Deciding on a career path in the financial industry can be a challenging task, especially when you have to choose between accounting and finance. Both fields offer numerous opportunities for lucrative careers, but it's essential to understand the differences between them to make an informed decision.
In this guide, we'll explore accounting and finance degrees, focusing on the key differences between them to help you select the right path for your career.
Understanding the Basics
Accounting and finance are two distinct fields that are often confused with each other. Knowledge of both is essential for a successful business, but they serve different purposes.
Accounting
Maintaining financial accounts, such as budgets, audits, and taxes, is known as accounting. Accounting professionals focus on managing a business's financial reports and cash flow, performing tasks like analyzing financial statements, calculating taxes, keeping financial records organized, and recommending actions to increase profits and reduce costs.
Finance
Finance involves analyzing financial data to manage investments and find profitable opportunities. Professionals in this field guide businesses and individuals on how to spend money for profit, examine economic and business trends, evaluate financial statements, and assess management teams.
Degree Differences
Both finance and accounting degrees are valuable in the financial industry, but they differ in their study focus. Read on to understand the differences.
Accounting
When considering a degree in accounting, several options are available to students. The most common degree programs are Bachelor of Science (BS) in Accounting, Master of Science in Accounting (MSA), and Master of Business Administration (MBA) in Accounting.
BS in Accounting programs require four years of study and cover financial accounting, managerial accounting, auditing, taxation, and business law. MSA and MBA in Accounting programs are designed for students who have already completed a bachelor’s degree in accounting or a related field.
MSA programs typically take one to two years to complete and provide students with advanced knowledge of accounting and finance, while MBA in Accounting programs require two years of study and provide students with a broad business education focusing on accounting. Prerequisites for these programs typically include foundational courses in accounting, business, economics, and mathematics.
Finance
When it comes to pursuing a career in finance, there are several degree options available. Two of the most popular are a Bachelor of Science in Finance and a Master of Business Administration (MBA) with a concentration in finance.
A Bachelor of Science in Finance is an undergraduate degree focusing on finance fundamentals and provides students with a comprehensive understanding of investments, financial markets, and financial analysis. An MBA with a concentration in finance is a graduate degree that builds upon the foundational knowledge of finance and focuses on advanced topics such as corporate finance, risk management, and financial modeling.
While a bachelor’s degree in finance can be completed in four years, an MBA typically takes two years. Additionally, pursuing an MBA usually requires several years of work experience and prerequisite courses in finance, accounting, and economics.
Career Opportunities
Choosing between an accounting and a finance degree can be tough, as both fields offer promising career opportunities. There are a variety of accounting jobs available in CPA firms, public accounting firms, corporate businesses, finance companies, and tax agencies.
On the other hand, finance jobs are commonly found in commercial banks, credit unions, mortgage institutions, finance companies, and regulatory agencies.
Accounting
Here are some of the many job opportunities in the accounting field:
- Accountant: An accountant manages financial records, prepares tax returns, and ensures compliance with financial regulations.
- Auditor: An auditor is responsible for reviewing financial records to ensure accuracy, reliability, and compliance with accounting standards and regulations.
- Payroll administrator: A payroll administrator is responsible for processing employee payroll, managing benefits and deductions, and ensuring compliance with tax laws and regulations.
- Risk assessment: A risk assessor identifies and evaluates potential business risks, develops risk management strategies, and ensures compliance with regulatory requirements.
- Tax advisor: A tax advisor is responsible for providing expert advice on tax-related matters, helping clients minimize tax liability, and ensuring compliance with tax laws and regulations.
Finance
Common jobs in the field of finance include
- Commercial banking: Commercial bankers work with businesses to provide loans, manage accounts, advise on financial strategies, and facilitate financial transactions.
- Financial consultant: Financial consultants help clients manage their assets, plan for retirement, invest in stocks, bonds, and other securities, and make informed financial decisions.
- Financial trader: Financial traders work for banks, hedge funds, and other financial institutions and use their expertise to make informed trading decisions.
- Hedge fund manager: Hedge fund managers are responsible for overseeing investment funds that pool money from high-net-worth individuals and institutional investors.
- Investment banker: Investment bankers help companies and governments raise capital by issuing and selling securities such as stocks and bonds, as well as providing financial advice to navigate complex financial transactions.
Skills and Traits for Success
When it comes to choosing between an accounting or finance degree, there are certain skills and traits that would help you succeed in these fields.
Accounting
If you want to pursue a career in accounting, it is essential to have a diverse range of skills. These skills include:
- Analytical and critical-thinking skills: You have to analyze information, identify discrepancies, and propose remedies, making these skills a must.
- Communication skills: You must possess effective communication skills to listen and address the viewpoints and issues of clients, managers, and other relevant parties. Additionally, you must be able to effectively convey your findings and conclusions both in written reports and during meetings.
- Detail-oriented: When compiling and examining documents, you must be attentive to small details.
- Math skills: You need to be able to scrutinize, contrast, and decipher numerical data. You will need to apply complex mathematical techniques like calculus and statistical analysis to accomplish these tasks.
- Organizational skills: You need to possess excellent organizational abilities to manage various financial documents of your clients.
Finance
Similarly, for a career in finance, you need to possess several skills, including:
- Analytical skills: You need to assess various types of data to make profitable investments.
- Communication skills: Clients expect financial professionals to have the ability to communicate their suggestions clearly.
- Computer skills: You must be proficient in utilizing software programs to evaluate financial information and patterns, establish investment portfolios, and predict future outcomes.
- Decision-making skills: To provide recommendations on securities, you need to come to conclusions about whether to buy, hold, or sell.
- Detail-oriented: When examining a potential investment, you must be vigilant and note even minor problems that could significantly affect the investment’s success.
- Math skills: You will need to utilize mathematics to make estimates of the worth of financial securities.
Financial Considerations
Curious about your earning potential in the finance and accounting industries before choosing a degree? We're here to help.
Both degrees offer promising career opportunities, high salaries, and job security. However, it is essential to consider the cost of education and the return on investment.
While an accounting degree typically requires less investment in terms of tuition fees and time to complete, a finance degree offers a higher salary. Data shows that the average yearly salary for an accounting major in the United States is $45,928 , while the average annual salary for a finance major is $92,631 .
Let's take a closer look at the earning potential in finance-related careers. On average, financial and investment analysts earn $95,080 per year, with the highest earners making over $169,940 . Financial risk specialists earn a median salary of $102,120 per year, and the top 10% make more than $175,720 . On the other hand, accountants earn a median yearly salary of $78,000 , and the highest earners make over $132,690 . So, if you're considering a career in finance or accounting, one thing is for sure: there are many opportunities for high earnings.
Future Outlook
The upcoming years are looking bright for business and finance professionals! With an anticipated growth rate higher than the average for all occupations, there will be a whopping 911,400 job openings every year from 2022 to 2032. That means there will be plenty of opportunities for people to enter the field, as well as for experienced professionals to advance their careers.
If you want to become a financial analyst, you're in luck! The employment rate for this role is expected to increase by 8% during the same period, leading to around 27,400 job openings per year. The accounting field is also predicted to experience a 4% increase in employment, leading to an average of 126,500 job openings every year.
But that's not all - the employment of financial managers is expected to experience the most significant increase of 16% from 2022 to 2032, much faster than the average for all occupations. This will lead to an average of 69,600 job openings per year over the decade.
Which is Better: Accounting or Finance?
Both accounting and finance are crucial components of any organization. While accounting focuses on recording, classifying, and summarizing financial transactions, finance deals with managing financial resources to maximize profit and minimize risk. Therefore, one can say that accounting provides the necessary framework for finance to operate effectively.
However, the choice between accounting vs. finance degrees ultimately depends on one’s interests, skills, and career aspirations. Some may prefer the technical and detail-oriented nature of accounting, while others may enjoy the strategic and analytical aspects of finance.
Bottom Line
Although with a different focus, accounting and finance degrees both prepare professionals for various lucrative careers in the business world.
If you're interested in starting a career in accounting or finance, check out OLLU's Bachelor of Business Administration program, which offers several concentrations, including accounting, finance, economics, management, and more. It will provide you with entry-level skills for career opportunities in various business, nonprofit organizations, and government agencies.
On the other hand, if you're a working professional looking to take your career in accounting to new heights, you should look into our Master of Science degree in Accounting . This program will help you take your skills to the next level and prepare you for further career growth.
Frequently Asked Questions (FAQs)
How is finance different from accounting?
Professionals working in finance are usually responsible for managing and leading an organization’s financial transactions, whereas those in accounting deal with the documentation and communication of said transactions.
Is finance better than accounting?
The finance industry provides greater job opportunities but with less predictability, whereas accounting offers more stability but generally lower salaries.
Is finance harder than accounting?
Accounting relies on precise arithmetic principles, making it more complex, whereas finance requires a grasp of economics and accounting without as much mathematical detail.
Back to Blog
