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CPA vs. CFA® Designation

By: Kaplan Schweser
July 19, 2022
CFA designation vs CPA designation

Becoming either a CFA (Chartered Financial Analyst) charterholder or a CPA (Certified Public Accountant) is a big step in your career. Both designations are impressive additions to your resume and great career boosters. If you’re considering acquiring one of these certifications, it’s important to understand the differences between the two. Although they’re both related to finance, they can take your career in very different directions.

TABLE OF CONTENTS:

CFA Charterholder vs. CPA: What Is the Difference?

CFA charterholders and CPAs both work with financial records, consult with clients, and assess the viability of different businesses and organizations; however, the outcome of these tasks is different depending on which credential you hold. CFA charterholders focus on understanding market conditions, assessing businesses, and determining the best way for businesses or individual clients to invest their money. They use investments to produce revenue for their clients, and some charterholders buy or sell securities, funds, and more on behalf of their clients. CFA charterholders are likely to be investment analysts, financial advisors, and portfolio managers, Some even go on to become chief financial officers (CFOs).

By contrast, CPAs produce financial records. They may calculate taxes owed or assess business practices to identify ways to save money. They must also ensure that applicable financial regulations are followed. Some CPAs use their accounting skills to identify evidence of fraud or other crimes. 

Is Becoming a CPA Worth It?

If becoming a CPA appeals to you, you’ll need to weigh the pros and cons of preparing for and taking the CPA exam.

Pros of Becoming a CPA

  • Potential salary increases will make up for the cost of preparing for and taking the exam itself. 
  • Preparing for the exam will teach you skills and knowledge that will help you become a better accountant.
  • Becoming a CPA signals that you’re dedicated to your profession, which can give you more opportunities and flexibility in your career.

Cons of Becoming a CPA

  • It’s expensive. The cost of the CPA exam itself varies by state, but expect to spend around $1,000 for registration and testing fees, plus several thousand dollars for a review course (which we highly recommend). Some firms reimburse their employees for CPA exam-related costs, so check with your employer to see if you qualify. 
  • It takes lots of time. It’s recommended that you spend 300–400 hours preparing for the CPA exam, in addition to the time it takes to actually take the test (~16 hours total). 
Keep in mind that while the monetary and time expenses you’ll inevitably need to invest in order to become a CPA may seem daunting, becoming a CPA will allow you more job opportunities and financial stability. 

CPA vs CFA Curriculum Differences

Unlike the CFA exam, which focuses on investment tools, valuing assets, and portfolio management and wealth planning, the CPA exam is designed to test your knowledge of auditing procedures and standards, taxation, and accounting and reporting standards for a variety of organizations. 

CPA Exam Topics

The CPA exam is divided into four testlets, each approximately 4 hours long. You must pass all four testlets within an 18-month period in order to become a CPA. The four testlets are as follows:

  • Auditing and Attestation (AUD)
  • Business Environment and Concepts (BEC)
  • Financial Accounting and Reporting (FAR)
  • Regulation (REG)

You’ll be tested on the following topics on the CPA exam:

  • Auditing procedures and professional auditing standards
  • Standards related to attest, assurance, accounting, and review engagements
  • Corporate governance
  • Economics
  • Information technology
  • Financial management, strategic planning, and operations management
  • Accounting and reporting standards applicable to not-for-profit organizations and government entities
  • Federal taxation, ethics, professional and legal responsibilities, and business law

CFA Exam Topics

The CFA Program curriculum will test candidates' knowledge in 10 topic areas:

  • Ethical and Professional Standards
  • Quantitative Methods
  • Economics
  • Financial Statement Analysis
  • Corporate Issuers
  • Equity Investments
  • Fixed Income
  • Derivatives
  • Alternative Investments
  • Portfolio Management and Wealth Planning

CFA Exams Explained >>

CPA vs CFA Career Paths

The major difference between a CPA and CFA career path is the industry they work in. Typically CFA charterholders work in the investment management industry whereas you may find CPAs in multiple industries. 

CPA Career Paths

There are many directions you can take in your career after becoming a CPA. Deciding the industry in which you’d like to work is the first decision you’ll need to make. Your options include: 

  • Public accounting: Public accounting firms provide a variety of clients with accounting services, such as financial planning, bookkeeping, and audit preparation. It’s common to work in public accounting for a few years before transitioning to private accounting or another more specialized type of accounting.
  • Government accounting: Government accountants perform audits, assess the efficiency and effectiveness of various government units, oversee public funds, and investigate white-collar crime for the FBI.
  • Private accounting: Private accountants work for a single company’s internal accounting department. They manage the company’s financial records, prepare financial reports, and assess the company’s fiscal performance.
  • Nonprofit accounting: Nonprofit organizations require accountants who can complete specialized tasks. These include evaluating donor-restricted assets, which can only be used for specific purposes, accounting for different types of services and programs, and fundraising.
  • Academia: Accounting professors not only teach students about accounting and research accounting theory, but they often also serve as accounting consultants to companies, firms, and in legal proceedings.

CFA Career Paths

There are multiple directions CFA charterholders can take after earning the CFA designation, including using it to advance their current career or look for a new career as a:

  • Financial Analyst
  • Risk Analyst
  • Ratings Analyst
  • Portfolio Manager
  • C-Level Executive

Financial Analyst Career Paths >>

CFA Charterholder vs. CPA Salary

Salaries can vary widely for both CFAs and CPAs based on location, experience level, and company size. That being said, the average salary for both CFAs and CPAs is significantly higher than that of financial professionals and accountants without these certifications.

CFA Charterholder Salary

According to Payscale, CFA charterholders in the United States can earn anywhere from $60,000 to well over $200,000 annually. Payscale also estimates the average CFA charterholder salary to be $92,947 a year. The broad range is a reflection of all you can do with the charter. Bonuses and years of experience make a difference, too.

Here are the average salaries of some of the most common positions for CFA charterholders:

  • Research analyst: CFA charterholders who are research analysts earn, on average, $77,000 a year, according to Payscale.
  • Financial advisor: Financial advisors with the CFA charter earn an average salary of $83,000 annually.
  • Investment analyst: Investment analysts with the CFA charter earn an average salary of $78,000 annually.
  • Portfolio manager: The average salary for a portfolio manager with the CFA charter is $102,000.
  • C-level executive: Payscale says that chief financial officers with CFA charters have a median annual base salary of $173,000.

Considering the CFA charter? Before you choose your CFA exam date, download this free, Before You Decide to Sit for the CFA Exam, eBook.

CPA Salary

Payscale says the average salary for CPAs is $86,979. At a minimum, CPAs have completed certification requirements after earning a bachelor’s degree in accounting and are qualified for better positions than regular accountants. If a CPA has a master’s degree, the median annual income increases to $91,000, according to accounting.com.

Here are the average salaries for some of the most common positions for CPAs:

  • Accountant and auditor: Accountants and auditors who are CPAs earn a median annual salary of $69,000.
  • Financial controller: Financial controllers oversee and direct a company’s accounting functions. The average annual salary for CPAs in this position is $98,000.
  • Corporate controller: CPAs in the executive role of the corporate controller can expect an average salary of $114,000 a year.
  • Chief Financial Officer: The average annual salary for CPAs who are CFOs is $151,000.

CFA vs. CPA Difficulty

Acquiring either the CFA charter or CPA certification is a long process that requires a degree, several years of experience (in most states), and a passing score on a long, difficult exam. This table breaks down the requirements to become a CFA and CPA: 

 

 CFACPA
EducationBachelor’s degreeBachelor’s degree; 150 hours of pre-licensure education (inclusive of Bachelor’s degree)
Experience4 years of professional experience2 years professional experience (in most states)
ExamPass Levels I, II, and III of CFA ExamPass all four CPA exam portions: AUD, BEC, FAR, and REG within 18 months

 

Pass rates for both the CFA and CPA exams are updated with each testing administration. Learn more about CFA exam pass rates and CPA exam pass rates.  

Which credential is more difficult to acquire depends on your individual circumstances and strengths. Make your decision based on which will help your career progress the most, not on which you believe will be easier to obtain. In the long run, the hard work will pay off no matter which certification you choose. 

 

CFA vs. CPA Infographic

CFA vs CPA Designation Infographic

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