The career paths that you can join on the basis of a finance degree or an accounting degree can both be rewarding and lucrative with a great deal of job security, so if you are torn between which one you should be studying, the determination could come down to which one is harder to master. Both accounting and finance are challenging subjects that require a great deal of dedication and skill, but you might find one easier than the other.
What is the difference between accounting and finance?
There is quite a lot of overlap between accounting and finance and they are both important roles in the business world, but there are some major differences between the two. And this is reflected in the different subjects that you will study during a finance degree compared to an accounting degree.
Put simply, accounting focuses on tracking the past whereas finance focuses on predicting the future.
If we look at Auditox Accountancy for example, an accountant will be concerned with the day-to-day flow of money, how it was spent and where, and in ensuring that all financial records are correct and up to date. In contrast, someone in finance will be concerned with financial planning, money that will be spent in the future, how it will be spent and on what, and on predicting what the outcome of that spending will be.
Another difference between the two is that accounting is very detail-oriented and precise whereas finance looks more at the broad brushstrokes of the big picture. So one of the determinants of whether you will find accounting or finance easier comes down to your personality. Are you naturally a person who focuses on the minutia or are you more drawn to thinking about the big picture?
Professional accounting is the language of business. All businesses, including finance, are built on the foundation of the accounting that goes on beneath the surface. Some people, therefore, consider accounting to be a “more important” and fulfilling career path because, without accounting, businesses can’t function. This does, however, ignore the importance of finance. Accounting doesn’t make money. It is only concerned with documenting financial transactions that have occurred in the past. Finance, on the other hand, uses financial data to help businesses grow and develop, and to make money. So without finance, businesses can’t get any bigger or more successful.
Is finance or accounting harder?
Taking into account those personality differences, there are also differences in the content of finance and accounting that can determine that one is harder than the other. Generally speaking, people consider accounting majors to be more difficult to study and pass than finance majors. And there are a few different reasons for this.
The content of accounting majors is, on average, much more technical than for finance majors, and this can make it more difficult. It is focused on strict arithmetic rules, the law, and precise accounting processes. In contrast, finance degrees are much more focused on theoretical concepts with a wider focus that encompasses economics, business, banking, some accounting, and more. Because, at an undergraduate level, these theoretical models out of necessity are each only covered briefly, this can make it easier to study and to pass. If you take graduate finance courses at a higher level, then the content becomes much more technical and more difficult.
What can I expect to study in a finance or accounting major?
Every university will offer a slightly different course content for both finance and accounting but you can expect to cover many of the same principles.
Accounting information systems
Professional standards and ethics
Macro and microeconomics
Preparing financial statements
Analysing financial trends
As you can see, there is a fair amount of overlap between the two subjects. For instance, you may learn about financial accounting and preparing financial statements whether you study accounting or finance, but learning about something like corporate finance is generally confined to a finance degree only.
Where can finance and accounting take me?
There is a wide range of career paths for both accounting and finance, and it can be helpful in many instances to have training in both once you reach the world of work. This is especially the case if you want to move high up the ranks of business. Many of the top CEOs, for example, would have had the training to become a certified public accountant. Understanding and utilizing accounting statistics, assessing monetary resources, preparing detailed financial statements, and other core skills can be extremely useful in the world of high finance and financial management.
Generally speaking, however, there are also specific career paths that would suit one or the other. Accounting firms, for example, would usually only hire those with specific accounting qualifications, such as chartered certified accountants. Whereas a financial advisor or financial analysts would generally have a background in finance, and potentially a specialized postgraduate degree in applied finance.
Accounting professions include:
Chief financial officer
Finance professions include:
Hedge fund trader
Credit risk manager
If you are trying to decide whether to study accounting or finance, the question of which one is more difficult can be one of the deciding factors. At the undergraduate level, many people consider accounting to be a more difficult degree. Once you move further up from that level, however, there isn’t a huge amount of difference between the two. They are both difficult but in different ways.