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Finance vs. accounting degree: Which major should your students choose?

Finance vs. accounting degree: Which major should your students choose?

As an accounting educator, you understand that students may be torn between pursuing a degree in finance or accounting. Especially if you teach introductory accounting and finance courses, you know what an important (and sometimes difficult) decision it is to commit to a specific major.

For students on the accounting path, two of the commonly debated majors to choose from are accounting and finance. Since the two share similarities, it’s important to thoroughly explain the key differences and nuances of the different majors so students can choose which one will best suit them.

Read on to learn the areas you should highlight to help demonstrate the different skill sets, areas of study, and job outcomes that each major entails, so your students can make a well-informed decision that will ultimately impact their career.

Finance vs. accounting degree: Set the foundation

It’s key to explain each major at its most basic level to help paint a comprehensive picture of each path of study.

Highlight that finance and accounting degrees prepare students for careers that are rooted in their required classes. Explain to students that finance is generally considered the shifting or manipulation of money, whereas accounting is the tracking of these manipulations. In other words, while finance works to plan the distribution of business assets, accounting ensures accurate tracking of these transactions. This could mean the management of investment portfolios or deciding how a company allocates its capital in finance roles. In comparison, the accounting job function could mean tracking transactions in the general ledger and creating the financial statements.

It will also be important to point out that courses in the junior and senior years become much more intense than in previous years, as this is when students will load up on specialized finance and accounting classes. It may be helpful to distribute a course catalog or sample syllabi from higher-level accounting courses so students can get a sense of what types of classes they may be required to take for degree completion.

You may want to review the concepts covered in the higher-level course with prospective students. For instance, in finance classes, they will learn more about best practices of portfolio management, capital investments and financial projections. In accounting classes, they will start to become familiar with rules and regulations of the profession, such as Generally Accepted Accounting Principles (GAAP) and the US Tax Code.

While each career comes with a different knowledge set, make sure students know that both finance and accounting jobs require an understanding of how the other field works.

Once you have given students a baseline of how finance and accounting are different, you’ll want to make sure they consider a number of factors to decide between the two.

Finance or accounting – Which degree is better?

To help students determine whether finance or accounting is best suited for them, they should consider the following factors:

  • What careers are they interested in?
  • What salary ranges do they want to earn?
  • What is their working style?
  • Are they interested in work travel?
  • What additional schooling or licensing may be required?

Below, we’ll look at each of these factors and how they should contribute to students’ decisions to pursue a finance degree vs. accounting degree.

Finance and accounting careers

A fantastic benefit of both a finance and an accounting degree is that either offers a wide variety of career choices. Both careers are highly regarded and two of the most in-demand among all professions.

Present your students with examples of some key job titles that can come out of finance and accounting careers, like in the below chart.

In an entry level accounting job, students will likely report to, or work with, the company controller and CFO. A finance job can lead down that path, too, but might also report to a finance director or senior investment manager.

Finance job titles      Accounting job titles

Financial analyst         Public accounting (financial auditor, tax accountant)

Portfolio manager       Cost accountant

Financial advisor         Controller

Investment banker      Chief financial officer

 

Potential salaries

In an age where student debt is at an all-time high, one of students’ top concerns when picking a major is ultimately what kinds of salaries they will have the potential to earn upon graduation.

If your students are unaware, inform them that career paths in the accounting and finance fields are historically among the highest paying, from entry level jobs to C-suite offices. According to the US Department of Labor’s Bureau of Labor Statistics, the median annual wage for financial analysts was $85,660 in May 2018. Comparatively, the median annual wage for an accountant in 2019 was $71,550.

As with many entry level jobs, students may begin in the $50,000 to-$60,000 yearly range (depending on the city they live in) — but many top earners in finance and accounting ring-in more than $125,000 annually.

What is their working style like?

Remind students that salary isn’t the only thing that matters - choosing a path that complements their work styles and ways of thought is essential to feel fulfilled and be successful in their careers.

Underline some of the key differences in day-to-day tasks: for instance, finance careers typically deal in the big-picture of economic and market trends. Financial projections and analyses are highly reliant on these external factors, so this work can suit them if this is how they think.

Conversely, these factors don’t have a huge impact on accountants’ daily lives. Accounting careers may be more suitable for students who enjoy diving into data and ensuring accuracy in financial statements and transactions.

Are they interested in work travel?

Many students, especially millennials, consider the opportunity to travel for work an important factor in their choice of career. As such, remind students that travel is often an essential part of finance and accounting careers. While this can vary depending on the specific job, an audit position, along with many others at a public accounting firm can require a decent amount of travel. Inform students that a significant portion of their time may be onsite with a client rather than in-office in the city that they are based in, and that they may often be expected to travel more than 50% of the time. On the other hand, a cost accountant at a local company more than likely won’t travel at all.

Many financial advisors also log heavy local mileage for client meetings, whereas a financial analyst probably only goes to the company office each day.

Call out that while travel can be very demanding, it may also be very rewarding for those who enjoy it. While this might not be a top concern, it should be weighed into students’ decisions.

Which degree is better?

While there is no clear-cut answer to this question, there may be one path that is more compatible with a students’ skill set, personality and way of life. Each of these factors is an important consideration that makes for a highly individualized decision that can impact students’ career trajectories.

In the end, finance and accounting careers can both be rewarding in intangible and monetary ways. Ensuring that your students fully understand the scope of each can only set them up for success and ultimately, reward their career journeys.

Interested in partnering with Becker to help your students succeed on their CPA Exam or CMA Exam? Learn about Becker’s university partnership opportunities here.

Read more of Becker’s content for accounting educators.

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