CFA or CPA: Which Qualification is Better?

Shares

Finance professionals often pursue professional qualifications in order to advance their careers.

Certified Public Accountant (CPA) and Chartered Financial Analyst (CFA) designations are arguably the two most prestigious titles in their respective fields. What are the differences, and which one is better?

Here is the text version for your reference:

CFA or CPA: An Overview

The CFA and CPA titles cannot be compared apple-to-apple because they represent qualification in two different sub-sectors within the general accounting and finance field.

CPA is for accounting. CFA is for finance.

CPA is the “black-belt” in accounting. It is originally a designation for public accountants, but non-public accountants, tax accountants and finance professionals seek the CPA title to proof their number crunching expertise. In addition, the CPA license holder has statutory rights to sign audit report which makes the title special.

CFA, on the other hand, is the gold standard in finance and investment. For those who are looking for career as equity analysts, fund managers, and professionals in asset management or hedge fund houses, this is the best title you can get.

CFA or CPA: Application & Qualification

CPA

The CPA license is granted by each of the 55 states or jurisdiction in the United States. There is no centralized administrative body and each state has slightly different CPA exam and licensing requirements.

The eligibility criteria for US CPA is the highest among all finance related qualifications. Candidates must have at least a 4-year bachelor degree and in most cases, 150 credit hours (equivalent to 5 years of higher education) to sit for the exam.

Because of the high barrier of entry and complicated application process, it is quite a challenge for non-US candidates to take the exam.

CFA

CFA is a designation granted by CFA Institute, a global non-profit organization. The institute is based in the US, but there are 3 regional offices and 200 local chapters around the world. Candidates apply through the institute and  application is relatively simple.

As long as the candidate has a bachelor degree or 4 years of practically any working experience, this person can sit for the exam. The candidate can even take the exam before graduation.

It is much harder and complicated to get qualified to take the CPA exam, especially for non-US candidates.

CFA or CPA: Exam Content and Format

CPA

There are 4 exam sections: Financial Accounting & Reporting, Audit & Attestation, Regulation and Business Environment & Concepts.

The exam is 100% computerized consisting of multiple choice questions, task-based simulations (case studies) and written communications. Grading is mostly computerized.

You can choose to take the 4 parts one at a time, 2 at a time or even 4 at the same time. You can sit for the exam any time in the CPA exam testing window, which is the first 2 months of each quarter and at any prometric centers throughout the US. There are also testing centers in Japan, Brazil and 4 Middle Eastern countries.

CFA

The exam format is much less flexible for CFA. There are 3 levels of exam, and you need to complete one in order to move on to the next. Exam content is focused on financial analysis and portfolio management instead of accounting, audit and taxation.

The exam is in the traditional pencil-and-paper format. The test is administrated twice a year for Level 1, and once once a year for Level 2 and Level 3.

There are many international testing centers for CFA exam in major cities and metropolitan areas.

The CPA exam has 4 exam parts. You can take each part in any order and any time within the testing window.

The CFA exam has 3 levels. You must take the 3 exams sequentially, and each exam is offered 1-2 times a year.

CFA or CPA: Time Required to Become Qualified

CPA

Most candidates aim to pass the CPA exam within a year. Some who have the time and commitment can study all materials within 6 months, take all 4 parts of the exam in one go and pass.

Most state boards require 1 year of accounting experience before getting the license, and for most states this experience has to be supervised and verified by a US CPA.

CFA

Although technically candidates can complete the CFA exam within 18 months (Level 1 in December, Level 2 in June, Level 3 in June the year after), most candidates take 4 years to complete the exams. It takes much longer to become a CFA than a CPA.

4 years of relevant experience is required to get the CFA designation. Your supervisor, who will be verifying your experience, does not need to be a CFA. This adds a lot of flexibility in the process.

Because one can take the CPA exam parts at the same time, it  is possible to complete the exam within a few months. There is a 1-2 year experience requirement after th exam.

For CFA, most candidates take 4 years to complete the 3 levels, plus 4 years of relevant experience before you can become a CFA. The exam taking and experience can start at the same time.

How about CFA and CPA?

Stephanie chooses to be a CPA only, but John is a CPA and CFA.

The CFA and CPA combo helps the professional to be seen as an accounting expert within finance, and a finance expert within the accounting field. In our case, this powerful combination helps propel John’s career to become the CFO of a private equity and later on the head of a reputable family office.

It took John a lot of time and effort to complete the two qualification, but when started early before family commitment builds up, it is actually quite doable.  John was able to obtain the CPA and CFA titles after 5 years of graduation.

Conclusion

cfa or cpa

When deciding whether to go for CFA or CPA, the first and foremost consideration is the relevancy to your career. Other than that, CPA has more restrictive education and experience requirement, but once you get qualified, the process is much faster. CFA has a lower entry barrier but it takes much longer time to complete.

The paths towards CPA and CFA have their own challenges. It’s most important to choose based on your career aspiration. You can do both!

Your Know Our Choices. What’s Yours?

Would you be Stephanie, who goes for one qualification, or John, who goes for both? Which one are you going to start first? Pick one and explore further:

  • Meghan D says:

    Thank you! Glad you liked it! 🙂

  • Sanika says:

    So are you saying, a 3 year bachelor degree plus 3 years of Internship is not enough to be able to pursue CPA degree?

  • Umang Thakkar says:

    Hey
    I have just completed my bechlor in commerce from India now I’m planning to go to Australia for master of professional accounting, but i want to pursue Cfa in future so what would be better option Postgraduate in finance or Mpa?
    It is ohk if i choose MPA n than after I’ll go for Cfa?
    Please let me know

    Thank you
    Umang Thakkar

    • Meghan D says:

      I definitely would recommend going for a postgraduate finance program. But some time has passed now, so what did you decide to do?

  • Hem says:

    Hello,
    Thanks for the article.
    I am currently doing my masters in finance from Northeastern University and wish to be a financial advisor. I am still trying to decide whether to go a cfa or cfp route. I have no finance experience ( worked in rehab)as I am looking for a career change from being an occupational therapist . I did my BSc OT in India. What would you advise me, as to what route to take(CFP vs CFA)?
    Thanks. Will appreciate your response.
    Hem

    • Meghan D says:

      It all depends on what you want to do. CFA and CFP are different, so the career paths for each are different as well. If you want to work with individuals on their financial situations, then a CFP makes sense. A CFA is a bit more general and the designation lends itself to working within a larger organization. What did you decide to go for?

  • deepika ahuja says:

    hello sir
    i m frm india & i m CA finalist & hve qualified Masters in Commerce.
    Nw i m interested in Accounting & Taxation, dats y i wnt to go fo cpa.
    Sir Is it Beneficial in India aftr Qualified CPA ??

  • Drasti Vora says:

    I am doing my CA articleship right now, i am also pursuing my graduation which will be complete by next year , i am planning to do cpa in long run , also i have keen interest in audit and international taxation , wat are future scopes for both cfa and cpa . I want to work as an public accountant in usa ..

    • John / Stephanie says:

      Hi Drasti, if it is public accounting you are aspiring to, the CPA license is more appropriate. The only thing for international candidates is that it is somewhat complicated to get qualified. You may want to check out this page and see if it works for you: http://ipassthecpaexam.com/cpa-education-requirements/

      I have to say that the CPA license doesn’t guarantee or even land you a job in the US, just like as a ACCA member one can’t assume that a job in the UK is waiting for him. Sorry to sound a bit blunt, but it has been a misunderstanding for quite a few of my readers and I want people to know the facts 🙂

  • Dhwani Sanghavi says:

    Hello

    I am a qualified Chartered Accountant and have completed my masters. Soon I’ll be going to US for MBA and plan to work there for next couple of years. Should I get additional degree of CPA or CFA for same? and which one would be preferred?

    Thanks & Regards,
    CA Dhwani Sanghavi

    • John / Stephanie says:

      Hi Dhwani,
      If you are getting the MBA, you may want to focus on that first. It’s a lot of work to go through a program and a certification together. But it is doable.

      In terms of which one is preferred, it really depends on which career path you want to take as discussed above. There isn’t an absolute best.

  • Prajyot Pandit says:

    Hi There,

    I am a CA and CS from INDIA. Having total work experience of 6 years; I have completed my Bachlors degree in Commerce (10+2+3 education format in India); whether I am eligible for CPA in USA? further, I may be travelling to USA on dependant visa next year; I would like to know that post reaching US on dependant VISA while preparing for CPA/CFA, can I apply for work permit? The perceptive for me/us is employment/job in USA, so which course should I opt for?

    Further, So far as my work exp.is concerned, I am working in BFSI sector since last 3 years (financial analysis related profile), my experience prior to that includes approx 3 years of exp in Accouting and Auditing

    Thanks and Regards
    Prajyot Pandit

  • Yogesh Kumar says:

    Hi Team,

    I have completed my CA-inter and left with CA final exams , will i be eligible for CPA/ CFA ??
    And i have 3 years of articleship experience along with that i have 1.9 years of experience.

    Regards
    Yogehs Kumar

  • Shreya says:

    Hello.. I want to ask.. I am an Indian. And I had given an entrance test in bhu for bcom.. And I don’t have much interest in Mba as it had now become a very common course that everyone is pursuing… I want to pursue a professional degree.. And cfa and cpa are the two most interesting that I found… But now I not able to decide whether to go for cpa or cfa.. And ur content I found out interesting and also good and helpful as at one place it told the difference between cfa and cpa but pls could you help me to get a correct line.. And I am also worried about the future life also.. That is the comfort life in future.. So what will be better.. And best..

    • Meghan D says:

      What I recommend depends on what field you want to pursue. A CFA and CPA are very different, so tell me, what is your ideal job?

  • Anonymous Accountant says:

    Great article. Its hard to find good articles comparing the different paths in finance (CPA vs CFA) without some 18-19-year-old “finance major” that looks down on any job deemed lesser than Goldman Sachs.

    Seeing that I am currently pursuing a CPA, I saw a couple things that were missed that I think are important:
    1) The centralized governing body for the CPA exam is the AICPA. They make the test and it is up to each state to decided on the requirements to sit for the exam.
    2) On the topic of most people try to pass in one year… At least in my state, your application of intent to sit for the exam is good for 2 years, so you have that long to pass before submitting a new one. Nationally, your test grades are good for 18 months. This means that once you have passed your first section you have 18 months to pass the other three before that first section’s grade expires and you have to retake it.

  • Basel says:

    Hey there !!
    I’m a fresh graduate, majored in accounting and i just passed both CMA exams but am not certified as I have no work experience and am looking to pursue CPA certification. Also I recieved some advise that taking PMP along with these certifications would be a plus.
    Thank you for your time 🙂

  • Ravi says:

    What do you think can be career prospects for one with CPA and CFA qualified ? In India or outside india..

    • Meghan D says:

      The prospects when you have both certifications are amazing. John was able to become a CFO because he had earned both certifications.

  • Eevie says:

    Hey!
    I am a Bachelors of Commerce from India – 3 years and MBA in Finance & Banking, with work experience of more than 5 years into Banking and other industries.
    Now I am pursuing MS – Computer Science and planning to go for CFA or CPA.
    What is your suggestion? What should I opt for?

    • Meghan D says:

      It depends on what your ideal job/career looks like. A CFA and CPA can do very different things. Can you give me more details on where you see yourself working and what that looks like?

  • Bolajokospice says:

    This article has been of great help. Thank you. I am a 30 year old West-African with a bachelor’s degree in accounting and i am currently enrolled for the ACCA exams. I intend to relocate to the USA and i have been thinking of which designation to obtain, CPA or CFA since i found out ACCA is not recognised in the USA. I have also been considering whether to do an MBA or MAcc. in addition to a professional qualification. Kindly advise

    • John / Stephanie says:

      Hi Bolajokospice, thanks for your note and glad the article is useful. On whether MBA or Master in Accounting is better for you, it largely depends on your career aspiration. For example, if you want to go for accounting jobs esp in public accounting and taxation, then Master’s in accounting makes sense. If you aren’t too sure, or you may want to go into finance, then MBA gives you more flexibility. But then try to pick the better MBA programs. There are quite a lot of “diploma mills” that churn out MBAs. Those won’t be appreciated by recruiters and will therefore waste a lot of your time and money. Master’s in accounting tend to have less of this issue but again, pick carefully. Hope it helps! Stephanie

  • Vinit says:

    *Continued comment*
    PS : i have interest in valuation, equity research, investment banking.

  • Vinit says:

    Hi,
    I am from India. I am giving cfa level 1 and after finishing all 3 levels. My long term plan is to get the CPA as well.
    I couldn’t find anywhere the career opportunities/advantage for having BOTH the CFA and CPA.
    Can you please help me about the possible career fields in finance where i can get a advantage of having BOTH the prestigious degrees of finance as well as accounting.
    Thanks!

    • John / Stephanie says:

      Hi Vinit, I won’t say there is a specific job that requires both CPA and CFA qualifications, but it helps you stand out from the crowd and get the respect with two strong and complementary skills. But it’s an interesting post topic and we’ll write something on the opportunities in the future. Thanks for the suggestions. John

  • Yash says:

    I am an 21 year old Indian desiring to take CFA Level 1 in decmeber 2014
    I am a complete newbie to the world of finance and i have no job experience in any Field.
    I am fairly average when it comes to studying but i am good with numbers though.

    Would you suggest that i go through with CFA?

    and if i should is just reading schewser enough? i wont be taking any classes.

    Thanks

    • John / Stephanie says:

      Hi Yash, thanks for your note. I suggest that you take a look at materials of CFA level 1 and see if you are interested enough to study them for an extensive period of time. Note that Level 1 is the easiest (for most people at least). If you don’t find it interesting enough, it may not be a good idea to pursue CFA. Otherwise, I encourage you to give it a try.

      The other consideration is money. You can check out our discussion on CFA exam fees and related costs here:
      https://ipassfinanceexams.com/cfa-exam-fees/

      Many candidates self-study so you can do that too.

      Cheers
      John

      • Yash says:

        I am fortunate to say that money wont be an issue.

        the only issues i am facing are these

        1.the work exp. – should i go for exams and work ex toghther or just tackle one at a time?
        2. lets say i spent 6-7 years to earn my charter, would it be worth it?
        i mean would CFA alone be worthy enough to have a good quality of life ?

        sorry to bother you but i need all the info i can get since this is a mojr decision of my life.

        • John / Stephanie says:

          That’s good to know Yash.
          Most people have a full time job while studying for the CFA exam, so it is doable. It does take most of the leisure time away so this could be a consideration. The average number of years required by successful candidates is 4 years, so hopefully you don’t need 6-7 years for that. It will definitely burn me out if it took me that long.

          On your last question on whether CFA is worth it, it’s really a personal choice. It depends how important you feel like getting the CFA designation is for your career and your life. I would say, for me, it’s high enough for my career. Having said that, there are unemployed CFAs around the world due to many factors, so the designation cannot guarantee good quality of life. Cheers, John

  • Sneha says:

    Sir,
    I m CA. I m from India. I m coming to Boston with my spouse in August, as a dependent visa holder.
    I want to do job n also pursue further education life CPA or CFA.
    Please guide me what wil be better option, and can i also get maximum fees required for both CPA and CFA.

  • Hans says:

    Imprimis, this was very informative for an aspiring accountant about to take his test for entry into the AFM program at Waterloo. It clears up some misconceptions, reservations and unknowns I had previously.
    Secondly, and not as importantly, I must admit I giggled a little at “pubic accountant”. Just a little spelling error.

  • Anjani Swetha says:

    I done my mba – finance and marketing in the year 2010. I don’t have any work experience. Now I want to pursue cpa exam. Without any work experience, can we study cpa? Please guide me.

  • >

    Save up to $300 on Wiley Courses!  ​