Accounting and finance are essential parts of nearly all career fields, from business to healthcare. Individuals with an undergraduate or graduate degree commonly seek to gain professional certification to remain competitive in their fields and open the door to additional career opportunities. Many inquire about the difference between the major accounting and financial certifications, such as CPA, CFA, and CFP. All designations require an accounting degree and licensing examination, but the duties differ.
Description of a CPA
A CPA is a certified public accountant that assists business and individual clients on a variety of accounting and tax related issues. He or she helps with preparation of tax documents, analysis of financial records, and conducting audits. He or she also helps make sure individuals and companies abide by laws and regulations, improve accounting processes, decrease financial risks, and implement and maintain reporting mechanisms. Many CPAs specialize in a specific area, such as corporate finance, forensic accounting, tax preparation, and analysis and planning. Individuals wanting to become a CPA usually need at least a bachelor’s degree in accounting or related area, and pass the Uniform CPA Examination administered by the American Institute of CPAs. CPAs must complete at least 40 hours of continuing education on a yearly basis to maintain their licenses.
Description of a CFA
A CFA is a chartered financial analyst who spends majority of his or her time investigating into the financial aspects of accounting. He or she analyzes the flow of money for clients, and any other related sources of income, such as stocks and bonds. He or she focuses on the management of portfolios and conducting research. CFAs may also specialize in a certain area, like economics, corporate finance, or financial reporting. A minimum of a master’s degree is typically required to become a CFA. Individuals wanting to become a CFA must take a different route than aspiring CPAs. Special training and extensive experience in specific investment fields is required to take the examinations. Potential CFAs must take three examinations, regarded as Level I, Level II, and Level III CFA exams. Applicants may only register for one exam at a time and pass them in order. The first exam is only offered twice a year and the other two only one time a year.
Description of a CFP
A CFP is a certified financial planner that creates financial plans for clients. He or she works for both individuals and organizations. The main objective usually involves the planning of estate and assets and investing. A CFP also assists with budgeting, accounting, and financial goals. Those interested in becoming a CFP must have at least a bachelor’s degree and have at least three years of professional experience in financial planning. Individuals must then take the ten-hour CFP Certification Examination administered by the CFP Board. CFPs must complete at least 30 hours of continuing education every two years to maintain their licenses.
Gaining any of these designations will likely help accounting and finance professionals gain employment in nearly any industry and perform an array of tasks. These certifications are widely recognized and can help professionals succeed in their chosen career fields.