In the finance and accounting world, professional certifications significantly impact career growth and credibility. Among the most sought-after credentials are the Chartered Financial Analyst (CFA) and the Certified Public Accountant (CPA). While both are prestigious, they cater to different specialisations and career paths within finance and accounting. Choosing between CFA and CPA is a crucial decision for students and professionals aspiring to excel in finance, investment, or accounting roles. Each certification involves a unique syllabus, exam pattern, and career outcomes. The CFA focuses on investment management, portfolio analysis, and financial markets, whereas the CPA is centered around accounting principles, auditing, tax regulations, and compliance.
Understanding these differences will help you align your career goals with the right certification, making an informed decision that maximizes your professional growth. Let’s explore both certifications in detail to see which suits you best.
What is a CFA?
The Chartered Financial Analyst (CFA) designation is a globally recognized certification offered by the CFA Institute. It is highly regarded in investment management, financial analysis, equity research, portfolio management, and corporate finance.
The CFA program consists of three exam levels—Level 1, Level 2, and Level 3—that cover topics like ethics, quantitative methods, economics, financial reporting and analysis, corporate finance, equity investments, fixed income, derivatives, alternative investments, and portfolio management.
CFA candidates must pass all three exams sequentially, which generally takes 2-4 years, and gain at least four years of relevant work experience to earn the charter. The program is known for its rigor and comprehensive curriculum, designed to prepare finance professionals for analytical and investment-focused roles.
What is a CPA?
The Certified Public Accountant (CPA) is a professional accounting qualification recognized primarily in the United States but respected globally. The CPA credential is administered by the American Institute of Certified Public Accountants (AICPA) and is essential for accounting, auditing, taxation, and compliance roles.
The CPA exam comprises four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). Candidates must meet education and experience requirements, which vary by state, to obtain licensure.
CPAs play vital roles in auditing financial statements, preparing taxes, advising on regulatory compliance, and ensuring accurate financial reporting. The qualification is often preferred for careers in accounting firms, corporate accounting departments, tax consultancies, and government agencies.
CFA and CPA: Common requirements
Both CFAs and CPAs are required to fulfil specific educational and professional experience criteria, pass rigorous examinations to demonstrate their expertise, and maintain their credentials through Continuing Professional Education (CPE). While both designations uphold high standards, their focus areas and requirements differ slightly, as shown below.
| Area | CFA | CPA |
|---|---|---|
| Education | Requires a bachelor’s degree. | Varies by state, but all states require a bachelor’s degree with at least 150 hours of post-secondary education. |
| Relevant work experience | Requires between 1,000 and 4,000 hours of relevant professional experience, depending on educational qualifications. The experience need not be directly investment-related. | Varies by state, though all states require a minimum of one year of full-time accounting work or its part-time equivalent. |
| Examination | Must pass a three-part CFA exam. | Must pass a four-part CPA exam. |
| Continuing professional education (CPE) | The CFA Institute recommends at least 20 CPE credits per year. | Requirements vary by state, but most require an average of 40 CPE credits annually. |
CFA and CPA: Exam structure
Both the Chartered Financial Analyst (CFA) and Certified Public Accountant (CPA) exams are globally recognised but differ in structure and focus. While the CFA emphasises investment management and financial strategy, the CPA centres on accounting, auditing, taxation, and regulatory compliance.
| Feature | Chartered Financial Analyst (CFA) | Certified Public Accountant (CPA) |
|---|---|---|
| Levels/Sections | Three progressive levels that must be passed in sequence. | Four sections, consisting of three core sections and one specialised discipline chosen by the candidate. The sections can be attempted in any order. |
| Exam content | Covers a wide range of investment-related topics, including ethics, quantitative methods, economics, financial statement analysis, corporate finance, equity investments, fixed income, and derivatives. | Core Sections: Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), Regulation (REG). |
| Discipline Sections: Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), Tax Compliance and Planning (TCP). | ||
| Question format | Level I: Multiple-choice questions. | |
| Level II: Item sets (vignettes followed by multiple-choice questions). | ||
| Level III: Constructed response (essay) questions and item sets. | Multiple-choice questions (MCQs) and task-based simulations (TBSs). | |
| Total exam time | Each of the three levels is approximately 4.5 hours long, divided into two sessions with an optional break. | Each of the four sections lasts four hours, totalling 16 testing hours. |
| Study time | Requires a minimum of 300+ study hours per level, with an estimated total of around 900 hours. | Candidates typically spend 300 to 400 hours preparing for all four sections. |
| Pass rates | Generally lower than CPA exams, with pass rates for individual levels often below 50%. | Typically higher than CFA exams, with pass rates around or above 50% per section. |
Responsibilities of a CFA compared to a CPA
Both the Chartered Financial Analyst (CFA) and Certified Public Accountant (CPA) designations reflect advanced financial expertise but differ in focus—CFAs specialise in investment management and analysis, while CPAs focus on accounting, auditing, taxation, and financial reporting.
| Aspect | CFA (Chartered Financial Analyst) | CPA (Certified Public Accountant) |
|---|---|---|
| Primary focus | Investment management, financial analysis, and portfolio management. | Accounting, auditing, taxation, and financial reporting. |
| Main role | Analysing financial data to develop investment strategies and provide advisory insights. | Preparing, auditing, and certifying financial statements while ensuring regulatory compliance. |
| Typical responsibilities | Focuses on analysing markets, valuing assets, managing investment portfolios, and assessing financial risks to guide investment decisions. | Responsible for auditing financial records, managing tax filings, ensuring compliance, offering accounting advice, and investigating financial irregularities. |
| Typical employers | Investment banks, asset management firms, hedge funds, private equity firms, wealth management companies. | Public accounting firms (e.g., the Big Four), corporate accounting departments, government agencies, non-profit organisations. |
| Common job titles | Investment Analyst, Portfolio Manager, Risk Manager, Wealth Manager, Investment Banker. | Public Accountant, Auditor, Tax Specialist or Manager, Controller, Chief Financial Officer (CFO). |
| Data relationship | Uses and analyses the financial data created by CPAs. | Creates or audits the financial data used by CFAs. |
Differences between CFA and CPA
| Criteria | Chartered Financial Analyst (CFA) | Certified Public Accountant (CPA) |
|---|---|---|
| Governing body | CFA Institute | American Institute of Certified Public Accountants (AICPA) |
| Core focus | Investment management, portfolio analysis, financial markets | Accounting, auditing, tax, regulatory compliance |
| Exam structure | 3 Levels (Level 1, 2, 3) | 4 Sections (AUD, BEC, FAR, REG) |
| Exam duration | 6 hours per level exam, multiple-choice and essay questions | 4 exams, 4 hours each, multiple-choice and task-based simulations |
| Average completion time | 2 to 4 years | 12 to 18 months (depending on state and preparation) |
| Work experience requirement | 4 years relevant work experience | Varies by state, typically 1-2 years supervised experience |
| Global recognition | Highly recognized globally, especially in investment finance | Primarily US-focused but respected internationally |
| Career path | Portfolio Manager, Investment Analyst, Financial Advisor | Auditor, Tax Consultant, Financial Accountant, Controller |
| Salary potential | High, especially in investment banking and asset management | Competitive, especially in public accounting firms and corporates |
| Difficulty level | Very challenging, especially due to broad finance topics | Difficult, but focused on accounting and regulatory knowledge |
How to choose between CFA and CPA?
Choosing the right certification depends on your career goals, interests, and location preferences. Here are some pointers to help you decide:
- Interest area: If you enjoy investment analysis, portfolio management, and financial markets, CFA is suitable. For a career in accounting, auditing, taxation, and compliance, CPA is ideal.
- Geographical focus: CPA is heavily US-centric, with licensure tied to US states. CFA is globally recognized, offering flexibility in international careers.
- Career aspirations: Aspiring investment bankers, asset managers, or equity analysts benefit from CFA. Those aiming to become auditors, tax professionals, or controllers often pursue CPA.
- Time commitment: CFA exams take longer to clear but offer a comprehensive finance skillset. CPA exams may be completed quicker but require state-specific education and experience criteria.
- Work experience: CFA mandates four years of relevant work experience; CPA’s requirements vary by state.
- Exam difficulty: Both are challenging; CFA covers a broader finance spectrum, while CPA dives deep into accounting specifics.
Which is better: CFA or CPA?
There isn’t a single definitive answer to this question, but the insights shared here should help you make a more informed decision. In the end, your choice depends on your professional interests, preferred work style, and long-term career aspirations.
Conclusion
Both CFA and CPA certifications hold immense value and prestige in their respective fields. Your decision should be driven by your career interests, geographic preferences, and professional goals. The CFA is ideal for those focused on investments, portfolio management, and global finance roles. On the other hand, the CPA is perfect for individuals aiming for careers in accounting, auditing, taxation, and regulatory compliance, especially within the US market.
For finance professionals who already hold a Chartered Accountant designation or wish to expand their credentials, pursuing CFA or CPA can significantly boost career prospects. Financing options like a CA Loan or a professional loan from Bajaj Finance can help manage costs related to certification fees and study resources.
