Finance vs Accounting: Which ought to be studied?
FAME is the sole focus. And no, we are not referring to the musical film Fame, which came out in the United States in 1980; instead, we are referring to the apparent popularity of FAME subjects among university students.
The importance of the FAME subjects—finance, accounting, management, and economics—in the business world drives their popularity, especially the first two letters of the acronym: financing and accounting.
The primary distinction between accounting and finance is that finance encompasses a broader range of specialisations in the banking, economics, and business industries, while accounting has a relatively narrow focus.
According to the 2018 QS World University Rankings by Subject, 36 nations have at least one of the 200 best accounting and finance schools, indicating that accountants are in high demand in developed and developing nations.
But should you study accounting or finance? To help you decide, here is a comprehensive comparison of the two subjects:
Accounting vs Finance
You can earn a degree in accounting and finance at the undergraduate level to gain a more comprehensive understanding of both professions. However, those who continue their education typically specialise in one or the other to acquire more in-depth knowledge in a particular area.
In contrast, to finance, which uses the same information to forecast future growth and evaluate spending to develop business financial strategies, accounting strongly emphasises managing financial reporting and records across the business world. Therefore, students pursuing degrees in finance are likely to be more interested in financial planning and control, whereas those pursuing degrees in accounting are likely to focus more on ethical guidelines and procedures for controlling rather than influencing figures.
What is covered by accounting degrees?
A degree in accounting will lay the groundwork for various related and specialised accounting careers. Most careers in accounting involve evaluating a company’s financial position by analysing and utilising financial data. This can include managing balance sheets and income statements to basic accounting. Planning, stewardship, accountability, controlling, decision-making, and a variety of other skills are increasingly common in accounting careers that place a significant emphasis on records and present reports. These careers also often involve the creation and analysis of these records.
Even though pursuing careers in accounting with only a bachelor’s degree is relatively simple, those who desire additional specialised knowledge in a specific field may pursue postgraduate study. To become a chartered accountant, you must acquire additional national-specific professional credentials. These professional qualifications, on the other hand, can be obtained on the job or with assistance from your employer, depending on the hiring company.
Accounting specialisations include: Auditing, taxation, risk assessment, international accounting, and management accounting are all areas in which students of accounting frequently have the opportunity to specialise. Another chance is measurable bookkeeping permits understudies to completely submerge themselves in true case study analyses to thoroughly appreciate how bookkeeping strategies are applied in legal procedures, for example, in cases including extortion, electronic wrongdoing, protection claims, corporate morals, and liquidation. Like finance degrees, those who want to study accounting with additional specialisation and independent research can earn a postgraduate degree at the MRes or PhD level.
What is covered by finance degrees?
On the other hand, a degree in finance is a beautiful way to get started in business, banking, and consulting careers in the financial services industry.PayScale’s US salary data indicate that careers in finance may also be slightly more lucrative than most accounting paths. This is because careers in finance typically focus on managing current and future business or organisation figures rather than just recording past and present income and expenses. As a result, people who work in finance frequently face additional responsibilities such as predicting and evaluating the potential for growth and profit, evaluating financial resources, utilising accounting statistics and reports, and evaluating external funding options.
Financial evaluation, behavioural finance, derivatives, econometrics, financial modelling, financial reporting, investment management, capital markets, financial regulation, quantitative finance and even some aspects of accounting are all common specialisations for those who study finance at the degree level. Even though they are taught as one program at the undergraduate level, these specialisations are sometimes offered as separate courses at the postgraduate level. Other potential programs are banking, financial planning, financial engineering, risk management, and international finance.
Accounting and specialisation in finance entry requirements
You should have something other than relevant work experience or academic ability, specifically in finance or accounting, to focus on finance or accounting at the undergraduate level. But applicants will have to show that they are good with numbers and are interested in accounting and finance. This can be done with high school and A-level qualifications in business, economics, computer science, mathematics, and other STEM and FAME-related sciences and technologies. It’s also possible to join a math club or another extracurricular activity.
To apply to a postgraduate finance or accounting program, you must complete a related undergraduate program and have many years of relevant professional work experience. However, this is only required occasionally. By studying for an exam like the GMAT or GRE or the material covered in their previous degree, students who can demonstrate their quantitative and analytical analysis abilities may also be considered.
Why study finance or accounting at the graduate level?
Up to 25% of all full-time postgraduate students in the UK are enrolled in a program related to FAME, making graduate degrees in accounting and finance even more popular. This popularity is a result of the high demand for graduates who are prepared to keep up with ongoing developments, new procedures, shifting markets, and emerging technologies, as well as the highly specialised nature of many careers in finance and accounting. Postgraduates in finance and accounting frequently benefit from a more in-depth understanding of the theories and models that support surface-level processes. As a result, they might be better prepared to adapt to the environment and make sound business decisions at the management level.
Further proficient capabilities
To become a certified accountant, you must obtain a professional bookkeeping capacity, such as the CIMA or ACCA declaration. You might not need to take these extracurricular exams depending on the exact credits and modules you take throughout your postgraduate studies.
Practical experience, universally accepted as vital, considerably benefits students’ preparedness for professional positions and comprehension of accounting and financial principles. A mostly theoretical approach is adopted at the undergraduate level, but there are much more opportunities to gain real-world experience while studying in research-based programmes and teaching master’s degrees. Students may be encouraged to pursue this as an additional option or as a requirement for their degree, typically with the help of their lecturers and the university.
Careers in accounting and finance:
Graduates in finance and accounting are in high demand, and there must be additional signs that this will change. Between now and 2026, the Bureau of Labor Statistics anticipates a ten per cent rise in employment opportunities for financial analysts and an eleven per cent rise for accountants and auditors in the United States. Services for management, scientific, and technical consulting are among the sectors that are anticipated to see the most significant growth. Plan for PC frameworks and related services; services like payroll, accounting, and tax preparation; and general activities related to investments.
However, remember that specialised postgraduate degrees will likely be a significant asset in many expected roles to grow faster. On the other hand, there currently needs to be more specialised roles; These include positions like typists, couriers, switchboard services, and data entry clerks.
If you have a degree in accounting or finance, you could work for insurance companies, investment banks, high street banks, building societies, and public sector agencies. Many highly sought-after positions are available at the largest multinational financial services corporations. These organisations, as often as possible direct broad enrollment missions to draw in the most encouraging alums. A specialised postgraduate degree could help you stand out; though there are many opportunities, it is still difficult to get in.
Expectations regarding salaries:
NACE found that the starting salary for accounting majors in the United States was, on average, US$57,511, while the starting salary for finance majors was slightly higher at US$58,464. This disparity grows at the postgraduate level; While this would suggest that a career in finance would be more lucrative if you decide to earn a professional accounting certification in addition to your academic degree(s), you could earn up to $8,000 as a certified accountant. On the other hand, accounting postgraduates begin their careers with an average starting salary of US$69,605, while finance postgraduates earn an average starting salary of US$74,201.
View our subject guides for accounting and finance to learn more about specialisations and careers in each field if you are still trying to figure out the battle between accounting and finance.
Author Bi0:- This topic is written by Mark Edmonds, the best academic writer at Academic Assignments, which provides the best quality finance assignment help and accounting assignment help for college and university students.