Front Range Community College Blog

Accounting vs. Finance: Which Major is Right for You?

If you have a knack for numbers and a penchant for the business world, two fields of study that will undoubtedly cross your radar are accounting and finance. But what are the big differences between the two, and which major and career would suit you better?

Accounting Looks at the History

Accounting is essential for any company. Accountants record a company’s financial transactions, analyze its financial health, and report information about the company’s financial operations to internal parties as well as external stakeholders (regulatory bodies and shareholders). You’ve probably heard people say before that accounting is the language of business. That’s definitely true. One can tell a lot about a company by reviewing its financial records, which share the history of a company and give a glimpse into its future.

Finance is Forward-Looking

Finance involves the monetary aspects of a company, including the analysis of an asset’s rate of return and relative risk. Where accounting looks at the history of a company’s performance and how that positions them currently, finance is forward-looking, considering the income and appreciation potential of a company’s assets. Finance practitioners use tools to value assets and investments, using concepts of time, risk, and money.

Accounting vs. Finance Classes

As an accounting major, you will take classes such as accounting principles and theory, financial accounting, managerial accounting, cost accounting, income tax accounting, auditing, and accounting information systems—in addition to a core business curriculum.

As a finance major, you’ll take some of the same classes as accounting majors and will likely have the opportunity to concentrate in either corporate finance, financial planning, investment finance, or real estate finance. Classes might include financial risk management, corporate finance, financial planning, estate planning, risk management, debt securities analysis, portfolio management, and real estate finance—in addition to a core business curriculum.

Accounting Jobs

Both accounting and finance majors will have a wide range of opportunities available to them when they graduate.

Accounting majors typically go into financial accounting, management accounting, auditing, or tax accounting, generally in public or private company settings. Job titles include accountant, actuary, internal auditor, IT auditor, external auditor, tax accountant, management accountant, budget analyst, revenue agent, cost estimator, credit analyst, financial analyst, and controller. Those who wish to start in public accounting or public firms—or simply want to keep their career options open—are encouraged to become Certified Public Accountants (CPAs), which requires the passing of the National Uniform CPA exam.

Finance Jobs

Finance majors typically go into one of three areas: corporate finance, investment analysis, and real estate finance. In corporate finance, jobs include financial analyst, treasury manager, risk manager, business analyst, or credit manager. In investment analysis, you might become an equity analyst, portfolio manager, quantitative finance analyst, stock broker, or fund manager. In real estate finance, professionals work as mortgage brokers, real estate developers or analysts, commercial or residential brokers, or investors. Some go on to earn the Chartered Financial Analyst designation after they graduate or once they gain a few years of experience.

Job Outlook

Here’s some great news: both accounting and finance have very promising outlooks, according to the U.S. Bureau of Labor Statistics Occupational Outlook Handbook. Keep in mind that these aren’t entry-level wages, but hopefully give you an idea of your earning potential in each field:

  Employment growth, 2014-2024 Annual mean wage (2015)
Accountants/auditors 11% $75,280
Financial analysts 12% $80,310
Personal financial advisors 30% $89,160

A Few Other Things to Consider

When choosing a major, it’s important to think about your long-term career as well as your immediate job prospects. Here are a few things to think about when selecting the major for you:

  • Accounting majors who pursue the CPA are likely to have an easier time moving into finance down the road (without further education) than finance majors who later decide they want to go into accounting.
  • If you’re unsure of which field you prefer but would like to try both, you might consider majoring in accounting with a minor in finance. Generally, employers hiring accountants want an accounting degree, while employers hiring financial analysts or similar positions might consider an accountant by education with a proven interest in finance (and/or some work experience).
  • According to CPA Insider, many of the Fortune 500 CEOs, CFOs and other business leaders have accounting backgrounds, while many of the top Wall Street executives, investment bankers, traders, and portfolio managers have finance backgrounds.
  • Finance might appeal to people who enjoy analysis and planning, are detail-oriented, enjoy technology, are interested in how money and investments work, and have strong quantitative skills.
  • Accounting is appealing to many of the same people who are interested in finance—detail-oriented, organized, logical yet creative thinkers. In addition, accounting might appeal most to those who excel at explaining complex ideas to others, are skilled at organizing information in a sequential, logical way, and are capable of seeing the big picture of a situation but also paying attention to the smaller details.

One of the best ways to get a feel for finance or accounting is to talk to recent college graduates of each major who are in the early stages of their careers. Here at FRCC, we can connect you to local professionals willing to share their experiences. You can also take a career assessment that identifies your strengths and helps you hone in on a career goal. Contact the Career Services office on your FRCC campus.

Here’s the great news: whatever route you go, you can’t go wrong. Accounting and finance are both excellent, exciting fields that offer many career options and continue to show strong, steady growth.

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ABOUT THE AUTHOR

Michaele Charles is the founder of Voice Communications and writes frequently for higher education institutions, small businesses, corporate clients, and others. She also is a fledgling children’s writer. In her pre-writing life, she worked in accounting and finance.