Accounting and finance may be closely related fields, but they focus on different parts of an organization’s fiscal operations and well-being.
Essentially, accounting is concerned with tracking and reporting the financial transactions of a business or organization, according to Salary.com. A company’s finance department, on the other hand, focuses on the importance of investments and asset allocation.
When deciding whether to pursue an accounting or a finance degree, prospective students should understand the differences in the programs and the eventual career paths. They should also consider which financial function interests them most, as well as such factors as their personality, skills and career goals.
Professionals seeking a future focused on financial theory, investments and financial analysis may find a master’s in finance degree more applicable to their goals.
For those interested in the detailed work of maintaining budgets and financial records, or who aspire to earn their Certified Public Accountant (CPA) license, an advanced degree in accounting can be a satisfying choice. An online Master of Accountancy program can prepare graduates for a variety of career options in the field.
The Difference Between Accounting and Finance
The American Institute of CPAs (AICPA) defines accounting as the “recording and reporting of financial transactions, including the origination of the transaction, its recognition, processing, and summarization in the financial statements.”
The AICPA notes that the financial information that accountants prepare enables organizations to make well-informed business decisions. When accountants properly carry out their responsibilities, decision-makers have the information regarding financial activity that they need to steer their organizations in the right direction.
The U.S. Bureau of Labor Statistics (BLS) notes that accountants can:
- Work as private, cost, managerial, corporate or industrial accountants
- Specialize in auditing, tax or consulting
- Work in accounting for government agencies
- Work as external and internal auditors
In contrast to accountants, individuals who work in finance, for example as financial managers, focus on an organization’s financial health. Individuals with financial management expertise can oversee investments, generate financial reports and develop long-term strategic financial goals for an organization.
The BLS notes that financial managers can work as:
- Financial officers
- Risk managers
According to the BLS, financial analysts who focus on assessing investment performance can work as:
- Fund managers
- Securities analysts
- Portfolio managers
- Investment analysts
Accountant Job Responsibilities
In searching for the right role for you, it can be helpful to drill down to the job responsibilities of accounting vs. finance professionals.
The essential responsibility of an accountant is to keep track of every dollar a company spends and why. As part of the position, accountants prepare financial records, including internal corporate statements regarding income, balance and cash flow. They also do reports for tax purposes and may perform audits.
“Accuracy, precision and specificity is key to the field, since companies are often required to produce accounting reports in specific formats and even internal reports need to be correct and specific to be useful,” Pocket Sense notes.
Accountants, particularly CPAs, also have a legal responsibility to be ethical in their work, which can affect not just their clients but also entire companies as well as their boards and investors.
Investopedia, citing the Enron scandal as an example of CPAs failing to adhere to an ethical code, notes that “while consulting at Enron, Arthur Andersen (Company) CPAs did not maintain independence and performed both consulting services and auditing services, which violates the CPA code of ethics.” Company executives and CPAs faced charges as a result.
Accountants and CPAs may work for a wide variety of employers, from local accounting practices to multinational CPA firms. CPAs may also opt to set up an independent practice.
According to the AICPA, accountants may work in areas as diverse as financial accounting and reporting, management accounting, financial analysis or treasury/cash management. They may also specialize in fields such as financial forensics, business valuation, information technology (IT) consulting or personal financial planning. Other accountants may choose to work in government at the local, state or federal level.
CPAs — accountants who have at least two years of accounting experience and 150 hours of education and who pass the demanding CPA exam — often move into executive positions, such as controller or chief financial officer.
Master’s in Accounting Salary
The median annual salary for accountants and auditors was $73,560 in 2020, according to the BLS. The job outlook is on par with the outlook for all occupations: Employment in the field is expected to increase by 4% from 2019 to 2029, the BLS notes.
Finance Professional Job Duties
One approach to comparing accounting vs. finance is to look at the educational focus of the two disciplines. While an accounting education is very specific, coursework for a master’s in finance might include financial theory, math, quantitative finance, investment, and financial reporting and analysis, according to Investopedia.
Although finance professionals might also sit for the CPA exam, most opt to obtain the Chartered Financial Analyst (CFA) designation instead. The CFA, a crucial certification for investment professionals, requires at least 48 months of relevant work experience as well as passing a rigorous exam.
Those with a graduate degree in finance might work as actuaries, budget analysts, credit analysts, financial planners or investor relations associates. In most capacities, they provide individuals and companies the in-depth knowledge necessary to make financial decisions.
An advanced degree in either accountancy or finance can provide a foundation for a successful career in the financial field. Prospective students should consider their skills, interests and preferred career paths when deciding on a graduate program.
Master’s in Finance Salary
Salaries vary based on job titles, job locations and years of experience. For one typical career path –– financial analyst –– the median annual salary was $83,660 in 2020, according to the BLS, which projects employment in this segment of the job market to grow by 5% from 2019 to 2029.
The BLS reports that the median annual salary of financial managers was $134,180 in 2020, and it projects 15% job growth from 2019 to 2029.
Setting a Course for a Rewarding Career
Making the choice to work in accounting vs. finance comes down to an individual’s preferences and goals. Both fields offer rewarding work and the potential for advancement and increasing responsibility. Individuals who are interested in pursuing careers in accounting and finance can benefit from exploring programs, such as University of North Dakota’s online Master of Accountancy, which helps prepare graduates to sit for the CPA exam and position themselves for a variety of careers in accounting. Embark on a path toward finding your professional niche today.