The differences between Finance and Accounting - Explained (2024)

Both accounting and finance lead to lucrative job prospects in growing fields, and both involve managing money and financial documents. However, the two careers differ in several ways, as will be discussed below.

Understanding the difference between accounting and finance can help students who are trying to decide which degree will best meet their interests and career goals. This page explores the differences between accounting and finance degrees, including potential career paths and salary opportunities for each.

Accounting VS. Finance

Accountants create financial reports and record financial transactions. For example, public accountants prepare tax returns for individuals and businesses, managerial accountants analyze an organization's financial health, and forensic accountants investigate financial documents to uncover illegal activities. In general, accountant jobs emphasize recording and reporting the flow of money through financial statements.

Professionals in finance focus less on reporting and more on managing an organization's money. They research and direct an organization's financial transactions, acting as money managers. Financial managers and financial advisors, for instance, oversee an individual's or organization's assets and liabilities, helping clients reach their financial goals.

Both accountants and finance professionals work for financial services organizations, businesses, and government agencies. However, they provide different services for their clients. For instance, while you can visit an accountant for help with your taxes, you might visit a financial advisor to help save for retirement. Additionally, while organizations rely on accountants to track cash flow and ensure compliance with tax regulations, they may turn to finance professionals to manage monetary resources.

Education Requirements and Skills

Accounting majors often take finance classes, and finance majors usually take accounting classes. However, prospective students should understand the difference between accounting and finance degrees, including the educational requirements and skills needed for each career path.

Many accounting careers require a bachelor's degree for entry-level positions. In addition, Certified Public Accountants (CPAs) must complete 150 postsecondary credits to qualify for a CPA credential -- the equivalent of earning a bachelor's degree and a master's degree in accounting. A master's also helps accountants pursuing management-level careers in their field.

Similarly, a bachelor's in finance meets the entry-level requirements for many finance job titles, including financial analyst, financial examiner, and personal financial advisor. Professionals seeking career advancement -- particularly financial managers -- often benefit from a master's degree.

Accounting and finance jobs both require a good eye for detail, strong analytical abilities, and excellent communication skills to provide information to clients.

Careers

The available career paths for accounting and finance graduates highlight the differences between accounting and finance. The lists below describe a few common job titles in each field.

Careers in Accounting

• Certified Public Accountant:CPAs create financial documents for public disclosure, including tax returns and balance sheet statements. They may work for individuals, corporations, and government agencies. CPAs must complete a licensure process to earn this title -- licensing requirements differ by state.
• Forensic Accountant:Forensic accountants investigate financial documents to uncover illicit activities, including tax fraud, embezzlement, and other illegal financial transactions. Many forensic accountants work for law enforcement agencies and testify as expert witnesses during trials.
• Management Accountant:Management accountants analyze an organization's financial documents to provide information for business managers. They evaluate budgeting goals, audit financial performance records, and plan for business expenses.

Careers in Finance

• Fund Manager:Fund managers oversee a fund's portfolio, its investment strategies, and its trading activities. They often manage pensions or mutual funds and receive a percentage of the fund's profits as part of their compensation.
• Risk Analyst:Also known as risk managers, these workers attempt to limit the damage caused by financial loss or market changes. They apply risk analysis techniques to measure an organization's financial risk and use strategies to manage exposure to financial harm.
• Portfolio Manager:Also called investment managers, these professionals create and apply investment strategies for clients, including individual investors and organizations. They analyze market performance to maximize returns for their clients.

Is Accounting Right for Me?

Is an accounting degree a good fit for your skills and interests? Accountants pay close attention to detail and possess strong analytical abilities. If you answer yes to the following questions, there's a good chance you might thrive in many accounting careers.

• Are you able to carefully follow rules?
• Are you accurate and reliable?
• Do you have a strong attention to detail?
• Are you good with numbers?
• Do you thrive when you have a routine?
• Do you have strong analytical skills?

Take the Next Steps

• Explore Accounting Degrees:Learn more about accounting degrees -- including bachelor's and master's degrees in accounting -- and admission strategies for top accounting programs.
• Explore Accounting Careers:Research career paths for accounting graduates, including management accountants, forensic accountants, and CPAs. Learn about the salary potential and projected growth in accounting.
• Explore Accounting Jobs:Find accounting jobs that fit your skills by visiting the Accounting.com jobs board, which posts openings from across the country.