Bit of a general question but: I would like to know how much does an accounting qualification (I’m doing the ACA- UK) help with CFA Level 1? Does it make the accounting material much easier or is there still a lot of learning to do?
It makes the accounting material very easy.
I have a degree in accounting, as well as two degrees in mathematics. The accounting degree was an immense help in the FRA portion of the CFA exams (it’s the only useful thing I ever got out of that degree, by the way).
Thanks guys! This does give me some additional comfort/confidence, but I’ll still go through the accounting parts. I also did a degree in finance and at first glance, I’ve seen most of the material before to some extent or another. Hope that will make it easier too.
Level I is basically a refresher course of your undergraduate business studies.
Agreed
Don’t underestimate Level 1. People have a tendency to downplay their achievements after the fact, so when you see these charterholders telling you that Level 1 is a joke, remember that they, too, likely studied their asses off for it when they took it. <40% of people tend to pass, the test is straight forward but you need to respect it.
L1 and L2 is heavily focused in FSA (up to 35%), so it will greatly help you in that section.
it will help if your knowledge translates to acing the FSA section.
Otherwise it’s useless.
With the accounting qualification you will have to study as hard as you do with any new qualification. CFA is altogether different cup of tea . Almost 95% of the course in different . Only basic accounting will help you out in CFA qualification. Our guide is that you should stick to accounting qualification and build your career over that. You may find qualifications like CMA , ICWA interesting with the CPA or any other qual. You should remain stick to the accounting profession rather than shift the focus to finance. Otherwise you would have to start all over again.
Seems like there are some very differing opinions. Which of course makes sense as everybody will have their own view on things.
I have no intention of becoming complacent with these exams, I will of course study hard. I just wanted to get some more insight into those low pass rates whether if the exam really is impossibly difficult or whether its because its taken by a lot of people who don’t take it that seriously and have little to no financial background which makes it a lot harder.
I find your comment somewhat offensive, who are you to tell me what I can or cannot do? Accounting in itself is incredibly boring and I can’t fathom dealing with debits and credits for the rest of my life. I think that a chartered accountancy qualification gives me more job security (due to the amount of jobs available out there) and a lot of the stuff is still applicable to the more interesting parts of finance. How can an equity research analyst do his job if he doesn’t understand the details of financial statements?
I disagree with edupristine.
The accounting background will definitely help on L1 FRA (the material is mostly into to intermediate level financial accounting). L2 FRA gets into topis that are typically covered in an advanced UG accounting class - Pensions, consolidations, and pension acctg.
It doesn’t mean that you’ll automatically ace the material (15% on L1 and 20-25% on L2), but you’ll need about half (or less) the time studying on those sections than someone without the accounting background.
The finance degree witll also help a lot. But by “a lot” I mean that with the combination of accounting and finance you might have to study only 200-250 hours rather than 300-350 hours.
The finance undergraduate with additional accounting is probably the optimal background for passing L1, and pretty much for L2 also (not a gimme, but if you put the time in you should be fine.
As a person who took the CPA exams immmediately before L1:
I agree wholeheartedly with busprof. You still need to study your accounting, but not nearly to the degree that a trader or PM might, because you’ll already at leaast be familiar with most of the terms.
And L2 accounting is quite a bit harder, so you’ll definitely need to study it. However, you’ll still have a little bit of an “edge”, just not nearly as much.
L3 has more relevant topics for someone with experience in the industry. I remember there was a whole section on economic indicators and how these numbers affect the market. That was a breeze for me.
Just ignore the drivel that edupristine posts. That person has just showed up recently posting random crap, while not even paying attention to the evolution of the threads.
Though I said that Level I is a refresher course, I did not mean to imply that it is easy. Sorry if I came across that way. I recommend studying 300-400 hours for it.
^ He is on the payroll of the CFA.
What degrees do you have in mathematics? I have some interest in maths, but my level is pretty limited (analysis kills me, any kind of analysis, real, complex, linear, etc.)
I have a bachelor’s and a master’s in math. I’d love to get a PhD one of these days, but it would take me at least a couple of years to relearn everything I’ve forgotten. (My wife thinks it won’t take me nearly that long.)
I prefer pure mathematics: abstract algebra, topology, and, quite naturally therefore, algebraic topology. If I were to geta PhD, I’d want to study knot theory, a branch of algebraic topology.
An accounting qualification like CPA or CA will help in learning about the FRA portion of Level 1 and Level 2 . And that consists of the 10-15% of the whole curriculum .Moreover so long as the work experience is concerned , It is totally different as compared to the finance work . In Accounting or CPA qualification , you are dealing with subjects like Advanced accounts , auditing, Taxation etc. Where as in Finance & Investments you are basically dealing with Fixed Income , derivatives , Corporate Finance etc. which is altogether different field.
I hope It is clear…
A large chunk of corporate finance is overlap from the CPA (capital budgeting, DCF, NPV anlaysis, etc) as well as the relevance of discounting for bond valuation (good chunk of the fixed income section)