CPA exam vs. CFA exam

I am a CPA in a tax practice. I am also currently studying for Level 3. Somebody asked me how the CFA exam compared to the CPA exam. The two are difficult to compare, for many reasons. Nonetheless, here’s my take:

—Scheduling the Exams—CPA is MUCH easier—

With the CPA exam, there are four sections, and you can take them in any order you want. You can take as many as you want in a quarter, but if you fail, you have to wait until next quarter to take the exam again. That means that if you fail a section on March 31, you can take it again on April 1. And since these are computer-based exams given at the local Sylvan Learning Center, you can always reschedule if you get sick, want to go on vacation, or just don’t feel ready.

With CFA, you can take it on June 1. If you don’t want to take it on June 1, you’re welcome to wait until next June 1. That gives you a whole year to:

  • forget everything you learned (if you failed),
  • get distracted with a new job
  • get distracted with a new family
  • move to a different city
  • have a car wreck or other disaster,
  • get depressed about your failing score.

This makes the CFA exam exponentially more difficult, both because of the unforgiving nature of CFAI, and the fact that you can’t just study for a few more weeks and take it again. (I should know–I got score band 10 on Level 2. If I could have studied 2 more weeks and taken it again, I’m sure I would have passed. But I had to wait a whole year and study for a whole year to take the test again. )

—Candidacy for the Exams—CPA is MUCH more difficult—

With CFA, if you have a Bachelor’s degree, you are qualified to take the exam. Doesn’t matter what degree, what major, what school. A Bachelor of Arts in Art Appreciation from Local State University is good enough.

With CPA, requirements vary from state to state. Most states, however, require:

  • a Bachelor’s degree, PLUS an additional 30 hours (for a total of 150 hours),
  • 30 of the 150 have to be in upper-level accounting, AND
  • another 30 of the 150 have to be in upper-level NON-accounting business courses.

This makes the CPA candidate fairly prepared for the CPA exam, even though they haven’t even registered for the exam yet. In my experience, almost all undergrad accounting courses teach 100% to the CPA exam. I don’t know if that’s by design, or if that’s just the standard body of knowledge for an accountant.

the hobbit approves…thats helpful thanks mate…what do you think about programme content?

—Depth of material for the exam—about the same—

Personally, I have not found any single item on the CFA exam to be terribly challenging. Pension accounting was challenging, but then again, pension accounting is also on the CPA exam. Business combinations can be tricky, but that’s also covered on both exams. Swap valuation on CFA Level 2 was hard. But it’s not any harder than partnership accounting.

One thing to remember, too. If a person is simply eligible to take the CPA exam, they have already learned about 90% of all the information they need to know to pass the exam. They just need to refresh their memory. When I studied for the CPA exam, it was more of a review than actually learning new concepts.

All in all, I would say that the CPA exam material marginally easier than CFA exam material. But that’s not the whole story. Read on.

—Breadth of material for the exam—CFA is exponentially harder—

Even though the material is a little easier for the CPA exam, the CFA exam is probably four of five times more difficult. For example, I studied about 200-250 hours for my whole CPA exam, not including 30 hours of college work. I probably studied 200-250 hours for Level 1 of CFA. I studied probably 400-500 for Level 2, and I plan to study about 300-350 for Level 3.

Also, each level of the CFA exam covers the same breadth of material as all four parts of the CPA exam combined. It’s hard to store all the material at once. Let me provide an analogy.

In the book “Animal Farm”, the horse Boxer tries to learn the alphabet. He’s able to learn ABCD. Once he learns ABCD, he moves on to EFGH. However, after learning EFGH, he realizes he’s forgotten ABCD, so he has to learn ABCD all over again. After learning ABCD, he has forgotten EFGH again. He finally gives up on EFGH, and just decides to stick with ABCD.

The CPA exam can be broken up into 4 small parts. Moreover, the material is exclusive to its own part. In other words, once you learn ABCD, you can forget everything you learned and move on to EFGH. Then you can forget EFGH and move on to IJKL. This makes the CPA exam easier to pass.

With the CFA exam, you have to memorize the whole alphabet, A-Z. That’s Level 1. (Level 1 is about as hard as the entire CPA exam.) In Level 2, not only do you have to remember A-Z, you have to learn how to put the letters together to form words. In Level 3, you have to be able to to put the words together to form sentences.

All this makes the CFA exam MUCH harder than the CPA exam.

To summarize, the CFA exam is probably 4-5x harder than the CPA exam. However, college prepared me for about 90% of the CPA exam.

Even though I have a Master’s in Finance, it only covered about 70% of Level 1, and less than 30% of Level 2. I have never seen most of the Level 3 material before, so I’m having to teach myself.

When people say, “The CFA exam is not an ordinary exam,” they are absolutely correct. It is harder than the Series 7, Series 66, Series 63, CPA exam, SAT, and GMAT all put together. (And yes–I have taken all of these exams. I have passed all of them except the SAT and GMAT, because there is no “pass” on them.)


CFA > PhD in nuclear physics

I don’t follow. “Chasing the sun?”

Well I just found out a few hours ago that I passed the last section and final section of the CPA exam and I’m finally done studying foreverrrrr!

With that said, passing the CPA exams is much easier than passing the CFA. Less study time per exam, the actual exam is easier and it’s curved. The curve is a major part of it because the intelligence of the candidates can’t compare to the level 3 candidates. So the competition element def impacts the results.

That’s my take on it anyway. Good luck on level 3 or whatever exam you’ll be taking next!

Alladin, mate are you going for CPA? I heard that (I could be wrong here, this was passed on by my company mate in Scotland) CIMA is more accepted in UK? Is that true or both of them are completely different? I havent read whats CIMA, but am sure you would know it better!

Are there CPA exams in UK?

I know there’s CIMA, ACCA & ICAEW. Lots of these in Malaysia. But no CPA from UK.

I am not touching accounting if i can avoid it…i was just curious about the cpa and cfa was my only reference

I think the UK equivalent for a CPA in the UK is a “CA”, or “Chartered Accountant”. I don’t know much about it.

One thing that makes a CPA very different from a CFA/CFP/CIMA/ChFC/CLU/CAIA/FRM/AAMS/CRPC/CMA/ CGMA/CVA/ABV/PFS/CFF/etc. is that the CPA certificate is a LICENSE granted by the STATE that allows you to do something that you could not legally do before. All these others are just credentials, that don’t give you any kind of legal license. Ergo, you would expect that a CPA would not have much of a benefit outside the U.S., while the others would.

My intent with this thread was just to state how the difficulty of the CPA exam compares to the CFA exam. I would not begin to compare the job duties of an investment manager (CFA or CIMA) to the job duites of a CPA. They are not related in any way whatsoever.

I think it’s also important to distinguish the difference between accounting on the CFA exam, and accounting on the CPA exam. To some extent, accounting is accounting, and it doesn’t change. FIFO and LIFO don’t change, depreciation methods don’t change, and business combinations don’t change.

The CPA body of knowledge covers financial reporting–but only from the point of view of a producer of financial statements. A “pure” CPA is never trained in the analysis of financial statements. A “pure” CPA does not know (nor does he care) what inventory method results in the highest income. Sure, that may be an integral part of your job once you progress through your career, but it’s not taught in school and it’s not tested on the exam.

A “pure” CPA also is also not trained on the “tax alpha” that the CFA Institute teaches. A CPA only fills out a tax return based on the information provided. They can’t tell you how much you’re saving your client if you hold this bond in an IRA, or whether it makes economic sense to gift an asset to your heir. They’re only interested in how it is reported to the government. Again, tax planning becomes more important in your career, but it’s “caught rather than taught”.

The CPA body of knowledge does not cover investments (except how to book them) or portfolio management.

appreciate your posts ddrobinett.thx mate

Thanks for this post ddrobinett. I know that this is a relative queston to ask but if you had to rank each of the 4 exams from hardest to easiest how would you rank them? taking into consideration studying for the cfa exams and university level accounting.

Also, what prividers did you use?

Im flirting with the idea of sitting for the cpa next year, depending on how my brain cells feel after doing level 3.

Use Becker. Peter Olinto does the lectures. Becker used to own Stalla before it got bought by Schweser. Exams are listed from hardest to easiest below. This is obvously subjective but many feel the same way as me.

  1. Regulation (REG)

  2. Financial accounting and reporting (FAR)

  3. Business environment and concepts (BEC)

  4. Audit & Attestation (AUD)

Becker is widely regarded as the best. It’s probably also the most expensive, at about $4,000 for all four sections. (That gets you a textbook, video lectures, a test bank, and probably some flash cards.) Personally, I liked Bisk better. I thought their study packages were better and it was a little cheaper.

When I was studying, I had a low-paying job, and couldn’t afford that high-priced stuff. I wound up using whatever I could get at the local used bookstores. This consisted mainly of used textbooks and Becker and Bisk material from three years earlier. I coughed up $400 and bought a CD-based question bank, which served as the “backbone” of my review sessions, since I believe that answering questions is the best way to study. The question bank is called ExamMatrix.

And I agree with JP, that it is subjective. However, I disagree with him on which was hardest. Here is Becker’s list (which I DO agree with), arranged from hardest to easiest, along with the recommended study time. (These are for the “old” test. The test changed right after I took it.)

  1. Financial Accounting and Reporting (FAR), 120 hours
  2. Regulation (REG), 90 hours.
  3. Auditing & Attestation (AUD), 80 hours
  4. Business environment & concepts (BEC), 65 hours.

If you add it up, that’s about 350 hours. I didn’t study that much. I probably studied about 200-250 hours for the whole test. (I didn’t hardly study for BEC at all.) As a frame of reference, I studied about 150 hours for Level 1, 200 hours for Level 2 (and failed it), another 350 hours for Level 2 (and passed it), and have now logged about 100 for Level 3. I hope to get in another 250-300 before exam day.

Like I said before–I failed Level 2 once. I also failed FAR once, and AUD once. Failing a part of the CPA exam is not nearly as devastating as failing a part of the CFA exam.

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Want to know how old I am? When I took the CPA exam, no calculators were allowed (that’s right’; you walk in with your pencils and your brains), it was offered twice a year and they had a smoking section for those who wanted to light up while taking the exam.

You are right; failing a section of the CPA exam is not as devastating as failing a level of the CFA exam. I should know: I have failed them all at least once.

isn’t the irony that the world of investments is 90% intuition and 10% financial accumen? Warren Buffett is rich because he can read balance sheets and P&Ls and cash flow statements, but moreso because he has a good grasp of “will Americans buy this product”. Matching durations and CPAM and option pricing modeling? No one makes serious money doing that. Most great investors don’t apply finance theory to anything. They go long good companies and may go short bad ones and they understand central banks.

sorry this is deadly wrong. i’m a canadian cpa (slightly more difficult to get than american cpa) and i can say cfa program is about 5-10 times more difficult.