Accounting Or Finance: Which Degree Is Right For You?

Job Growth

1 Based on the job growth figure for Financial Analysts
2 Based on the job growth figure for Accountants and Auditors
* All data is taken from the US Bureau of Labor Statistics

Jobs for both majors are expected to grow faster than the overall average for all other occupations. Both fields are considered competitive in terms of their respective job markets.

Finance is a complex and constantly evolving field. With a growing need for financial products and a greater number of financial products available, understanding the financial markets has become important.  Emerging markets throughout the world are creating new investment opportunities, which require the expertise of individuals such as financial analysts, finance managers and treasurers.

Similarly, the accounting job market is also in a good shape for prospective new entrants. One point that should be kept in mind with accounting jobs is that they are directly correlated to the economic conditions. With growth in the economy, more companies emerge, creating a greater demand for individuals who can prepare and maintain company financial statements and records. In addition to that, there has been a heightened focus on accounting as a result of corporate scandals and recent financial crises. Stricter accounting laws are creating an increased need for accountants and related professions.

Salary

3 This is the 2012 median annual salary figure for a Financial Analyst
4 This is the 2012 median annual salary figure for Accountants & Auditors
* All data is taken from the US Bureau of Labor Statistics

Finance majors are earning more than accounting majors. The very nature of the changing financial markets makes finance a lucrative field. Financial analysts deal with investment portfolios, assess the performance of stocks and bonds, study economic and business trends, and determine the value of companies and so on. This career requires consistent vigilance and updating of relevant knowledge as the markets change. Performance in this field counts a lot; compensation and benefits are usually tied with  results, making finance jobs all the more challenging.

Accountants are in charge of examining financial statements to ensure that they are accurate and comply with the relevant laws and regulations. Their main duty revolves around financial statements - organizing, maintaining and assessing them. With newer and stricter regulations relating to accounting data, and the computerization of a large number of accounting functions, the job responsibilities of accountants have become somewhat limited, resulting in comparatively lower salaries.

Specializations

Dividing the two fields into specializations gives you a broad overview of the types of opportunities that might be available to you. Finance specializations are in the following fields:
Personal Finance deals with financial activities of individuals or families.
Corporate finance goes into dealing with the capital structure of large corporations. 
Public finance revolves around the role of the government.  

Accounting specializations are as following:
Financial accounting deals with the periodic reporting of a company’s financial status.
Management accounting is more relevant to the business processes, budgeting, forecasting, internal controls, etc.
Auditing is the verification of a company’s accounts. This could be internal or external.
Tax accounting revolves around the application of the Internal Revenue Service (IRS) rules and regulations at the federal, state and city level.
 Fund accounting is primarily based around non-profit organizations; government and non-government organizations.
Forensic accounting is the use of accounting in legal settings, investigations and dispute solving such as cases of bankruptcy, divorces, falsification of accounts, etc.

Job Titles

5 This is a combination of job titles and similar occupations from the Bureau of Labor Statistics and O*NET OnLine.

6 Data taken from the US Bureau of Labor Statistics under the ‘Similar Occupations’ tab
There are some careers that overlap in both finance and accounting.  Due to certain similarities in the course structures for both degrees, finance majors can be trained to take on accounting roles and vice versa.

Other than that, finance majors work at different levels in an organization. They deal with issues on the front end, making decisions, recommendations and determining the best course of action according to the contemporary financial health of the company.
As opposed to that, accounting majors mostly work at the back end.  They form the financial backbone of a business. They provide quality, assurance and risk management services. Their work is defined by set industry standards and guiding principles, referred to as the International Financial Reporting Standards (IFRS), Generally Accepted Accounting Principles (GAAP) or the International Accounting Standards (IAS).

Relevant Skills

7 This is a combination of data from the US Bureau of Labor Statistics and O*NET OnLine for Financial Analysts and Accountants and Auditors.

Strong mathematical and critical thinking skills are common in both professions. At the end of the day, both accounting and finance deal with numbers and monetary matters. Critical thinking and judgment is involved in both fields. You will need active learning since financial matters change on a constant basis and even accounting principles are updated as need arises. Your ability to keep up with these changes will be a compulsory element for your success in either field.

Now let’s look at the field specific skills. For instance, a financial manager might be in-charge of capital budgeting for a company. This process not only involves hardcore numerical data, forecasting, statistical analyses and valuation of investments, but it also requires judgment and decision making ability, combining complex problem solving, analytical and mathematical skills.

Similarly for accounting, accountants might find themselves in complex situations where the accounting standards for a locality are ambiguous on a matter or in direct conflict with the international standards. On other occasions, accountants might have to choose the best method to dealing with an accounting issue, out of a variety of options.  In cases such as these, skills like coordination, consulting, systems analysis, judgment, decision making and attention to detail are of importance.

Which degree do you need for an entry-level job?

8 Data taken from O*NET OnLine under information for Financial Analysts and Accountants

For both these fields, a bachelor’s degree is sufficient for an entry-level job. The larger chunk of respondents entered their respective careers with a bachelor’s level education. Most students start off with a bachelor’s degree but do end up getting a graduate degree at some point in their career.

For a finance job, it is harder to enter the market with anything less than a bachelor’s degree. Due to the demanding and complex nature of this field, most employers look for students who are well prepared to handle the pressure that comes with this career. On the other hand, for accounting, there are a few career options that come with an associate degree.  The most common career options are bookkeeping, accounting and auditing clerks.

To sum up, before making a decision, make sure you understand that these factors need to be combined with your preferences, interests and individual skills. Depending upon your own abilities, preferences and interests, either finance or accounting could be the right career path to follow.  

States with the highest employment level in this occupation:

Source: bls.gov