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| *Ostroff, Fair and Company>>>Financial Services |
Certified Public Accountant VS Chartered Financial Analyst? |
I am torn between choosing a CPA or CFA designation to take my financial career to the next level. My long term goal is to work with the big 4, or obtain a corporate finance job. Any comments or suggestions or differences the two designations make???.. please also include level of toughness I have both a CPA and a CFA, and my advise is to get the CPA first, particularly given your stated career goals of working with the big 4 or a corporate finance job (assuming when you mean corporate finance job you don't mean investment banking). The CPA will give you a much more in-depth knowledge of corporate finances and taxation, which is the backbone of both public accounting and corporate finance. As a corporate finance person (possibly CFO), you will need to have a wide range of priorities, including corporate structure, capital budgeting, internal cost analysis, and financial reporting/tax reporting. The CPA will help you with all of these areas. While of lesser importance, the CFA will help with areas such as structuring corporate loans and financing, corporate return analysis (ROE/ROA), and other items, but the CFA is mainly geared toward an external, investment/portfolio management outlook, and may not be as helpful if you are a corporate finance employee. Typical questions on the CPA exam include: - What is the effect on income/EPS if corporate structure changes from 40/60 debt/equity to 60/40? - What are the legal ramifications of such-and-such activity within a coporation and who is responsible? - Deconstruct the cash flow statement for company X and evaluate its long-term viability prospects. Typical questions on the CFA exam include: - Company X sells for a P/E of 5x forward earnings, comparable companies sell for 6.5x forward earnings. Given the information below, is company X undervalued? If so, what is company X's fair value. - As imports from country Z rise, all else remaining constant, what is expected to happen to domestic interest rates for country Z? Ignoring the effect of interest rates, what is expected to happen to country Z's currency value? Whichever set of questions you find more interesting, that's the designation you should probably pursue. Thank you so much for you insight... it has given me a much clear path to work with, the plan is to start of with CPA, although ill try to squeeze in just the level 1 cfa this december... thank you once again.. -pankit I personally like the CPA, but that's because I am one. Take a look at the Occupational Handbook. Here's the link: http://www.bls.gov/search/ooh.asp?ct=ooh... Go with the CFA. A CPA is a bean counter is a bean counter is a bean counter. I do have a friend who went the CPA route and is now a CFO - but it's unusual. Master's degree in Finance or Economics would serve you well, too. Level of difficulty would be dependent on your skill set. Here's some sample questions from the CFA Institute: http://www.cfainstitute.org/cfaprog/cour... CPA sample tests and tutorials: http://www.cpa-exam.org/lrc/exam_tutoria... Take a look and judge for yourself. it seems to me like CPA would be the way to go......especially fi you want to work for big 4......you can always get CFA down the road...but i think you would have more options with CPA unless you want to get into investment banking or portfolio manager type job...then you would need your CFA Here's my two cents from my experience. I'm a CPA. I'm working on my MBA now, and I'm taking a class in Investments who is being taught by a CFA. So hopefully I can give you what you want from my experience. Being a CPA is more than just an accountant. CPA are professionals who works in the audit fields and tax fields. Big 4 now-a-days have many audits of public companies. Most of these audits are financial audits, looking at financial statements, internal control, and basic financial reporting activities. Most CPAs at the Big 4 level oversees audits of financial statements. So if your long term goal is to stay at Big 4, you will want to be a partner of one of the firms. To become a CPA, you must pass the CPA exam which has 4 parts. CFA is a different animal. It looks at stuffs like firm valuations, investments, risks, investment models, financial analysis. The CFA exam is a much tougher exam, some say. It's a 3-year, 3-level exam. Usually Big 4 firms has less CFAs than CPA obviously. CFA belongs in many "financial services firms" such as Merril Lynch, Vanguard, or a portfolio manager of a mutual fund, hedge fund, etc. Therefore, these are 2 completely different fields. CPA works with historical data, CFA helps predict the future. If you are in college, once you've had auditing class, you'll feel what CPA do, and if you have taken some finance class, you'll get a general feel of what CFA would do. It really depends on what your interest is. Let me know if you want to know more. |
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