CFA and CPA are two courses that are both recognized globally and is of the highest standard in their respective industries. Let’s try and understand each course in detail and then decide as to what suits you the best.
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WHICH ONE IS MORE SUITABLE – CFA OR CPA?
KEY DIFFERENCE BETWEEN CFA AND CPA EXAMS
WHICH IS MORE DIFFICULT – CFA OR CPA?
CFA AND CPA SUBJECTS
AVERAGE CFA SALARY/PACKAGE VS CPA SALARY IN INDIA
THE CFA + CPA COMBO
WHICH ONE IS MORE SUITABLE – CFA OR CPA?
Chartered Financial Analyst (CFA) as a career is advisable for people who want to make a career in portfolio management or investment banking and other related fields. It is organized by the CFA Institute headquartered in Virginia U.S.A. which was established in the year 1947. It is a globally recognized course and is of the highest standard in its industry. A CFA Charter is very highly respected and appreciated in the industry. Most of the career paths that that a CFA degree opens up are:
- Equity Research
- Investment Banking
- Mergers & Acquisitions
- Private Equity
- Corporate Finance
- Portfolio Management
- Consultants
- Financial Advisory
Certified Public Accountant (CPA) is a course that specializes in the field of Accountancy and Taxation. The CPA is similar to the Indian CA qualification, the only difference is that while Indian CA focuses on IND AS (Accounting Standards) the CPA focuses on the US GAAP (Generally Accepted Accounting Principles). So perusing CPA adds a lot of benefit if you are planning to work in the US or a US based Firm. CPA is organized and administered by the American Institute of Certified Public Accountants (AICPA) a body which is headquartered in North Carolina U.S.A. and was established in the year 1887. CPA also is recognized and respected across the globe and is considered of the highest standard in its industry. Once you have cleared all the papers of CPA with a minimum score of 75% in each paper you are eligible to apply for the CPA License also. Some of the career option that CPA opens up is:
- Internal Audit
- External Audit
- Tax Consulting
- Corporate Accounting
Conclusion – To sum it all up you should opt for CPA as a career option if you want to build your career more towards auditing and taxation related roles whereas CFA as a career option should be chosen by those who want to be in the investment based and capital markets related roles.
KEY DIFFERENCE BETWEEN CFA AND CPA EXAMS
| Criteria | CFA | CPA |
| Eligibility | Must be in the final year or have a bachelor degree/ 4 years of work experience in any field | Must have a minimum of bachelor’s degree through any English medium college or university with a minimum of 45%. |
| Exam Details | Level – I 240 MCQ Questions Exams held in June & December Level – 2 120 MCQ Questions Exams held only in June Level – 3 10 essay type questions and 60 MCQ Questions Exams held only in June All 3 levels have two session of 3 hours each: Morning Session of 3 Hours Afternoon Session of 3 Hours | There are a total of 4 papers all of which are online based: Auditing and Attestation- 90 Questions and 7 task based simulationsBusiness Environment and Concepts- 72 Questions and 3 written communication tasksFinancial Accounting and Reporting- 90 Questions and 7 task based simulationsRegulation – 72 Question and 6 task based simulations |
| Passing Rates | Level – I 42% Level – 2 45% Level – 3 52% | On an Average 50% across all four exams |
| Time taken | 2-3 Years | Can be completed easily within 1 year or even 6 months if you appear for all the 4 papers in one go. |
| Fees | $450 Registration Fees (Valid Throughout) $700/$1,000/$1,350 for each level depending on the time of registration The earlier you register the less you have to pay. | One time registration fees of $50-$200 depending on the state of jurisdiction and then $ 356 for each of the 4 papers. |
WHICH IS MORE DIFFICULT – CFA OR CPA?
As clearly seen in the passing rates CFA is more difficult in comparison to CPA. On an average about 50% of the registered candidates clear CPA exam whereas about 7% of the candidates clear all the 3 levels of CFA. In terms of course also, the course of CFA is much more lengthy and detailed in comparison to CPA.
CFA AND CPA SUBJECTS
In total CFA has 10 subjects for Level 1 & Level 2 and 7 subjects for Level 3
The CFA exam question paper covers multiple choice questions for level 1 & 2, and multiple choice and essay writing both for level 3 exam.
CPA has a total of 4 subjects and hence one paper for each subject.
The CPA exam question paper cover multiple choice questions, written communications and Task based simulations for all 4 papers.
| CFA | CPA |
| Ethical and Professional Standards (Level 1,2,3) | Auditing and Attestation (AUD) |
| Quantitative Methods (Level 1,2) | Business Environment and Concepts (BEC) |
| Economics (Level 1,2,3) | Financial Accounting and Reporting (FAR) |
| Financial Reporting and Analysis (Level 1,2) | Regulation (REG) |
| Corporate Finance (Level 1,2) | – |
| Equity Investments (Level 1,2,3) | – |
| Fixed Income (Level 1,2,3) | – |
| Derivatives (Level 1,2,3) | – |
| Alternative Investments (Level 1,2,3) | – |
| Portfolio Management (Level 1,2,3) | – |
AVERAGE CFA SALARY/PACKAGE VS CPA SALARY IN INDIA
| Certification | CFA | CPA |
| Level 1 | 3- 4+ Lakhs P.A. | – |
| Level 2 | 6- 10+ Lakhs P.A. | – |
| Level 3 | 12+ Lakhs P.A. | – |
| Charter Holder/ Certified | 12-18+ Lakhs P.A. | 15+ Lakhs P.A. |
As you can see, salary wise CPA and CFA Jobs pay relatively the same amount. A major benefit of CFA is that recognition starts from Level- 1 itself and hence you can start working simultaneously while preparing for your Level 2 & 3, but in case of CPA you need to clear all 4 papers for recognition and job to start. Although it has been observed that a Licensed CPA makes about 15% – 20% higher than an Indian CA mainly due to the global validation of CPA.
THE CFA + CPA COMBO
Right after college pursing both the courses simultaneously is not recommended as there is very little or no upside pursuing both, as both are two very different courses and are from different industries. Also both are also very expensive on the pocket.
Hence , maybe a couple of years down the line you may consider doing the other but pursuing both the courses right after college will not yield you any extra returns. This may sound a little wrong but that is the ground reality, focus on any one initially and save up that money and time for future.
