By Carol Wiley, Accountingedu contributing writer
Updated April 2013
A Certified Public Accountant (CPA) is an accountant who has met state licensing requirements. CPAs provide accounting services, ranging from preparing financial statements for large corporations to preparing taxes for individuals.
A Chartered Financial Analyst (CFA) is a financial analyst who has completed the CFA program through the CFA Institute. Financial analysts analyze investment options and provide investment information to financial planners and their clients and to upper management of investment companies. It is important to note that a CFA is different from a CFP (Certified Financial Planner), who works directly with individual investors.
With the CFA and CPA being among the most respected credentials in the world of business and finance, and given that both require the completion of a rigorous credentialing process, many are left to ponder: Which one is best suited to their particular career goals. While this is by no means an easy decision, there are a number of factors that when weighed heavily and considered thoroughly can help lead a thoughtful CFA or CPA candidate to the right decision.
Firstly – if an accounting and finance professional is interested in establishing a private practice accounting firm to serve the small-to-medium sized businesses in their community, or would like to join a CPA firm partnership already established in their neighborhood, the clear choice would be to pursue the highly lauded CPA credential.
In all likelihood, anybody who is really perplexed as to which credential to pursue has their mind set on a career in financial consultancy or business finance, where both credentials are revered for their unique strengths. The question of whether to pursue a CFA vs. CPA is much more challenging in these instances.
For practicing accountants and financial professionals, the decision is often ultimately determined by the preference of the employer. Accountants working for a major accounting firm will likely find themselves prompted to pursue one or the other based on the needs of the organization.
For those looking to start their careers by selecting the most sought after of the two credentials are left to arrive at their own conclusion as to which is best suited to their personal career aspirations. Most business leaders, hiring managers, and executives would be quick to remind up-and-coming talent that it is not the right credential that gets the job, it is the person who has the skills to get the job done that gets the job.
Licensing requirements to become a CPA vary by state, however, as most states move towards full integration of he the Uniform Accountancy Act, requirements are generally quite similar from state to state:
CPAs must be licensed in every state in wish they wish to practice.
CPAs can choose from a diverse number of career paths including:
CPAs may also provide services related to valuation and forensics, such as fraud prevention, detection and investigation.
The self-study CFA program is a graduate-level program that teaches skills needed to analyze investments and make appropriate investment decisions. Acceptance into the program has minimum education/experience requirements, and most people take about four years to complete the program. Program requirements include passing three six-hour exams:
The CFA is a globally recognized credential, and according the CFA Institute, more than 90,000 CFA charterholders work in over 135 countries in the following positions (percentages represent percent of CFAs holding that position as of August 2011):