Accounting is defined as the management and preparation of financial records, while finance is defined as the management and study of various investments. According to the Bureau of Labor Statistics, both occupations are expected to grow in the coming years, and they both have overlapping similarities.
The Difference between Accounting and Finance
Overall, accountants are more concerned with business financial operations, audits, taxes, and budgets. Accountants deal with concrete numbers that are expressing real sums in present time, such as taxes owed or received. Financial analysts are experts in bonds, stocks, and other financial instruments. A financial analyst manages more uncertain figures such as stock prices or the overall return of a particular investment.
Since both accountants and financial analysts need to be proficient in math and quantitative analytics, some of the core classes in the bachelor’s degree program will be the same. For example, coursework in business administration and financial management are required for both degrees.
Students in accounting degree programs are required to take classes in business administration, accounting ethics, statistics, business law, marketing, cost management, and any number of other speciality topics. Finance programs focus more on risk management, international and domestic trade, financial engineering, portfolio management, and many others.
What are the Types of Professions in Accounting and Finance?
There are two different type of accounting professions: accountants and auditors. Accountants usually work within a business, and auditors are employed by auditing firms who routinely check other businesses for financial improprieties or mismanagement. On the other hand, financial analysts are categorized according to their expertise in various investment instruments. For example, fund managers buy, and sell the future value of a specific financial instrument; portfolio managers manage entire investment portfolios for clients, which may include real estate, stocks, bonds, and other financial instruments.
Many other financial analysts are adept at recognizing certain financial activities, such as projecting ROI on various investments, looking at ratings analysis, studying various business or government’s abilities to repay its debts, and many others. Another way to look at financial analyst is “sell-side” versus “buy-side”. Sell-side analysts usually advise sales teams into distributing bonds, stocks, and other various financial products. Buy-side analysts provide management strategy and investment advice to their clients.
Personality also factors in when people start considering what career they want. Accountants must have strong organizational skills, must be very detailed oriented, have strong analytical and quantitative skills, and overall they must have the ability to work independently. The work that accountants do is very precise, so they must have the utmost concentration and be process-oriented. Financial analysts also need to make decisions quickly under tremendous stress, and their work is often results-orientated and requires very strong communication skills.
Further Reading:
1. TIOSECO,PABLO. (2011, May 16). Accounting or Finance Degree: Which Should You Get?. Retrieved June 5, 2013, from http://www.businessschool.com/articles/accounting-or-finance-degree-which-should-you-get/
