Is a CPA or CFA better for corporate finance?
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.
There are many roles in corporate finance that a CFA helps prepare a candidate for, including research analysts, equity analysts, portfolio managers, chief financial officers, and corporate financial analysts.
Whether you're aiming for a senior financial management role in a corporation, a position in a public accounting firm, or even considering starting your own practice, having a CPA designation can set you apart from the competition.
The Chartered Financial Analyst credential is one of the most demanding exams on Earth when it comes to preparation and study time required. The average pass rate for the CFA Level 1 is only 41%. For Level 2, you're looking at a passage rate of 45%. And Level 3 is not much easier at 52%.
The CPA and CFA combination is best suited if you plan to work in the research department within investment banks, hedge funds, and mutual funds or plan to hold another job in the investment or finance community.
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 the CPA and CFA are prestigious designations that show skill and competency. The primary difference between the CPA and CFA is that the CPA is an accounting credential, while the CFA is for financial analysis. While they are related in many ways, accounting and finance are ultimately separate fields.
The CPA Leader
While they're a natural fit for CFO and many go on to become CEO or president, their organizational skills and business acumen also make them ideal candidates for the COO role.
The salary difference between a licensed CPA and an unlicensed accountant throughout a career could be hundreds of thousands of dollars. Moreover, the license is so desirable that accountants can use it as leverage for raises outside the typical pay raise windows. Becoming a CPA has numerous benefits.
The short answer is yes, CPAs can become investment bankers. With their financial expertise and analytical skills, CPAs are well-positioned to transition into investment banking. However, making the transition requires a significant investment of time and effort.
Is passing CFA a big deal?
There also may be financial benefits. You may see your salary increase after you've become a CFA or you may surpass other applicants who don't have this designation when competing for a new job.
According to the CFA Institute, this credential "is the professional standard of choice for more than 31,000 investment firms worldwide."1 It can be especially helpful if you don't have an undergraduate degree in finance, economics, or accounting, and your goal is a job or career in the finance industry.
Considering their pass rates—approximately 50% for the CPA exams, around 13.5% for candidates completing all three levels of the CFA exams, and roughly 70% for the Florida bar—statistics would suggest that the CFA credential is in fact the hardest.
CFA Salary in USA depends on the work experience and job roles. The average salary of a Chartered Financial Analyst is USD 108,855 per year (INR 90.63 Lakhs Approx). This is just base pay and does not include other benefits of total compensation.
A CFA and FRM combination can be an excellent choice as the competitive finance world demands you to have varied skill sets. However, the challenge of clearing the CFA and FRM exams together remains. Before pursuing this combination, you must have a fair idea about the exams and strategies accordingly.
– The CFA Institute says a CFA charter holder can earn between $126,000 and $177,000. – Comparably.com data from Feb. 2023 shows the average CFP salary in the U.S. is $121,099. The total range is between $39,300 and $187,200.
However, preparing for the CFA exam will help you understand some of the more advanced components of Corporate Finance like foreign exchange and international equity research. This in itself will put you ahead of your potential colleagues who are not charterholders.
Corporate finance may not be as “prestigious” as investment banking, and it doesn't give you as many exit opportunities…
Is the CFA Equivalent to a Master's Degree? Since both the CFA Program and an MSFA require an undergraduate degree in most cases and require about the same total amount of study, the CFA is generally considered to be equivalent to a master's degree.
| Job Title | Average Annual Salary |
|---|---|
| Chief Compliance Officer (CCO) | $181,750 |
| Treasurer | $199,750 |
| Vice President of Finance | $192,750 |
| Corporate Controller | $188,250 |
Is there anything higher than CPA?
Enrolled Agent (EA) The enrolled agent credential, or EA, is a designation that allows an accounting professional to represent taxpayers before the Internal Revenue Service (IRS). It is the highest credential awarded by the IRS and can be earned by completing a three-part test.
Deciding which is better for you comes down to personal preference. Those leaning toward accounting or finance may find a CPA credential a valuable asset for their career. If your plan is to move into an executive or leadership position, an MBA may be a good choice.
Obtaining a Certified Public Accountant (CPA) license leads to much higher accounting salaries in California: CPAs earn 20-30% more on average. Senior CPAs make well over $100,000. High-level CPA executives see $150,000+ salaries.
A CPA salary usually reaches the high five figures, and senior CPAs in management can earn a six-figure salary.
In 2012, 55% of S&P 2000 CFOs had CPA designations. By 2022, that figure was down to 43%. The bad news: You don't have an accounting degree.
