When you are ready to move forward in your finance or accounting career, earning additional credentials can increase your income potential or allow you to work in a role you find more interesting or fulfilling. Trying to decide between becoming a Chartered Financial Analyst (CFA) or a Certified Public Accountant (CPA), knowing the right option may be challenging, so, Becker is outlining the differences between a CFA vs CPA, comparing career paths and salary requirements, and breaking down the requirements for both options.
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CFA vs CPA: What’s the difference?
First, let's define these designations and outline exactly what they are.
What is a CFA?
A Chartered Financial Analyst, or CFA, is a finance professional specializing in investment management and analysis. To obtain this designation from the CFA Institute, candidates must show competency and knowledge related to assessing financial markets, managing investment portfolios, and making informed investment decisions as well as ethics and professional standards. CFA charter holders must also have a deeper understanding of financial instruments, risk management, and investment strategies, which positions them to work in finance, asset management, and investment banking.
What is a CPA?
A Certified Public Accountant, or CPA, is a licensed accounting professional recognized for their skill and competency in advanced areas of financial reporting, taxation, and auditing. Candidates obtain this designation from their state's Board of Accountancy after meeting experience and education requirements and passing the CPA Exam.
With their skill in financial regulations and ethical standards, CPAs can provide services including tax preparation, financial analysis, and consulting for public clients, or they can work internally within a business or organization.
CPA vs CFA
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.
More specifically, the CFA focuses on financial matters related to investments, risk management, and strategy. The CPA plays an important role in ensuring compliance, financial transparency, and strategic decision-making and also has a much broader scope of knowledge.
CFA vs CPA: Meeting the requirements
Both CFAs and CPAs must meet specific education and experience requirements, pass an exam to determine skill and competency in specific areas, then maintain their designation through Continuing Professional Education (CPE).
| Area | CFA | CPA |
|---|---|---|
| Education | Bachelor's degree | Varies by state but all states require a bachelor's degree with a minimum of 150 hours of post-secondary education |
| Relevant work experience | Between 1,000 and 4,000 hours of relevant work experience, depending on higher education. Work does not need to be investment-related. | Varies by state but all states require a minimum of one year of full-time accounting work or the part-time equivalent |
| Examination | Pass a three-part CFA Exam | Pass a four-part CPA Exam |
| Continuing professional education | The CFA Institute recommends a minimum of 20 CPE credits each year. | It depends on the state, but most states require an average of 40 CPE credits each year. |
How to become a CFA
To become a CFA charterholder, you must enroll in the CFA Program through the CFA Institute and register for the Level 1 exam. Prior to enrolling you must hold a bachelor's degree or its equivalent from an accredited college or university or be within 23 months of graduation.
You must also have a combination of 4,000 hours of work experience and higher education that you acquired over at least three sequential years. The dates of education and professional work cannot overlap. Work experience may be earned before, during, or after enrolling in the CFA Program. It must be completed before earning the CFA charter.
It's important to note that work experience, including paid internships, does not need to be related to investments, but it should include higher-level judgement and business skills, including analytical skills and business communication.
You must also
- Pass the CFA Exam - a three-section exam which must be taken in order of Level 1, Level 2, and Level 3
- Submit two to three professional references
- Apply to become a regular member of CFA Institute
How to become a CPA
You receive your CPA license from your state's Board of Accountancy, and each state has different CPA requirements to earn your license. However, as we mentioned above, you will need to take the following steps:
- Earn your state's minimum amound of college credit to sit for the CPA Exam
- Apply with your state to sit for the CPA Exam
- Pass the four-section CPA Exam
- Complete 150 hours of college credit and hold a bachelor's degree
- Complete the equivalent of one year of full-time employment in accounting
- Apply with your state for your license
Most states also have ethics requirements to complete prior to earning your license.
Taking the exam: CPA vs CFA
Let's look a bit more closely at the exams necessary to become a CFA or CPA and how they are similar and how they differ.
| Details | CFA | CPA |
|---|---|---|
| How many sections? | Three: Level I, Level II, and Level III to be taken in order | Four: Three Core exams and choose one of three Disciplines to take in any order |
| Types of questions | Multiple-choice and vignette-supported essay questions | Multiple-choice and task-based simulations |
| How long is the exam? | Each section is four hours and 24 minutes | Each section is four hours |
| Pass rate | 41%1 | Around 50% |
| Total study time | 900 hours | 320 to 420 hours |
| Cost | $1,250 for each section, plus a one-time enrollment fee of $3502 | Application fee and registration fee vary by state. The National Association of State Boards of Accountancy recommends that states set the examination fee to $344.80 per section. |
Get your free guide to the CPA Exam
CFA Exam
The CFA Exam is a three-section exam with each section getting progressively more difficult and building on knowledge covered in the previous section. The CFA Institute recommends candidates spend a minimum of 300 hours studying for each section due to the complexity of the topics. The topics covered on all three exams include:
- Ethics and professional standards
- Quantitative methods
- Economics
- Financial statement analysis
- Corporate issues
- Portfolio management
- Equity investments
- Fixed income
- Derivatives
- Alternative investments
The CFA Exam structure
- The Level 1 Exam consists of 180 multiple-choice questions split between two 135-minute sessions.
- The Level II Exam consists of 22 item sets of vignettes with 88 multiple-choice questions about them. The exam is divided into two sessions, both 132 minutes.
- The Level III Exam consists of vignettes with associated multiple-choice questions as well as essay questions related to vignettes. Beginning in 2025, the Level III Exam will offer three specialized pathways for a more directed career path: Private Wealth, Private Markets, and Portfolio Management. Like Level II, this exam is divided into two 132-minute sessions.
The CPA Exam
The CPA Exam consists of three Core sections that focus on knowledge and skills universal to all CPAs. All candidates must take:
- Auditing and Attestation (AUD)
- Financial Accounting and Reporting (FAR)
- Taxation and Regulation (REG)
In addition to passing all three Core sections, candidates must choose one Discipline from three options:
- Information Systems and Controls (ISC)
- Business Analysis and Reporting (BAR)
- Tax Compliance and Planning (TCP)
These Disciplines focus on knowledge and skills required within a specialization.
Each section is four hours long and is divided into five "testlets." Two testlets are only multiple-choice questions, and the other three are task-based simulations in which candidates must answer longer questions related to the information provided.
Take a closer look: Learn about the CPA Exam format
CFA vs CPA Exam difficulty
If you're basing your decision on which exam is harder, CPA vs CFA, there really isn't one clear answer. Both are challenging and require gaining skills and knowledge in complex topics. However, the CPA Exam generally requires less studying - around 80 to 120 hours per section compared to 300 hours per section of the CFA Exam, and the CPA Exam also has a higher pass rate.
CPA vs CFA: Career opportunities
Most people choose their designation based on what they want kind of career path they want. So, what kind of jobs do CPAs do compared to CFAs?
What does a CPA do?
As we mentioned earlier, CPAs often work in at least one of five areas:
- Auditing and review
- Tax preparation and consulting
- Consulting services
- Financial planning
- Litigation consulting
This means CPAs can generate, analyze, and certify financial statements, prepare tax returns, and provide advisory services to help their clients become more profitable, reduce costs, or minimize their tax burdens. They can also perform audits, either internal or external, to validate the finances of a company.
What does a CFA Charterholder do?
CFA Charterholders, by contrast, function more as analysts and advisors. They pour through past financial statements, looking for patterns and opportunities to increase growth and profitability—then make specific recommendations as to how the company or individual client’s financial goals can be achieved.
CFA Charterholders also frequently provide investment advice. They can help clients decide on the best investments to manage their wealth and grow their portfolios, considering factors such as risk tolerance and tax advantages.
CPA vs CFA responsibilities: Side-by-side
CPAs' roles fall squarely under accounting, typically, though they can also work in finance. However, CFAs' roles are almost completely focused on financial analysis. Becoming a CPA offers significantly more flexibility.
| CPA | CFA |
|---|---|---|
Main focus | Accounting and taxes | Finance and investments |
Primary tasks |
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Potential jobs |
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Take the next step: Accounting career guide
CFA vs CPA: Income insights
As we mentioned, both the CPA and CFA open wider career opportunities, which can lead to higher salaries. Of course, salary is dependent on a variety of factors, including the job itself, industry, amount of experience, and location.
| CPA | CFA |
Average base salary for certified professionals (US) | $76,639 4 | $91,7233 |
While CFA Charterholders earn slightly more than CPAs (according to this data, at least) both credentials significantly increase your earning potential. With enough hard work and ambition, you’ll find plenty of opportunities to meet your personal financial goals with either the CPA or CFA.
Take the next step: CPA salary guide
CPA vs CFA: Which one is right for you?
There’s no simple answer to this question, of course. But we hope the information in this article has empowered you to make a smarter decision. Ultimately, your choice will come down to what kinds of things you like to do and your career goals.
Download our FREE CPA Exam ebook
If you want to learn more about the CPA Exam, download our free CPA Exam guide for 2024 and get a clear look at what you can expect. What's inside?
- An overview of the CPA Exam
- Comprehensive details of each section, including the exam format, section times, scoring details, and key content areas
- Choosing your Discipline
- Do's and don'ts to get ready for the CPA Exam
- Exam study tips
- Multiple-choice practice questions
Get your FREE CPA Exam Guide
This comprehensive ebook contains everything you need to know about the CPA Exam, including the exam format, study tips, and practice questions!
