The names of the CFA and CPA can not be contrasted from apple to apple as they are qualifications in two separate sub-sectors.
CPA is suitable for accounting, and CFA is suitable for finance. CPA is the accounting "black-belt." It was initially designated for public accountants, but non-public accountants, tax accountants, and financial practitioners chose the designation of CPA to show their expertise. Furthermore, it has contractual privileges for the CPA holder to sign an audit report making the title unique.
CFA, on the opposite, is the financial and investment gold standard. This is the perfect title for those pursuing a career as investment analysts, fund managers, and specialists in asset management or hedge fund firms.
Perhaps the best-known titles in their respective fields are Certified Public Accountant (CPA) or Chartered Fund Analyst (CFA). CPA has allowed the holder of the CPA licence to sign the audit report, which gives this title its unique character. The gold standard for financing and expenditure, on the other hand, is the CFA. This is the best title for those pursuing careers as professionals in asset management or hedge funds houses, or as stock analysts or fund managers.
Difference Between CFA and CPA
CFA is an investment and finance specialist certification offered by the CFA Institute. The CFA is worldwide recognised and equates with a degree in finance with minors in economics, accounting, statistical analysis or portfolio administration. The CFA is an exceptional option for anyone interested in a career as a shareholder analyst, investment manager, asset management, or hedge fund manager.
CPA, on the other hand, is the designation kept by U.S. accounts that have completed a Standardized Certified Public Accountant Test and satisfied additional criteria for state education and experience.
Initially a public accountant designation, the CPA is also of major significance to non-state accountants, tax accountants and practitioners from finance. CPA also has regulatory powers and additional professional and ethical obligations to sign such tax formats and audit reports. The various functions that a CPA can perform control the laws of each state.
In addition to passing tests, the applicants must satisfy certain educational requirements; however, you must also have 4 years of eligible investment experience in order to become a CFA with full potential. So between CPA and CFA, it is very difficult to say which is better cpa or cfa.
CFA Exam Vs CPA Exam
The CPA Exam consists of four sections. The test is universal in the United States which ensures that in every state, the content and structure are the same.
The CPA test can be scheduled on particular windows. There are four periods in the year: Jan / Feb, Apr / May, Jul / Aug, Oct / Nov, each of them being two months long with four windows. Since 2012, each variable and content is the following:
- Concepts and the business climate
- Accounting and monitoring financial services
- Examination and certificate
- Regulation: REG is also known
Test pass rates are usually 50% or slightly lower, and the examination is only available in English. For the four sections of the CPA examination in 2014, the average pass rate was 46.35%, 55.46%, 47.60%, and 49.41%.
The fully computerised analysis consists of multiple-choice questions, simulations focused on tasks (case studies), and written communications. The CPA exam can also be attended by applicants outside Japan, Brazil, and four countries in the Middle East. So here comes a big question that, is CFA difficult as compared to CPA.
The CFA format is far less flexible than the CPA examination. The examination must be carried out in a sequential manner at three levels, and it is recommended by the CFA institute that candidates begin studying for every of the three examination levels at least six months (at least 300 hours of study).
Only on certain dates is the CFA examination offered. This exam can not be arranged at your convenience, as candidates worldwide take the test on the same day. Twice a year, in June and December, the CFATM level I is offered, and only once and annually in June, is the CFATM level II and III exams. Compared to the CPA exam, the CFA is not a computer-based, pencil, and paper examination.
The test level I was passed by 43% (June), the level II examination passed by 46% (June), and the level III examination by 54% (June).
Exam Content and Format of CPA and CFA Exam
There are four review sections: Financial Accounting, Audit and Qualification, Legislation, and the Environment & Principles of the company.
The test consists of 100% computerised questions, job-based simulations (cases, and written communications). The test consists of several choices. The grading of the CPA Exam is usually computerised.
You can take all four pieces one by one, 2 by one, or even 4 simultaneously. You can take the CPA test at any time, the first 2 months per quarter and at Prometric centres in the United States. The exam can take place at any time. In Brazil, Japan, and 4 Middle Eastern countries, there are also research centers.
For CFA, the examination format is considerably less flexible. There are 3 exam levels, and one is required to progress to the next. Instead of accounting, auditing, and taxation, the exam material concentrates on financial reporting and portfolio management.
The analysis is done in the conventional paper and pencil format. The exam is conducted at levels 1 twice a year and at levels 2 and 3 once a year.
In major cities and metropolitan areas there are several international CFA testing centres.
Application and Qualification for CPA and CFA Exam
Each of the 55 States in the United States shall issue the CPA certificate. There is no central administration, and every state's CPA examination and licensing provision is slightly different.
Of all financial credentials, CPA criteria are most difficult to meet. At least 4 years of bachelor's degree must be required, and 150 hours of credit (equivalent to 5 years of higher education) should be permitted to attend the exam in most cases.
It is a challenge to non-US applicants to take the exam because of the high barrier of entry and the complicated application process.
CFA is a global non-profit organisation granted by the CFA Institute. The Institute is located in the United States, but there are three regional offices and 200 local chapters worldwide. The candidate's application is relatively easy via the Institute.
If the applicant has a bachelor's degree or a professional experience of almost 4 years, he/she will take the exam. Until graduation, the applicant may also take the test.
For CFA or CPA How Much Time is Required to Become Qualified
In one year, most applicants can complete the CPA test. Some people can review all the materials in 6 months, take all four sections of the test in one go, and pass.
The majority of the state boards require 1 year's accountability experience before obtaining the licence, which is supervised and verified by a US CPA for most States.
While theoretically, applicants can finish the CFO examination in a matter of 18 months, most candidates take four years to complete the examination, (Level 1 in December, Level 2 in June, and Level 3 in June of this year). It takes a lot more time than a CPA to become a CFA.
A CFA classification requires 4 years of applicable experience. Your boss would not have to be CFA if he or she verifies your knowledge. This makes the process even more versatile.
Salary of CFA Vs Salary of CPA
CPAs earn between $40,000 or more, or between $120,000 or more. CFA salaries usually vary from $70,000 to $150,000 or more.
Overall, for those who are interested in a career in finance or accounting, the CPA is the more well known, secure, and conventional course. Instead, for careers as financial advisors, investment banking analysts, portfolio managers, private bankers, research analysts, and traders, the CFA is probably the best choice.
You should decide what concerns you most about funding and whether you're a risk-taker or more conservative when choosing a career path. It takes an average of 4 years for the applicant to pass all three stages and receive the qualifications. The CFA has a slightly lower entrance barrier but takes much longer to achieve it. An experienced CPA is a more versatile procedure that can be completed within a slightly shorter time frame. Both certifications are important and valuable if you intend an excellent career in the financial sector.
When you finally decide to be a CFA, you must plan for it as best you can. One of the first steps in your training is to pick a test preparation for performance!
The first and the most important factor for your future when determining if you are going to CFA or CPA. In addition, the CPA has a more stringent preparation and experience prerequisite, but the process is much quicker if you apply. CFA has a lower barrier to entry, but it takes considerably more time.d