CPA vs CFA®

In this article we compare and contrast the pros and cons of doing a CPA versus a CFA.

CPA vs CFA, which one is better for me?

When considering a career in corporate finance or the capital markets you will often hear people asking, “should I get a CPA or CFA?” and “which is better?”.  In this article, we will outline the similarities and differences of the CPA vs CFA designations and try to steer you in the right direction about which is the right fit for you. One is not better than the other, it just comes down to your objectives.

 

CPA vs CFA designation

 

What is the Certified Public Accountant (CPA) designation?

Certified Public Accountant (CPA) is the designation of legally qualified accountants in many countries around the world. In the US the designation is administered by the Uniform Certified Public Accountant Examination and requires additional education and work experience in order to obtain the designation.

In countries outside the U.S. the accounting designations of an equivalent standard include Chartered Accountant (CA), Chartered Certified Accountant (ACCA), Chartered Professional Accountant (CPA), Certified Public Accountant (CPA), Certified Practicing Accountant (CPA), and Certified Management Accountant (CMA).

 

What are the most common CPA career paths?

The most common career paths for CPA include:

  • Public Accounting (audit, tax, advisory, valuation)
  • Corporate Accounting (accounting, reporting, finance, treasury)
  • Government / Academics / Non-Profit

CPAs have many career paths available to them. Within the first category, public accounting, there are many different types and sizes of firms, which a variety of different client types. Within the firm, there are also many options such as audit, tax and advisory or consulting. On the business and industry side, there are also a wide range of companies and options within them such as financial accounting and reporting, financial planning and analysis, management accounting, treasury or cash management, and corporate development.

Given that at CFI we are focused on corporate finance we focus on more of the top career paths for CPAs within corporate accounting.  Below is an example career path for CPA on the corporate side:

  • Staff Accounting (1-3 years)
  • Senior Accounting (3-6 years)
  • Accounting Manager (6+ years)
  • Assistant Controller (8+ years)
  • Controller (10+ years)
  • Chief Financial Officer (CFO) (12+ years)

 

What is the Chartered Financial Analyst® (CFA®) designation?

The Chartered Financial Analyst® designation is offered internationally by the CFA Institute and focuses on financial analysis with a heavy component of portfolio management. In order to obtain the designation, a candidate must pass all three levels and meet career experience requirements.  As of June 2016, there were approximately 132,000 charterholders globally.

 

What are the most common career paths for charterholders?

According to the CFA Society, the top employers of charterholders are UBS, JP Morgan, Citigroup, Morgan Stanley, BlackRock, HSBC, Credit Suisse, BoAML, Barclays and Deutsche Bank.  The most common paths for charterholders include:

  • Investment management
  • Equity research
  • Corporate finance
  • Risk management
  • Investment banking
  • Sales and trading

The program focuses on investment management so it’s no surprise to see that as the top career path on the list above.  From there it branches out into a wide range of corporate finance roles, mostly on the banking side.  The top employers are mostly banks, and the charterholders fit into a wide range of roles within them. Here is a breakdown of typical compensation for a charterholder.

 

Which designation is right for me?

It’s entirely subjective.  Both offer excellent career paths, so it’s important to know which one is a better fit for you.  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.  Both offer good opportunities for people looking to break into corporate finance.

 

Compare more designations

Below is a summary table for helpful reference to easily compare several career paths for financial analysts.

 

 CFA®CPA®CAIA®CFP®FRM®FMVA™
Number of Levels312221
Costs$4,000 to $5,000$1,000 to $3,000$3,000$2,000$1,500$497
Exam Pass Rate30-50%40-50%70%67%40-50%70%
Content FocusPortfolio Management, InvestmentsFinancial Reporting, AuditReal Assets, Alternative InvestmentsFinancial PlanningFinancial Risk ManagementFinancial Modeling, Valuation
Career ApplicationAll EncompassingAccounting and FinanceAsset ManagementRetail and Wealth ManagementRisk ManagementAll Encompassing
Study Time (hrs)300 - 350 per examVaries200 per examVaries200 - 300 per exam100 - 200 total
Completion Time3-5 years2.5 - 51-2 years4 years<1 year<1 year
Work Experience4 years1 year1 year3 years2 yearsn/a

 

Additional resources

Thanks for reading CFI’s guide on the CPA vs CFA credential.  To keep learning and advancing your career, check out these additional resources:

FMVA certification program

Advance your career in investment banking, private equity, FP&A, treasury, corporate development and other areas of corporate finance.

Get certified as a financial analyst with CFI’s FMVA Program.