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Subject Topic: * Is the CPA for me? (Topic Closed Topic Closed) Post ReplyPost New Topic
  
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roy_mustang
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Posted: 05 Sep 2012 at 23:34 | IP Logged  

CFA seems to be most popular for people who are interest in
investment management and other quantitative business careers. For
corporate finance, most job posting want a CPA with an MBA.

However, being a CFA will give you some finance opportunities that
most grads from a non-ivy league school would not get.
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DaveWanders
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Posted: 06 Sep 2012 at 21:39 | IP Logged  

ebitda wrote:
That's a good question. What kind of
financial statement analysis/forecasting are you
interested in? If you're interested in doing that for
purposes of investing (e.g., equity research for an
investment bank, independent research firm, or a mutual
fund), then you're better off with a CFA, as FARB already
mentioned. The CFA is the gold standard when it comes to
anything related to investments. If you're interested in
doing that on the corporate side (e.g., FP&A roles at a
F500 finance department), then a CPA, and to a lesser
extent a CMA, is the way to go.

It depends on the company, but you will usually find that
most FP&A analysts have a CPA and public accounting
experience. The CPA is the most useful designation on the
corporate side. It is considered the basis of anything to
accounting no matter how little of the material you may
actually use on the corporate side. I personally don't
think a CMA is that important after getting a CPA, but
that might depend on your company's industry. I haven't
run into anyone with a CMA in my sector, and no job
description that I've read so far requires or even
prefers the CMA. On the other hand, I have seen plenty of
FP&A job descriptions that say something like "CPA and/or
MBA preferred." A CMA can help you stand out from among
the CPA-only crowd for FP&A jobs, especially
manufacturing companies, so you have that option if you
feel you need to go the extra mile, but from my
experience, the CPA is priority for anything on the
corporate side.

You don't need a MAcc for a CPA. Your other option is to
become CPA-eligible using community college or university
extension program courses, which can be cheaper. The
limitation of those is the lack of on-campus recruiting,
however, especially if you want to join a Big Four. You
may not need the on-campus recruiting anyway if your
current position is relevant to your goals. In that case,
see if you can take courses part-time while working, pass
your exams once you're CPA-eligible, and then see what's
out there. Good luck!


Thanks for the very well-thought out and detailed reply,
ebitda.

I'm absolutely interested in doing analysis on the
corporate side, preferably in FP&A. Of course, these job
postings are the ones that most frequently ask for CPAs
or Big 4 experience, which brought me here. I should
have been clearer about what I meant by saying "financial
statement analysis". While I do find fundamental
analysis interesting (probably wouldn't turn down a good
equity research job), I'm mainly talking about internal
stuff like financial modeling, budget projecting,
treasury, and interest rate and balance sheet management.

Would you estimate that big 4 experience is the most
important thing in breaking into FP&A or is it common
with just a CPA and general accounting/business
experience or perhaps local public accounting?

I'm definitely leaning towards the community college
option, but I want to be positively sure that all my
credits will count. It's hard to justify spending $40k on
a MAcc just for recruiting opportunities. I realize
that's the main draw of the good programs, but if I ended
up with no big 4 or at least solid regional offers I'd
very much regret spending the money.

Thanks again.
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DaveWanders
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Posted: 06 Sep 2012 at 21:43 | IP Logged  

Virgil wrote:
Ugh..the CFA sounds like what you're
looking for. CPA won't do
enough to help your goals.

Just know what you're getting into with the CFA. Road is
long, and I'm
almost burnt out at this point with it. But get it and
doors will definitely
open considering your background.



Thanks for the reply. One thing discouraging me from
pursuing the CFA is not only that long road, but the 3
year experience requirement. Working in insurance, I
don't believe I would qualify. By the way, which doors
are you talking about exactly?

I'm afraid I'm not enough of a people person to be a good
financial adviser, and not enough of a math whiz to work
at a hedge fund ;)
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ebitda
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Posted: 09 Sep 2012 at 02:21 | IP Logged  

DaveWanders, for FP&A, I don't think Big Four is absolutely crucial. It's just a common thing you will see since many corporate-side finance and accounting jobs are filled by ex-Big Four candidates who wanted to make the switch. A CPA with other relevant accounting experience should be fine.

FP&A usually involves some of the "internal" functions you mention, such as financial modeling, budget analysis, and forecasting, which in my opinion is still a CPA thing, not CFA. This kind of analysis might sound something like: "Let's see how our overhead expenses will look for our various cost centers under our current and long-term operating plans to see what kind of management decisions we need to make...Ah, it looks like there's a big variance between our forecasts and actuals. We recommend management do A, B, and C to reduce spending in X, Y, and Z." It's not as much modeling in the sense you're probably thinking, but you might get some of that. FP&A goes hand in hand with financial reporting/accounting. Of course you need to be able to generate the reports before you analyze them, which is why FP&A analysts must rely on the accountants to close the books properly for the concerned reporting period. Any questions about actuals (revenue recognition, expense accruals, etc.) will go to the accountants who booked those journal entries.

Treasury is a broad term. It can involve daily cash management (e.g., wire transfers, lock box banking, FX issues, etc.) and cash flow analysis/forecasting, which I would say is a CPA thing. It can also be related to investments (e.g., in-house pension fund management). This is a CFA thing. If it involves financial risk management, not to be confused with operational risk management, then that also should be a CFA thing.

Another thing I should bring up is capital budgeting, which involves financial modeling to see whether a project or capital expenditure is worth undertaking. At my company, this is a broad function that falls under the general corporate finance department, and I believe some of it is done by the business development group. You will be calculating NPV's, IRR's, and all that good stuff, which I'm guessing is the kind of modeling you're talking about. A CFA is good to have for these, but it also probably depends on how heavy the modeling is (i.e., does it require the skills of an investment banker, or are general skills sufficient?) and how often the company needs this type of work done (e.g., daily analysis or on an ad-hoc project basis).

While it would be cool to have a job that explores them all, in reality I don't know of too many jobs where you can wear multiple hats like that, especially larger companies, where the functional departments usually have a fine line of who does what. It might be different for different people, but I was using my company as a model, so I hope it gives you a good idea about what to expect.

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http://cpaforum.cpanet.com/index.php?/topic/52-is-the-cpa-fo r-me/



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Virgil
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Posted: 09 Sep 2012 at 12:27 | IP Logged  

Well, it usually depends on the company of course. I spent some time
at a small public company, and I saw that the CFA was more valued in
the financial modeling/FP&A/Corporate Development/Due Diligence
roles than the CPA.

In fact, the ex director of internal audit (not a CPA, but MBA-Finance)
was promoted and assigned to Corp Develop director. They eventually
hired an ex-Big 4 CPA for the internal audit director. So the CPA in
that company was viewed much like an accounting designation.

I also spoke to someone years ago that told me they preferred not to
hire accountants/auditors to Financial Analyst roles because of their
lack of familiarity with finance, and their propensity to struggle with
financial modeling.

However, he did mention that passing one or two parts of the CFA gave
such a person credibility in his view (he was a candidate too), and that
that person's chances for the job increased.

I guess my long winded point is that depending on the company, you'll
find varied views on different designations. In my opinion, in this
situation networking becomes more important than what designation
you go for. This is because a good network can let you know where
these opportunities areat, what they think of CPA/CFA, and what
background they look for.

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