Accounting and finance continue to grow in prominence with their increasing utility in a modern workplace.
With specializations, certifications, and professional bodies of knowledge, they are no longer just support functions.
Most students pursuing these fields, however, often end up unable to differentiate between the two.
The primary difference between them is that accounting is a part of finance and has a narrow focus, while finance has a much broader scope and covers an array of specializations.
Many other differences need to be understood before making a decision, and this article will briefly guide you through the same.
Accounting Vs. Finance – The Basics
Though accounting and finance can be perceived as belonging to the same family, each has a separate identity and plays an important part in running a business.
In simple words, accounting is about money that is spent, while finance is all about future spending. It looks at business assets and helps plan how they will be utilized.
Accounting takes care of the daily cash flow in a business, recording whatever takes place and creating reports to monitor whether everything is in line with regulations, standards, and laws.
Accounting focuses on report generation for the finances of companies, governments, individuals, and agencies. On the other hand, finance emphasizes using this information to analyze expenses, project future growth, and devise financial strategies for the business.
Some of the primary tasks handled by accounting professionals include:
- Keeping accounts updated
- Ensuring that transactions are correctly processed
- Following accounting regulations, policies, and updates
- Verifying the accuracy of financial statements
Finance involves working with banks and financial institutions and deals with money management and investments. Some of the main tasks undertaken by finance professionals are:
- Ensuring optimal fund distribution
- Making sure the client always has the necessary funding available
- Managing capital and mitigating risks
What Do Accounting Degrees Cover?
A degree in accounting provides a foundation for specializations in the area and other careers. Accounting jobs involve using and analyzing financial information to gain insight into the business status.
This should cover everything from bookkeeping to managing financial statements and balance sheets.
These professionals generally focus on the present and past records, get involved in creating reports, and even extend their participation in planning, decision-making, and other processes.
When you study accounting, you learn how a business distributes its resources and the laws governing it.
You also develop skills like analyzing financial reports and financial strategies and will learn more about the ethics of accounting practices and gain an understanding of the business as an industry.
Accounting careers can be typically pursued with just a bachelor’s degree. However, you can go for a postgraduate degree to gain specialized knowledge in the area, along with various certifications such as the ACCA, CPA, CMA, etc., which often require extensive study and passing of relevant exams.
There are various courses and study materials available for these certifications to better guide prospective students.
What Do Finance Degrees Cover?
A degree in finance is a great way to make a career in financial services across banking, business, and other sectors. As suggested by survey reports, finance jobs are generally more lucrative as compared to most accounting careers.
The reason is finance professionals take care of the current and future financial management in a company rather than just recording figures of the income and expenses.
Those who hold a degree in finance handle the responsibility of analyzing and predicting the growth and profit potential, utilizing accounting stats and reports, assessing capital resources, and finding future funding options.
When you study finance, you have a broader scope and learn about investments, financial analysis, and stock markets.
You study global financial markets, develop skills like forecasting the future performance of a business and analyzing financial strategies.
Accounting Vs. Finance – Subjects and Specializations
As a student, you can choose between studying for a general degree in accounting or finance or choosing a specialization. Postgraduate-level study commonly offers specializations to let you acquire diverse knowledge and skills and widen your career scope.
When you study accounting, some of the topics you can expect to learn include Financial Reporting, Risk Management, Business Foundations, Taxation, Microeconomics, Management, and more. Those who choose this route can specialize in Taxation, Auditing, Management Accounting, International Accounting, and Risk Assessment.
Another popular option is Forensic Accounting which covers real-life case studies to give a comprehensive understanding of the way legal proceedings utilize accounting in cases associated with bankruptcy, fraud, insurance claims, corporate ethics, and more. Accounting students can even choose to do independent research with a Ph.D. degree.
On the other hand, finance students study subjects like Principles of Economics, Private Equity, Financial Analytics, Investment and Portfolio Management, Venture Capital, Corporate Finance, and others.
Common specializations available for those who pursue a degree in finance are Financial Evaluation, Corporate Finance, Investment Management, Financial Modelling, Derivatives, Financial Regulation, Capital Markets, and more.
Though these subjects are taught during the undergraduate level, they are available as complete courses at postgraduate level degree programs.
Some other options available for finance students include Financial Planning, International Finance, Financial Engineering, Sustainable Finance, Banking, etc.
Accounting Vs. Finance – Career Options
The demand for accounting and finance professionals is relatively high in the market, and there is no sign of it slowing down anytime soon. Some of the sectors expected to offer the most jobs to these people include consulting services, accounting, bookkeeping, financial investment, and computer systems design.
Insurance companies, accountancy firms, investment institutions, banks, and public agencies are a few of the potential employers for those looking for a career in accounting or finance.
Multi-national financial services companies also form a big part of these offers. Though opportunities exist in plenty, the landscape is still competitive, and a specialized postgraduate degree is believed to be a great asset to help stand out.
A degree in accounting can take you to the path of careers like Auditor, Chartered Accountant, Investment Advisor, Budget Analyst, Tax Manager, Treasurer, and more, and you could end up working in small to large-scale organizations and even non-profits.
On the other hand, the pathways for students taking a degree in finance are quite broad, ranging from Finance Technician, Tax Consultant, and Investment Analyst to Banker and even an entrepreneur.
Accounting Vs. Finance – Which Is Better?
Which of the two you should study ultimately comes down to personal preferences and interests.
Both accounting and finance are in-demand areas and allow graduates to grab high-paid positions and make secure careers.
You can also choose to work independently, for a specialized firm, or a multinational company.
No matter which discipline attracts you more, make sure you acquire the knowledge of subjects and develop important skills to acquire your dream job.
You can also read: