You’re probably one of the thousands of aspirants which has the chance (or would like to have one) to pursue one of two: CPA and CFA. Both are good career routes, no doubt about it. But if you choose one which should be it?
There’s no definite answer.
Yes, there’s none.
Forget about what other ‘wannabes’ say that CPA or CFA is better than the other.
The choice will vary per individual. Here’s what you should be thinking about: “Given my skills and knowledge, which license is more appropriate for me?”
To help you decide, this article will provide you the necessary information you need regarding these two certifications.
Let’s get started.
Which is harder?
Come on, don’t expect a general answer to that. Let’s have a more objective way of answering that. Let’s take a deeper look at each one, and then you decide.
Based on the requirements, it will take you about 6 years to be a CPA.
Typically, an accountancy student will get 30 academic hours.
So, for a 3-year bachelor’s degree, he /she will have 90 hours.
So, where will he/she get the remaining 60? Through a 2-year master’s degree.
Those 5 academic years plus 1 year (for the preparations and the exam itself) translates to about 6 years.
For the CFA Program, you’ll need about 8 years.
The CFA Institute requires you are a graduate of, or at the terminal year of at least a four-year course (or equivalent, i.e., Bachelors plus a Master degree).
In other words, that’s 4 years. For another 4 years, you may concurrently take the three exams, at the same time earn the 4-year work requirement of the Institute. So, all in all, that’s 8 years.
Review programs are those review sessions conducted by parties unrelated to AICPA and CFA Institute. Some applicants who can’t study on their own need these classes to refresh their knowledge of the subject.
CFA Fees could vary from US$650 to US$1,280 depending on how early you have registered.
You can get the cheapest rate when you avail of it about 9 months before the examination month.
The examination fee covers eBooks of the curriculum, an interactive study planner to guide and track your exam preparation, practice and mock exams and a mobile study app to access the mentioned materials.
On the other hand, CPA fees are perceived to be lower.
Got a decision already?
If none yet, then you may want to go back to the previous paragraphs. Take time to think; this is for your future, after all.
If you already have a decision, then, proceeding with this article is the next best thing to do!
Laid before you are two separate how-tos on becoming a CPA or a CFA. Go on, choose your side.
How do you become a CFA?
Here’s a step-by-step process you can take to pass the CFA program.
Step 1: Take an undergraduate education
Any course would do. Nonetheless, taking a finance course will increase your chance of passing the examinations.
In choosing a degree, you may refer to the following table. The bigger the font, the more relevant it is to the CFA Program.
Of course, this illustration is non-exhaustive. There are other different courses you can take. You may always refer to the course syllabus to help you out.
Step 2: Enter the investment industry
After graduation, take a job that will expose you to investment products.
Why is it necessary? To improve your knowledge about finance?
It’s not the only reason.
To be a Chartered Financial Analyst, you have to gain four years of professional experience involving investment decision-making processes.
That’s a lot of experience, right? Therefore, starting your finance career while concurrently taking the CFA Program will shorten your waiting time.
Step 3: Apply for the CFA Level 1 examination
When you are already in your final year of your undergraduate course, you are already allowed to take Level 1.
Take note that there will only be two exams per year for Level 1, one in June and one in December. At the same time, registration ceases months before the exam. Check the CFA website for the deadlines.
Can’t afford the prices? Well, there’s a good news for you. There are scholarships available for those that can’t pay the fees. Try your luck!
Step 4: Review for the examination
As said, there are study materials and practice exams included in the registration prices. You can opt to self-study, or you can enroll in some third-party review providers.
One tip: don’t think this is a cost, but rather, an investment. Investments provide future benefits unlike costs. If you view your payment as an investment, it will be easier for you to shell out some cash!
Step 5: Take the CFA Level 1 examination
This will be your entry point to the CFA world. But don’t take this one too easily.
Even though it’s the first one, it’s not a proof that it’s easy. Actually, it’s a difficult one. Just look at how many topics it covers.
If you got hold of one of the books for this program, you’ll get to realize how many subjects you’re going to cover!
The questions will all be the multiple-choice type. Questions are made tricky to confuse unprepared candidates.
If you are trying out practice questions, don’t focus on memorizing the answer, but rather on how to answer that type of question.
Step 6: Prepare for the CFA Level 2 and level 3 examinations
Though you are yet to pass the Level 1 Exam, it is still good to have a glimpse of Level 2 and 3 as well.
Level 2 will cover the same topic areas as Level 1, but the focus this time will be on Asset Valuation and Application and Analysis.
Level 3 will be all about Portfolio Management and Synthesis and about Evaluations. Questions will involve essay questions.
How do you become a CPA?
Should you opt to become a Certified Public Accountant, then, here’s a guide for you.
Step 1: Take an accountancy course.
You cannot just take any business or finance-related courses and expect to be allowed to take the examination after your graduation. Take an accountancy course. Take an accountancy course.
Did I say it three times already? Yes. That’s how important it is.
There are hybrid degrees that offer an accountancy course coupled with some major on other business-related courses. That’s fine for as long as all subjects in accounting are covered.
Step 2: Take a master’s degree related to accounting.
As stated earlier, accountancy courses typically cover only 120 academic hours, way below the 150-hour requirement of most CPA state boards. Take a master’s degree to cover up the deficiency.
Step 3: Find a state you can qualify
States differ in their credential requirements. Before anything else, find a state where your qualifications meet theirs. There are some quality resources you can use to find a state for you.
Step 4: Send your transcripts to a foreign credential evaluation agency
Your requirements will not be evaluated by the state itself, but by an external evaluation agency. States usually provide a list of agencies you can choose from.
But there are cases wherein you are not required for evaluation. For example, if you are Indian student who graduated from a US university, then you will no longer be subjected to evaluation. Read carefully the guidelines of the CPA state board you have chosen.
Step 5: Pre-examination activities
You’ll know you are approved if you received a Notice to Schedule (NTS).
You then have to choose a testing center. You can take the examination in a state different from where you registered from. As of September 2014, Indians and U.S. citizens are allowed to take the exam at some designated sites in the Middle East.
Step 6: Pass the CPA exam!
Step 7: Get a Relevant Experience
Determining what a ‘relevant’ experience depends on the state. Some allow general accounting jobs, but some will only recognize auditing experiences. So again, go back to the requirements of your state in order to not get confused.
Another thing, to remember, it is important the job experience can be verified. Work for legitimate and sound institutions.
On a final note…
This article will serve as your guide; taking action is on you. In writing, the challenges are as easy as a 1000+ word article, but in real life, it will be hard; harder than you think it is.
Confidence and a dream are what will take you there. Are you strong enough? Go on and challenge yourself!
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