Accounting or Finance? accounting, question, library, opinion, finance

ishfaque

I’m just gonna throw this out there.  Sound off if you have an opinion.  If you agree, say so.  And if you don’t agree, that’s cool too.
Not too long ago, I was talking to a student at the library where I study.  She was impressed by the fact that I had an MBA, CPA, and working on the CFA.  She was a finance student, but was considering a double-major in accounting.  She asked me two questions:
1.  Which is the harder exam?  CFA or CPA?  (This was the easy question.) I told her that there was absolutely no question–CFA is harder.  CFA is much harder.  Each level of CFA is about as hard as all parts of the CPA exam combined.  Anybody who says something different has not taken both exams.
2.  Which is better?  Finance or Accounting?   (This was the difficult question.)
I think that all finance students have dreams of being the next Jim Cramer, or Warren Buffett, or George Soros, or John Meriwether, etc.  We all have dreams of working on the NYSE screaming “Buy!  and Sell!”  We think we’ll eventually get a corner office on the 50th floor of some building in lower Manhattan, riding in our limousine to our private jet, which will take us from vacation home to vacation home in our Armani suits and Patek Philippe watches and Mont Blanc pens.  Life for finance majors is meant to be exciting.
Accountants, on the other hand, lead a very boring life.  The life of an accountant is general ledgers, adding machines, journal entries, and reconciling balance sheet accounts.  We wear glasses and pocket protectors.  Our dream job is one where you get to create schedules, then make journal entries, then reconcile the accounts.  (Rinse and repeat on a monthly basis.)  If you’re a tax accountant, then you get to create a working trial balance, then put the numbers into a software package that will create a tax return for you.  The life of an accountant is meant to be very boring.
This being said, I told her that I think accounting is a better career choice for 95% of all graduates.  In my (very limited) experience, accountants will make more money and have better job security than their finance counterparts.  Sure, this is not true at the upper levels, or for those who actually do work in a major financial center.  But unless you graduated from a top-50 school and had a 3.5+ GPA, then your resume will probably find the working end of the shredder very quickly if you apply at Goldman Sachs in New York.
I’m not trying to discourage those who want to pursue the CFA charter.  But I can tell you this from personal experience–the CFA charter is just as likely to collect dust as it is to earn you six figures.  The CPA license will certainly open doors for you.  CPA firms like CPA’s, and they’re always hiring–no experience necessary.  You don’t see many jobs at JP Morgan for ”US Equity Analyst” that say ”Will hire somebody straight out of the local state school.”
And the CPA exam will probably take about 250 hours over the course of a year to study for.  The CFA will take about a thousand hours over the course of three years–if you’re lucky.
In my (very limited) experience, those who didn’t go to Harvard and get a 4.0 GPA will more than likely get a job as Credit and Collections Manager at the local manufacturing firm.  You might also get a job in a regional bank as a “Collateral Analyst Cash Accelerator”, whatever that is.  But I think the average accountant is a far more lucrative profession than these.  The pay is better, and the potential exit opportunities are better.
Just some thoughts on the passing scene.  For those of you who are on the bubble about whether to go the Accounting or Finance route, take from this what you will.

luda002

I started my college career as an accounting major. Even if you are debating between finance and accounting, you would be an idiot not to take 2 or 3 accounting courses. Accounting is the basic business language and having some fundamental understanding (the more the better) is incredibly beneficial.  That being said, I made the switch after I took my first finance course. Finance is much more broad, math-oriented, and interesting in my opinion.
As far as careers go - if you’re looking for security, go accounting hands down.  In my opinion, if you chose accounting, you’d be incredibly mistaken not to go to a 1 year grad program and continue on to get your CPA. CPA’s are in demand at the very least because they have a technical understanding of something that is REQUIRED by businesses and individuals to comply with standards and regulations. As great as that is, it is also what turns me off.  
Salaries (coming from someone entering the job market and comparing to friends) - Starting off as simply a business analyst doing mostly accounting type work for the first couple of years I will be paid slightly more than the accounting majors in my school (even with CPA’s) going to the big four.  The company pays well, yes, but I would easily say that the highest earners coming out of our school are going into a finance role or had finance degress. On average though, the accounting majors are definitely outpacing the rest of the business students.
Long term - I always worried about doing accounting and then getting stuck into doing tax or audit or w/e. I really think it depends on the kind of person you are. A few alum I know started their career at the big four and then went to work for one of their clients directly and now have management positions. My supervisor during my internship came from a Big Four firm and is really not doing any “accounting” type work.  Many, many accountants leave the Big Four to go on to more managerial/business analyst type roles. So, I don’t think you will be stuck doing “accounting” for the rest of your life.  You certainly can if you want but if you have the right motivation and work ethic you can do a lot with accounting.
It seems like I’ve kind of gone back and forth. What I’m really saying is just depends on what you want to do and how much confidence you have in yourself as a person. I think I have a pretty good understanding of business and do better than most of my peers in class and in an actual corporate setting.  I also think I have the kind of personality to where I can leverage my understanding and competencies into a broad career path. I’m not trying to brag or anything, just trying to make a point. If you aren’t as confident or are looking for more security, go accounting and you will get that security if you’re half decent at what you do. I could go on and on, but when it comes down to it, I’m glad I chose finance and I do not think I will regret it.
If you want a career in investments/money management, obviously go Finance. If you don’t really know what you want to do, but you know you want business, go Accounting - it will serve you well.
I don’t want a career in investments or money management (not right now anyway) and yet I went Finance and am going for my CFA. Why? Idk, I’m weird. I just like the stuff, quite a lot. Anndd.. I think I’ll do just fine with the finance background, fingers crossed.

IAmNeil

TLDR version for both of these posts: Unless you’re the cream of the crop, accounting will probably be a more secure and financially rewarding career for most people.  Both the entry and exit opportunities in public accounting are better–especially if you can land at a Big Four accounting firm.

sabre

the only real upside for being in accounting is stable employment and if you end up making partner of a large practice and then you make the big bucks.
The downside is the work makes you hate your life, long tedious hours doing dull work, your salary and bonus both suck, and you may be looked down upon as not good enough to do finance.

dreampak

Thats fine you disagree. In fact I applaud you for not being a dbag in your reply like many other new folks here. Thats the point of a forum, people sharing their points of view.
I can agree about your argument that on average, finance doesnt pay that well. the truth is there are a lot more back office functions then there are rainmakers so obviously the average pay will skew downward much more. Just look at total average salaries and you’ll see even engineers will have much higher starting averages vs finance.
but 1 thing you need to think about is that people don’t generally go into finance thinking oh yes I’m going to work in the back office. there are not enough jobs for everyone to be on the revenue generating side and so therefore people end up taking back office jobs, or finance jobs in small mid size companies.
I also do agree on the whole there should b much less finance folks. But again its the fundamental problem where people only see the huge potential payout of landing that awesome job . it’s the same reason why people spend money buying the big payout lottery tickets even though the chances of landing it are slim to none. people buy the tickets shooting for the top and it’s generally the same with finance. I say generally because there are people who want to do back office, and some smartass will probably use it as an argumentjust for the sake of argument

LPoulin133

Iteracom, you and I disagree on a lot of things a lot of the time.  But I always respect your opinion, and you don’t put other people down for disagreeing with you.  That’s why I like you.

profil

Finance is an umbrella term because there are so many job functions within the industry. It’s the equivalent in saying, “I work in Science”.

Howd

i sense some bromance going on here.

malbec

hey greenman,post up your salary with your 2.1% year over year salary increase and then get back to us on accounting vs. finance.

grharmeyer

I’d rather kill myself then be an accountant(again).