Anyone interested in numbers and finances as a career in accounting, will come across many different fields while they search for a specialization. Such fields include EAs, CMAs, Bookkeepers, and CAs. In this article, we will briefly discuss the differences between the CPA certification and the CFA certification. We hope that you find this helpful!
What is a CPA?
A Certified Public Accountant (CPA) is someone who has passed the NASBA Uniform CPA exam in one of the US states and jurisdictions and subsequently received licensure to practice public accountancy in that locality. The license itself is issued by the American Institute of Certified Public Accountants (AICPA.) Although the prerequisites differ from state to state, there are certain basic requirements for licensure, such as receiving at least 75% for each section of the CPA exam within an 18-month window, meeting the 150 College Credit requirement and fulfilling some sort of work experience requirement.
Read more: What is a CPA?
What is a CFA?
A Chartered Financial Analyst (CFA) is a globally recognized certification that is issued by the CFA Institute. As it sounds, a CFA certification is more focused on the finances and investments than accountancy and they cannot work in public accountancy. They can either be self-employed working for individual clients or as part of an organization or firm. They will analyze their clients’ finances to advise them on investment strategy and money management. They will help to manage their clients’ portfolios and to help analyses and manage their investment risks. The exams are considered far more intensive than those of the CPA.
To qualify for Level II of the CFA exam you will require to be within 11 months of completing your bachelor’s degree or equivalent program. You will also require 4,000 hours of work and/or higher education that is acquired over a minimum of three sequential years. This experience does not need to be investment related but should be relevant. The full requirements can be found here.
How else does a CPA differ from a CFA?
|4-part exam||3-part exam|
|US licensure||Global certification, with the exception of Cuba, North Korea, Syria, Crimea in the Ukraine. Iranians must enroll with a special license|
|Available in English||Available in English|
|Requirements vary from state to state||Each Level of the Exam has its own curriculum. Level II and Level III can also only be taken once the previous level has been passed|
|Broader topics||Focused specialty|
|Exam available in 15 countries||Exam available in 400 centers in over 100 countries|
|Each exam part takes 4 hours (240 minutes)||Each exam is 270 minutes long, with an optional 30-minute break halfway through|
|As of November 2021, there were 696,000 CPAs globally. 669,130 of these were based in the US||As of October 2021, there were over 178,000 active CFAs globally, according to the CFA Institute’s website|
|The exam parts have a 46.37% – 61.76% pass rate (75% requirement to pass)||The exams have a 27% – 46% pass rate as of November 2021|
|The average exam cost is $4,400 (varies per state)||There is an early registration fee of $700.00 per section and a regular fee of $1,000.00 per section|
|Average annual salary of $72,149.00||Average annual salary of $67,500.00|
|Exams available throughout the year||Level I in February, May, August, and November Level II in February, August, and November Level III in May and August|
CPA vs CFA – Which is Harder?
Most people feel the CFA exam to be more difficult than the CPA exam. This is because there is a great deal more content to cover in the CFA exam with a recommended study time of 300-400 hours per exam section, with a much narrower testing window. This means that it is a high-time investment in studying with only two opportunities a year to attempt the exam. On the other hand, most people recommend spending around 100 hours to prepare for each part of the CPA and it is possible to take each part throughout the year. In addition to this is the 4,000 hour experience requirement for certification. This is nearly double the CPA licensing requirements of most states. Furthermore, the exams themselves for the CFA are far more difficult than the CPAs, as can be seen from the difference in pass rates that are quoted in the table.
We hope that you found this helpful! Good luck with whatever you decide to pursue.