Finance vs Accounting: What’s the Difference?
Many undergraduate business programs are based on what are known as FAME subjects: finance, accounting, management, and economics. Business students will gain a good working knowledge of all four subjects, but some may want to specialize in one of these areas.
Two common areas where students can choose to focus or continue their education are finance and accounting. These fields have several things in common, and are often grouped together, so that people with no business education may wonder: what exactly is the difference between finance and accounting?
What is finance?
Between finance and accounting, finance can be seen as the more general subject of the two fields. The study of finance provides students with a solid foundation of knowledge of banking, economic and financial markets. If you choose a business degree with a finance concentration, your courses will explore topics related to corporate finance, private equity, venture capital, financial planning, risk management, and more. An important emphasis will be the study of markets, how they work and how they fluctuate, and how to manage and mitigate the risks inherent in investing wisely and effectively.
Future businessmen who study finance will have the opportunity to acquire skills in communication, quantitative analysis and good practices for the industry. Successful finance professionals understand the stock market and other types of investing and are skilled at understanding and interpreting mathematical and statistical data. Quantitative skills are important, but so are good communication skills, knowledge of human behavior, and the ability to work effectively in a team.
What is bookkeeping?
Studying accounting prepares you to become an accountant, work in the field, or one of the many adjacent career paths. Course content in an undergraduate accounting program may include financial accounting, tax accounting, managerial accounting, and forensic accounting. Students will also study business strategy, risk management, information systems, quantitative analysis, and more.
Successful students should gain an understanding of current regulatory and business landscapes and a good grasp of the business world, according to the American Institute of CPA.
Job prospects in finance
Education in finance opens doors to many business careers. People with a finance degree go on to work in banks, hedge funds, and investment firms, among others. Finance can be a path to becoming a financial advisor or a personal financial advisor. A CERTIFIED FINANCIAL PLANNER ™ must pass the CFP® exam upon completion of program courses. Financial analysts and managers are needed in almost all types of businesses, from local family businesses to global businesses.
This flexibility makes finance a great choice for students who want a smart educational investment. According to the Bureau of Labor Statistics (BLS), employment in the business and financial sectors is expected to increase by 5% through 2029.
Job prospects in accounting
Accounting is a bit more specialized field, although, like finance, there are accountants and people with an accounting background who work in all types of businesses and organizations. The most obvious and well-known career path is becoming an accountant, a job that may require an internship period, continuing education, certification, or a combination of these.
You can start your journey to becoming a professional accountant with an accounting degree or even a general business degree, although a company may wish to provide you with on-the-job training or education. Most states require you to complete 150 hours of college education before you can take the chartered accountant exam, which is 30 hours more than a typical four-year degree, according to the BLS.
Studying accounting can lead to more specialized accounting roles, such as actuary, auditor or financial examiner. According to the AICPA, people with an accounting background can also be frequently found as bookkeepers, tax advisers, and payroll administrators. Other roles include working for government agencies, as an internal or external auditor reviewing an organization’s finances for cases of waste or fraud, or as an IT auditor evaluating an organization’s IT system controls. company to ensure that financial data is reliable, according to BLS.
Accounting is a good choice when it comes to employment prospects in the future. According to the BLS, the employment of accountants and auditors is expected to increase by 4% through 2029. Accountants are sought after when the economy is strong, as economic health and growth means more people are needed to manage. and oversee financial records. A stronger regulatory environment is also good news for accounting job prospects, as as regulations tighten, more people are needed to enforce them.
Continuing education in finance and accounting
Many jobs in finance and accounting require a bachelor’s degree as a minimum. There are also many more advanced degrees and certifications that you can earn over the course of your career if you want to gain a more specialized or in-depth understanding of your field.
In finance, there is the master of finance with concentrations such as corporate finance and investments.
In accounting, you can pursue graduate studies, including a master’s degree in accounting with concentrations in taxation, auditing, forensic accounting and more.
Additionally, people who have studied finance or accounting are well prepared for master’s of business administration (MBA) programs, many of which offer concentrations in finance or accounting.
Susan Bogle is a graduate student recruitment and marketing specialist. Follow her on Twitter @ Suze1776 or connect to LinkedIn.