In most cases, people tend to lump together accounting and finance as one discipline. While many similarities might exist between the two, they are by no means synonymous. Let’s look at finance vs accounting difference to help you put this confusion to rest.
Definition of Accounting and Finance
Dr Oliver Feltus of Eastern Kentucky University refers to accounting and finance as two halves of the financial book with the latter more focused on the future. To be precise, accounting is more inclined towards preparation, evaluation and management of financial information. On the other hand, finance is more focused on studying how various investments are managed.
Careers in Accounting and Finance
As stated above, these two disciplines are barely synonymous. Accounting breeds accountants while finance breeds financial analysts. Therefore, accountants are more interested in budgets, audits and financial operations of a given business. Financial analysts typically have expertise in stocks, bonds and other financial products available in the modern market. A financial analyst will dwell on uncertainty and prospects while an accountant will depend on concrete numbers expressing real monetary values in the real-time.
Qualifications for Accounting and Finance
Qualifications for both disciplines differ with a narrow margin. For instance, course work in financial management is a requirement for both parties. However, accountants are required to take further classes in business law, business administrations and marketing. Finance degrees emphasize more on logistics and analysis such as risk analysis and management, corporate finance, financial engineering, domestic finance, etc. Students enrolled in the programs are usually required to specialize in certain fields at one point. Also, accountants are required to pass CPA exams which are administered by relevant authorities to be registered as certified accountants.
According to the bureau of labor statistics, the average annual salary for an accountant in 2015 was $66,000 with the highest paid accountant earning $113,000 and the lowest $40,470.Financial analysts earned an average of $78,300 with the highest getting $152,420 and lowest $48,100. These figures indicate that a financial analyst earns a slightly higher salary than an accountant.
The Bottom Line
Perhaps, the most important factor in finance vs accounting difference is getting to know your personality and discovering your passion. If you are that person with a high tolerance for detail, accounting can be the right match for you. On the other hand, if you are gifted with quick and prudent decision-making skills, you can consider finance. Along with the differences stated above, you should be in a position to make a wise decision on what you want.