CPA vs. CFA
Commonly, the problem people have is how to look for money. Although, when they already have enough money, they develop a new problem of how to use all the money. In this regard, this is where analysts and financial experts come in handy. Surfing the web, or listening to talk shows, won’t give you sufficient theories on how to manage your money. What you need is CPAs and CFAs, but how do these experts differ?
A CPA is known as a Certified Public Accountant. CPAs are the experts to whom you will turn for your tax concerns. Even if it is not always required for one to employ a CPA just to audit taxes, they are nevertheless the most knowledgeable persons on this subject.
Some CPAs also happen to master many fields of finance, auditing and accounting, which include: Corporate finance & governance, financial accounting, analysis & planning, income tax and tax preparation, assurances, and information technology (IT), amongst others. However, many of them tend to focus on only one craft, rather than becoming generalists of the many fields mentioned.
To become a CPA, you must first pass the CPA exam. In the U.S., this test is called the Uniform Certified Public Accountant Examination (UCPAE). Not only that, this license can also only be given to a person who already has the right education and experience. However, other specific requirements and CPA functions vary per state.
On the contrary, a CFA is a Chartered Financial Analyst. Unlike CPAs, they tend to delve more into finance by examining the flow of money, and assessing stocks and the overall market. Most of these experts are master degree holders, and have one or more expertise in the following: Economics, statistics, management and accounting itself.
The road to becoming a CFA is also not that easy. Unlike the CPAs, CFAs are obliged to take and pass three separate exams that are each 6 hours long. These exams are seen to have higher passing rates as the level of examination progresses. Hence, the third exam almost always displays the highest passing rate overall, based on the trend analysis for the past 5 years in the U.S. Not only that, CFA wannabees also need to undergo a special training, or experience in certain investment fields that requires decision making.
Basically, the two differ from each other because:
1. A CFA is focused more on financial aspects, while a CPA is more of an accounting position.
2. A person who wants to become a CFA needs to pass three separate exams, whereas someone who wants to become a CPA needs to pass four parts of CPA exam.