CFA Work Experience Requirement

folgersnyourcup · April 14, 2012, 2:48am

I am hoping someone here can assist me with a question regarding the work experience requirement to obtain the CFA. I graduated with my masters in accounting degree last year and since then completed the CPA, CMA, CIA, and CFE exams. I would like to challenge myself with the CFA exam and very interested in the subject matter. I am currently working in internal audit and plan to transition into external audit after two years (when I have earned all four of my current certifications). As of right now, I do not plan to go into the investment banking field.

I am wondering my chances at obtaining the work experience necessary to become a charterholder while in external audit. On cfainstitute.org, it lists acceptable job title as “Auditor” and acceptable work experience as “I performed financial statement audits of companies that carried significant assets and liabilities subject to fair value accounting. I assessed the reasonableness of the valuations and assumptions behind the valuations of those assets and liabilities.”

As taking these exams is a substantial undertaking both monetarily and time-wise, I would like to figure out the possibility for meeting the certification requirement. I sent this e-mail to the CFA Institute:

"I have a question regarding the CFA work experience requirement. Right now I am in internal audit, which I know in no way counts towards the work experience requirement to be certified as a CFA. I plan to transition into external audit later in my career and this is where my question lies. I am 11 months into my first professional job and have passed the CPA, CMA, CIA, and CFE exams, and am interested in potentially pursuing the CFA Exam.

I noticed this is listed under the acceptable work experience section of the website: “I performed financial statement audits of companies that carried significant assets and liabilities subject to fair value accounting. I assessed the reasonableness of the valuations and assumptions behind the valuations of those assets and liabilities.” This refers to the experience that would be acceptable for an individual in external audit. Based off of this, it would seem likely that a wide variety of external audit roles would provide the potential for achieving the required 4 years of experience to become a CFA…am I correct? Thank you very much for your help!" Their response was as follows: "CFA Institute ID# 6739880

Dear Mr. Cohen,

Thank you for contacting us. Because of the large number of applicants and candidates in the CFA Program, CFA Institute cannot provide pre-determinations or advice regarding work experience prior to the membership application process. Acceptable work experience for regular membership in CFA Institute and award of the CFA charter involves spending 50% or more of your time evaluating or applying financial, economic and/or statistical data as part of the investment decision-making process involving securities or similar investments, which includes, publicly traded and privately placed stocks, bonds and mortgages and their derivatives; commodity-based derivatives and mutual funds; and other investment assets, such as real estate and commodities, if these other investment assets are held as part of a diversified, securities-oriented investment portfolio; supervising persons who conduct such activities; or teaching such activities. To determine whether your specific background meets the definition of acceptable work experience, and to view sample job titles, please carefully review the work experience guidelines which are outlined athttp://www.cfainstitute.org/about/membership/process/Pages/index.aspx. Based on these guidelines, applicants should submit detailed narratives about their positions which will be reviewed as part of a complete membership application. Please note that there is no application fee and no obligation to join once the review of your application is complete. For more details about CFA Institute membership and the application process, visithttps://www.cfainstitute.org/cfaprogram/gettingstarted/membership/Pages/index.aspx"

Unfortunately, their reply seemed to make it less clear… Any help from those who may have gone a similar route as me in become certified would be great!

Thank you very much.

mygos · April 14, 2012, 5:59am

“Unfortunately, their reply seemed to make it less clear…”

Disagree with your observation. They are pretty clear and straightforward to your query when they replied:

“…………Based on these guidelines, applicants should submit detailed narratives about their positions which will be reviewed as part of a complete membership application. Please note that there is no application fee and no obligation to join once the review of your application is complete……….”

What it simply means is that if you want a reliable and firsthand direct answer simply apply for the membership with details of your experience and we will evaluate your case and send official reply at no cost and you will be under no obligations to join whether the answer suits you or not. What else do you want for free from a professional organization?

It is evident that due to possible large no. of queries on this matter, they want to spend time on answering on the validity of experience for the qualification (i.e. membership) only when one is serious enough to raise the query in the format of their prescribed application form for which there is no application fee. If you are really serious why don’t you do so and get the official answer once for all instead of listening to various guesses regarding its acceptability and be more confused? But before you do so do go through innumerable threads on this topic in this forum (besides the guidelines in the links given by them ) to ensure you state your work experience in more favorable and acceptable terms as it does make a difference to their evaluation!! In fact quite few answers are already there in some threads regarding ‘auditor’s’ work experience in this forum just do a search you may get your answer.

JonnyDee · April 14, 2012, 11:41am

Why pursue the CFA designation if you have no interest in moving into the investment industry? If accounting is your passion, why not focus on that? If the CFAI doesn’t accept your experience the first time you can always rephrase it and resubmit, so it’s likely they will accept your experience even if it’s not on your first submission.

folgersnyourcup · April 14, 2012, 12:30pm

Thank you for the replies. Mygos, my issue would be that I wouldn’t have the ability to send in a membership application for what would seem to be a minimum of four years… At this moment, I have no experience of any kind in any area they highlight as relevant experience. It would obviously not be correct to apply for a membership with hypothetical experience. This is why I asked them the question.

As I would like to sit for level 1 in December 2012, beforehand I was hoping to find some idea of the chances of achieving the certification at some point in my life.

I realize I was not clear at all in my question to the forum. Has anyone here at all gotten their experience requirement met through basically standard external audit work?

Thank you for the help, I will look through older threads later today.

JonnyDee, I like to challenge myself and learn. The subject matter of the CFA exam does interest me, and I am looking forward to it. Perhaps after studying for the exam, I will find a strong interest in the investment industry…