What is the difference between a finance degree and an accounting degree? Both deal with various aspects of finance. Students of each field are expected to be proficient in business mathematics and analytics, and should have a good knowledge of financial regulations at the local, state and federal levels. However, the subjects taught in a focused degree program might vary widely. The career opportunities available to graduates of both degrees may also differ. An accountant’s skills are more likely to be highly specialized, while a financial analyst will have a strong working knowledge of markets, laws and investments.
When it comes to deciding between a finance degree and an accounting degree, it’s important to understand the consequences. These two disciplines are part of a group of subjects that fall under the FAME acronym, which stands for finance, accounting, management and economics. They are two of the most important business school disciplines in the world, and they include specializations in a wide range of fields. From forensic accounting and corporate finance to auditing and investment banking, the careers available for FAME graduates are highly rewarding. Continue reading to learn more about the differences between these two career paths.
A finance degree involves a large amount of coursework that focuses on mathematics, business skills, analysis and more. The degrees are quite rigorous and last for four years, culminating in a bachelor’s of science degree. Most students take on an internship with a local company in order to gain practical work experience during the course of their degree. These may be paid internships, while other internship programs provide college credit.
A finance degree graduate has many options available to them after their graduation. They may become financial analysts and provide highly useful guidance to companies looking to diversify their investments in the stock market. They might find success as financial managers who work with a team in order to ensure the financial success and well-being of their company. Most people who graduate with a bachelor’s degree in finance eventually go on to earn a Master of Business Administration (MBA) at some point in their career.
A bachelor’s degree in finance can be the beginning of a high-paying career in the financial sector. While finance graduates can immediately enter the workforce as analysts, advisors and consultants, they could also benefit by continuing their education at the postgraduate level. The bachelor’s degree in finance is a challenging degree that covers a large number of quantitative subjects. It requires precise analytical skills in mathematics, statistics, financial markets, derivatives, venture capital, private equity and other quantitative subjects. While there is some overlap between bachelor’s degrees in finance and accounting, the similarities fade as the courses become more advanced and specialized.
Accounting degrees at the undergraduate level are usually required in order to practice professionally in the field. Some colleges and universities are beginning to offer five-year programs that result in the graduate achieving a master’s degree in accounting. Courses include tax law, real estate law, mathematics, basic principles of accounting and more. Students may take on internships with accounting firms. This provides them with practical experience that accompanies their coursework. Finally, they must take and pass an examination in order to become a Certified Public Accountant (CPA). This allows them to practice within the field and offer their services to the general public. CPAs must maintain their active status by enrolling in continuing education throughout the course of their careers.
Ultimately, many people with accounting degrees go on to become registered accountants. Accountants are responsible for the development, maintenance and analysis of financial records. They may work for a specific company, a business or even as freelancers that help ordinary citizens understand and better handle their finances. Accountants are also responsible for preparing tax forms and ensuring that both individuals and businesses pay the right amount of taxes.
Accounting programs focus on money management, budget analysis, risk management, quantitative analysis, macroeconomics and microeconomics. The main difference between accounting and financial jobs is that accountants manage their clients’ existing finances while financial analysts try to improve their clients’ future earnings. Accountants are experts in financial auditing and budgeting as well as bookkeeping and tax planning. They work in specialized roles that include auditing, bookkeeping, budget analysis, payroll administration, credit control, risk assessment and treasury management. With an accounting degree, it’s possible to earn a high salary in the government, a corporate firm or a private practice as a freelance accountant.
Which Degree is Right for You?
Whether you go into finance or to an accounting school depends on the goals you have set for your education and your career. If you have a specific interest in global finance, then it may not be worthwhile to pursue a degree in accounting. Conversely, you probably will not get much out of a finance degree if all you want to do is become a CPA. However, every degree course is what you make of it. Aspects of both fields tend to overlap, especially where long-term financial planning is concerned. Students who want to demonstrate ambition and a drive to succeed may want to consider a double major in both fields during their undergraduate experience.
After learning about the differences between finance and accounting degrees and the careers available in each field, the right choice should become a little clearer. However, there are still other factors to consider, such as school ranking, location, personal interests, career advancement opportunities and further education. Students who plan to start working immediately after college may want to choose an accounting degree, especially if it leads to a Certified Public Accountant (CPA) certificate. These five-year bachelor’s degrees are popular among career-oriented accounting students looking to increase their earning potential after graduation.
Finance Degree Concentrations
From hedge fund management to insurance underwriting, the research concentrations of a finance degree are some of the most exciting subjects in the FAME disciplines. At the graduate level, finance students concentrate on more difficult material and build models of real-life scenarios in the banking and investment world. Some of the degree concentrations include quant specialization, financial trading, commercial banking and investment banking.
These degree concentrations require meticulous research and classroom learning as well as a thesis capstone project. The capstone project typically requires students to present their oral arguments to a select group of faculty members. Sometimes these arguments are also presented to the other students in the master’s program. Thesis projects are a requirement for both accounting and finance master’s programs, including online degree programs.
Accounting Degree Concentrations
Accounting degree concentrations cover a wide range of subjects, including tax advising, risk assessment, forensic accounting, payroll administration, financial consulting, bookkeeping, auditing and actuarial science. At the undergraduate level, accounting students can choose a business track, academic track or CPA track, which includes a year of certification training. Business-track accounting students receive the education and training needed to enter the workforce after graduation. Academic-track students can continue on to graduate school at the master’s or PhD level. After graduate school, accounting students can look forward to rewarding careers in government, business, research or teaching.
One big difference between accounting and finance is the employment outlook. While accounting jobs are projected to grow by 4 percent over the next 10 years, according to the US Bureau of Labor Statistics, finance jobs are projected to grow by 15 percent over the same time period. Four-percent growth is about the same as the national average for all occupations while 15-percent growth is much faster than the national average. There is a big difference in the median annual salaries of these two professions, as well. According to the BLS, the median income for accountants is $71,550 per year. For financial managers, it’s $129,890 per year. These median amounts reflect the earnings for all accountants and financial managers in the country. With special training and work experience, the earnings can be much higher.
The top jobs in accounting are:
- Anti-money laundering (AML) specialist
- Payroll clerk
- Risk analyst
- Financial auditor
- Internal auditor
- Tax specialist
The best jobs for finance graduates are:
- Financial planner
- Financial analyst
- Investor relations associate
- Budget analyst
- Credit analyst
- University professor
Employment in accounting is expected to rise and fall with the changes in the overall economy. In contrast, financial jobs will be tied to the health of the credit, banking and financial industries. CPAs will have the best job prospects among accountants, and Master of Finance graduates will have the best prospects in their field.
Licensing and Certification
In addition to a degree, many jobs in finance and accounting require licensing and certification. In finance, some jobs that require a license include investment broker, securities and commodities trader, real estate broker, financial analyst and financial advisor, depending on the state of employment.
A common license in the financial sector is administered by the Financial Industry Regulatory Authority (FINRA) agency. Some common certifications in finance include Certified Financial Analyst (CFA) and Certified Financial Services Auditor (CFSA). In accounting, the top certifications are the Certified Public Accountant (CPA), Certified Management Accountant (CMA), Certified Financial Services Auditor (CFSA) and Certified Internal Auditor (CIA). Getting certified after earning a bachelor’s or master’s degree can open many doors in both finance and accounting.
Master’s Degrees in Finance and Accounting
The two big master’s degrees in finance and accounting are the Master of Business Administration and Master of Finance. The MBA is a top choice for both finance and accounting students. Most accredited colleges in the US offer concentrations in both accounting and finance for MBA students. MBA programs typically take two years to complete and provide specialization that can increase employment opportunities.
While these programs are popular, another option is the Master of Finance or Master of Science in Finance, offered at most accredited business schools. The MFin or MSF degrees are usually easier to complete than the MBA. A master’s degree in finance can be completed in around one year of full-time enrollment.
When it comes to earning a PhD, business students have an advantage over students in other disciplines. That’s because business schools are always in short supply of PhD professors to teach their courses. Both finance and accounting PhD holders have excellent job prospects in academia. In general, there are more positions available for accounting professors than finance professors. With a PhD in accounting, opportunities for higher earnings and better employment prospects become much more attainable. Accounting is one of the few academic disciplines expected to grow at a faster pace than the rest of the economy, and accounting professors can take advantage of this rapidly growing demand.
Best States for Finance and Accounting Graduates
The states with the best employment prospects for accountants and financial managers are California, Texas, New York, Florida, Illinois and Massachusetts. The locations with the highest median annual salary for financial professionals are New York, Washington D.C., New Jersey, Delaware and Connecticut. The places with the highest median annual salaries for accountants are Washington D.C., New York, New Jersey, Virginia and California. The state with the highest median income for financial managers is New York, at $210,240 per year. The location with the highest median income for accountants is Washington D.C., at $103,930.
Industries Hiring Finance and Accounting Graduates
The industries hiring financial and accounting professionals are concentrated in the financial sector. They include the insurance industry, the savings and loans industry, corporate finance and accounting, government accounting, corporate budgetary analysis and tax accounting. The top employment destinations for accounting graduates include the Big Four accounting firms, the Internal Revenue Service and the thousands of smaller firms in need of full-time accountants on staff.
The Big Four accounting firms are Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY), and Klynveld Peat Marwick Goerdeler (KPMG). Top accountants from all over the world compete for positions in these firms. The top hedge funds for finance graduates include Bridgewater Associates, Renaissance Technologies, Man Group, AQR Capital Management and Two Sigma Investments. Some of the biggest investment banks hiring finance graduates are Goldman Sachs, Morgan Stanley, J.P. Morgan, Evercore, Centerview Partners and Credit Suisse Group. The world’s top finance graduates compete for high-earning positions at these prestigious firms, sometimes taking home seven-figure salaries, when bonuses and commissions are included.
For students more interested in making investments, working with venture capital or building start-up companies, a finance degree may be more appropriate. Both choices place a heavy emphasis on analytical subjects such as mathematics and statistics, so they can be very demanding. The first two years of accounting and finance programs typically weed out the students who lack the determination to complete these challenging degrees.
Choosing between an accounting degree and a finance degree can take time, patience and research. After completing a degree program, becoming certified and choosing a career, the next step is sending out resumes to all of the top firms. With either an accounting degree or a finance degree, potential earnings and employment prospects should be excellent.
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