis and portfolio management as well as professional ethics.
Should I get a CFA or a CPA? ›The CPA is great if you want to rise up the finance department at a corporate business and ultimately become the CFO, or if you want to rise up the ranks at a public accounting firm. The CFA credential, by contrast, is great if you want to work at a bank and, in particular, in investment management or equity research.
What pays more CPA or CFA? ›Salaries can vary widely for both CFAs and CPAs based on location, experience level, and company size. That being said, according to Payscale the average salary for a CFA is $102,000 and the average salary for a CPA is $94,000.
Is the CFA harder than the CPA? ›The pass rates for the CFA and CPA exams are similar, but the CFA certification typically takes candidates several years longer to obtain than the CPA certification. In that respect, the CFA certification is typically viewed as harder than the CPA because of the greater time commitment and work experience requirements.
Is a CPA or CFA better for CFO? ›A CFO does not need to have a CPA, CFA, or MBA designation. But of the three, having a CPA designation does help dramatically . I've passed the CPA, and I can say that it is the most important designation to have if you're considering being a startup CFO.
Is CFA harder than the bar? ›The test to become a Chartered Financial Analyst is one of the most challenging credentialing exams. With a pass rate of less than 11% for all three levels, the CFA passage rate is lower than most state bar exams.
Which degree is best for CFA? ›Earn a bachelor's degree
So, if you wish to pursue CFA in the big picture and are struggling to decide which course would be the best for your undergraduate specialization, here are some commerce courses for you to consider: Bachelor of Commerce. Bachelor of Economics (BE) Bachelor of Accounting and Finance (BAF)
The demand for such personnel is high in the United States due to the presence of leading financial conglomerates that the fact that the US stock markets affect the world economy like nothing else does.
Can a CPA be a millionaire? ›The average yearly salary for an accountant is somewhere between $100,000 and $120,000. That's more than enough for you to live a good life! But as mentioned previously may take several decades to accumulate a million dollars or have the capital to invest in other physical assets.
Which is more valuable CPA or MBA? ›Which is Better for Me – a CPA or MBA? Deciding which is better for you comes down to personal preference. Those leaning toward accounting or finance may find a CPA credential a valuable asset for their career. If your plan is to move into an executive or leadership position, an MBA may be a good choice.
How long does it take to study CFA vs CPA? ›
...
CFA vs CPA Exam difficulty: side-by-side.
- Financial Statement Analysis - The most challenging aspect of Financial Reporting and Analysis is likely not the content itself but rather the abundance of information. ...
- Fixed Income- Many readings in FSA are purely theory-based and are filled with terms.
Many CFA charterholders consider the Level 3 CFA Exam the most difficult because of the time and thought needed to answer the constructed responses successfully. While the typical Level 3 CFA Exam pass rates are the highest of the CFA Exams, only around 56% of CFA candidates pass the exam.
What is harder CPA or CFA reddit? ›The CFA takes on average 4-5 years and >1,000 hours of study vs. the CPA taking, on average, 6-12 months and 300-400 hours of study. A CFA candidate has an approximate 5-6% probability of becoming a charterholder whereas a CPA candidate has ~70% probability.
What percentage of CFOs have a CPA? ›44% of CFOs are CPAs; MBAs make up 60.5% of the CFO population (10.4% are both CPAs and MBAs).
Do most CFOs have CFA? ›CFO qualifications
A CFO does not need to necessarily have an academic qualification of Certified Public Accountant (CPA), Chartered Financial Analyst (CFA), or MBA. But out of these, having a CPA degree does benefit considerably.
Quantitative Methods
D. in mathematics is not necessary to do well in quantitative methods, but having a background in statistics will certainly be helpful. An 8%-to-12% weight means that candidates should expect anywhere from 15 to 22 questions on quantitative methods.
According to the Wall Street Journal, the CFA exam is the most difficult exam in the world, with less than 1/5th of candidates clearing it, after repeated attempts, on a yearly basis.
What's the hardest professional exam? ›- Civil Services Exam (CSE)
- GATE.
- GRE.
- Master Sommelier Diploma Exam.
- ICAI CA Exams.
- CCIE (Cisco Certified Internetwork Expert)
- Mensa International.
- CFA.
| Top Employers of Chartered Financial Analysts in India | |
|---|---|
| Recruiters | Salary Package (in Rs lakh per annum) |
| JP Morgan and Co | 3.08 to 20 |
| The Goldman Sachs Group Inc. | 2.06 to 40 |
| HSBC | 5.24 to 30 |
Is CFA respected in USA? ›
The CFA charter is one of the most respected designations in finance and is widely considered to be the gold standard in the field of investment analysis.
Which CFA has highest salary? ›CFA Level 1 candidates on average earn ₹9.8 lakh. CFA Level 2 candidates earn ₹13.5 lakh, Level 3 candidates earn 17.5 lakhs and Level 3 cleared - charter pending candidates earn 20.7 lakh on average. Charterholders earn 44.4 lakh.
What is CFA Level 1 expected salary in USA? ›While ZipRecruiter is seeing annual salaries as high as $96,500 and as low as $19,500, the majority of Cfa Level 1 salaries currently range between $31,500 (25th percentile) to $52,000 (75th percentile) with top earners (90th percentile) making $74,000 annually across the United States.
What is the monthly salary of CFA in USA? ›| Job Title | Annual Salary | Monthly Pay |
|---|---|---|
| Cfa Society | $118,707 | $9,892 |
| Cfa Python | $116,847 | $9,737 |
| Cfa Private Equity | $106,111 | $8,842 |
| Contract Cfa | $105,621 | $8,801 |
The average salary range for CFA Level 3 is 67,786 USD to 217,242 USD. The average salary range for CFA Level 3 is 67,786 USD to 217,242 USD.
What is a CPA top salary? ›Highest-paying positions for accountants
Licensed CPAs can pursue various career paths. Executives and directors in top-tier accounting positions can earn upward of $200,000 annually, more than four times the average starting salary for a general accountant.
Experienced CPAs can earn in the mid- to high six figures, especially if they end up in a management or leadership position.
Can you make 200K as a CPA? ›You can make 200K if you enter Big 4 and stay ~10 years until you become a very experienced Sr. Manager. To make 400K you'd need to spend 15 to 20 years in Big 4 and become a partner, which is hard to do.
Should I do CPA or master's? ›Getting a CPA License is a Must in Certain Industries
For most industries, getting a master's degree is not a must. However, you need a CPA license to move beyond the manager level in any reputable CPA firm. A CPA license also becomes almost necessary once you move to senior finance positions in big companies.
Yes, you should put CPA after your name on a resume.
However, adding CPA after your name on a resume indicates that you're letting the hiring manager know immediately that you're a qualified candidate.
Is CPA better than Masters? ›
While a CPA shows mastery in foundational accounting skills, a master's degree shows you're driven to gain new skills that will directly benefit an organization.
How much does CFA cost? ›You'll pay multiple fees to take the CFA exam. The one-time enrollment fee is $350. The standard registration fee for each level of the exam is $1,200.
How quickly can you do CFA? ›How long does the CFA® Program take to complete? With Level I exams in June and December and Level II and III exams in June, it is possible to complete the CFA Program in two years. However, with a recommended study time of 300 hours per exam level, it takes most people three to four years to complete the full program.
Does CFA get harder? ›Differences Between CFA Level I, II, and III Exams
The CFA Program consists of three levels: a Level I exam, a Level II exam, and a Level III exam. The tests have been described as becoming progressively more difficult, and all three level exams challenge one's expertise in finance.
The CFA Institute reports that historical pass rates for Level I and Level II of the exams are typically between 40% and 50% with Level III having a slightly higher pass rate.
What is the easiest topic in CFA? ›Corporate Finance is one of the easiest topics of the Level one exam this is because this subject is very logical and intuitive and the formulas are easy. The scope is also quite limited and includes concepts related to NPV, IRR, corporate governance and capital management.
Are CFA Level 1 questions difficult? ›Level I of the CFA Program usually has the lowest pass rate which could imply it's the most difficult exam in the program. However, this will not apply to every candidate because each person has different strengths and weaknesses.
What percentage of people pass the CFA exam? ›Level I, II and III pass rates equaled 36%, 44%, and 48%, respectively. Since the CFA began administering the program in 1963, Level I, II, and III pass rates have averaged 41%, 46%, and 56%, respectively, with a total of 2.1 million, 963,594, and 543,322 separate exams taken at those respective levels.
What is the lowest score to pass CFA Level 1? ›Passing Scores
Candidates must get a minimum passing score (MPS) of 70% on the multiple-choice questions on the CFA Level I exam, a minimum score of 65% to 70% on the multiple-choice questions on the CFA Level II exam, and a minimum passing score (MPS) of 60% on the multiple-choice questions on the CFA Level III exam.
CFA Level I Pass Rate Ticks Up to 38%
The CFA designation can lead to higher salaries and better job opportunities. A typical charterholder, of which there are more than 190,000 globally, took four years to complete all three levels.
What is harder than the CPA? ›
Keep in mind, the Bar exam has much more difficult requirements to even sit for the exam—you need to go to law school, which is quite a commitment, both financially and in terms of time. While the CPA requires accounting experience and coursework, there's a lower bar for entry for this test.
Which is the toughest exam in CPA? ›- AUD is the section that will cover all auditing and assurance public accounting services. ...
- BEC is a comprehensive analysis of the environment that businesses operate in. ...
- FAR is often considered the most difficult section.
BEC has the highest pass rate and is considered the easiest CPA exam section.
How many Fortune 500 CEOs are CPAs? ›Many of you are CPAs. Yet when you look at the ranks of Fortune 500 chief financial officers, only a minority—27%—have public accounting backgrounds. Meanwhile, the skills and talents that CEOs and boards are looking for in a CFO are changing.
Is being a CPA stressful? ›It can be a stressful job
As an accountant is responsible for a person's or company's finances, it can be stressful to handle all this sensitive and confidential information. Also, identifying minor discrepancies that can affect coworkers' jobs, can generate stress and anxiety.
The two roles are very different, but they are not mutually exclusive. You don't need to be a Certified Public Accountant (CPA) to be an effective Chief Financial Officer (CFO), nor do all CPAs need to aspire to managing corporate finances.
Is a CPA better than a CFA for a CFO? ›A CFA generally analyzes financial reports, notably financial statements, while a CPA is most often the one that puts together or audits those reports. CFAs are best known for investment analysis and wealth planning, and CPAs tend to be associated with taxes, audits, and accounting.
Where is CFA most demanded? ›That said, CFA is increasingly preferred and required in the investment management sector, especially when seniority increases. As you'll see further below, the CFA designation is valued not just in the investment management sector, but well recognized in the broader financial services industry globally.
Is a CPA actually worth it? ›It's no secret. Passing the CPA exam all but guarantees that if you play your cards right you will make well over $1 million dollars more during your entire career than if you never passed the CPA exam. Imagine what you could do with an extra million dollars!
Is a CFA respected? ›The CFA charter is one of the most respected designations in finance and is widely considered to be the gold standard in the field of investment analysis. To become a charter holder, candidates must pass three difficult exams, have a bachelors degree, and have at least four years of relevant professional experience.
Is having a CPA prestigious? ›
It's a highly respected title
Once they pass the CPA exam, they are required to perform a series of on-the-job training before they receive their official title as CPA. The process of becoming licensed typically spans several years, and individuals who obtain their license are highly regarded for that reason.
There are many roles in corporate finance that a CFA helps prepare a candidate for, including research analysts, equity analysts, portfolio managers, chief financial officers, and corporate financial analysts.
What is the disadvantage of being a CPA? ›Stress Difficulties of Being an Accountant
Job responsibilities, demands from clients and regulations can all make being a CPA stressful. While tax season is notorious for having a heavy workload to do under a time crunch, you can find yourself balancing tasks and multiple clients on a daily basis.
For many people, the answer is a resounding yes. The CPA credential comes with many perks, including higher earnings potential, greater job security, and more opportunities for career advancement. And while the exam is challenging, it's not impossible to pass.
Can CPAs get rich? ›However, according to the Accounting Institute for Success, top-level CPAs can earn upwards of $150,000. 13 And the experience and education it takes to become a CPA can lead to other job opportunities, like becoming a company comptroller or certified financial officer.
Is CFA extremely difficult? ›Overall, the CFA exams are very difficult, but candidates can increase their chances of passing by studying for over 300 hours, utilizing alternative prep materials, answering as many practice questions as possible, and creating a structured study plan.
Is CFA worth it in USA? ›If you're aiming to work in roles such as financial analysts, portfolio managers, or investment bankers, the CFA designation can be a valuable asset. However, if you want to pursue careers in other areas of finance, an alternative certification or qualification may be more relevant.
Is a CPA harder than a Masters? ›CPA is harder. It requires passing an exam that covers a range of topics in accounting and finance. An MBA can be harder depending on the program, but usually entails completing coursework in areas such as marketing, management, and financial analysis.
Are CPAs declining? ›More than 300,000 U.S. accountants and auditors have left their jobs in the past two years, a 17% decline, and the dwindling number of college students coming into the field can't fill the gap.
What is the highest income for a CPA? ›Highest-paying positions for accountants
Licensed CPAs can pursue various career paths. Executives and directors in top-tier accounting positions can earn upward of $200,000 annually, more than four times the average starting salary for a general accountant.
Who is CFA suitable for? ›
The CFA designation is given to investment professionals who have successfully completed the requirements set by the globally recognized CFA Institute, formerly the Association for Investment Management and Research (AIMR).
Who benefits from CFA? ›Widely considered the apex for professional development in investment management, the CFA designation is valued by employers for roles and functions in every sector of the global finance industry, including portfolio management, analysis, private wealth, and consulting.