Accounting vs Finance Degree: Complete Guide to Making the Right Choice
Deciding between an accounting vs finance degree may seem daunting but don't worry, you are not the only one thinking about this.
According to the Bureau of Labor Statistics, accountants and auditors have an unemployment rate of just 2.0%, and bookkeepers see just 1.7%. On a similar note, 25% of all full-time postgraduate students in the UK were enrolled in accounting and finance programmes.
The message is clear: both accounting and finance offer tremendous job security with an increasing demand. But which option is better for you?
In this blog, we'll walk you through the differences between going for a finance vs accounting major to help you identify the best fit for your career.
What Does an Accounting Degree Cover?
If you are pursuing a degree in accounting, you will study the policies and procedures that document financial records and track business transactions.
You'd do this while studying the key topics you need to understand. To get the most out of your studies, you'll focus on the basics, such as financial accounting. This means preparing and analysing financial statements.
You will learn the steps involved in recording, itemising and summarising actual business transactions and how this affects the day-to-day activities of a business.
You will also study management accounting. You'll also learn how to prepare budgets, analyse costs and provide management with internal financial reports.
These are little details important for decision-making.
Audit procedures are also crucial. You will learn what it means to analyse financial records to ensure that they are reliable and accurate.
Approximately one-third of your degree program is dedicated to tax accounting. You will understand the various tax regulations, learn how to prepare tax returns and understand how different business structures affect tax obligations.
In many accounting degree programs, you will also cover some concepts related to forensic accounting, particularly the detection and investigation of fraud.
This will prepare you for your career either as an auditor, chartered accountant or tax accountant.
What Does a Finance Degree cover?
A finance degree enables you to understand where and how money flows through the business world. You will study finance principles and corporate finance roles and their relative influence on a successful organisation.
For example, you will study investing decisions and their rationale, the potential impact of activities like debt and investment, and the key issues driving financial management rationale and planning.
Your finance program will include investment analysis. In your finance course, you will analyse different asset classes, study techniques for building diversified portfolios, and examine the purpose of risk assessment for different assets and asset classes. Personal finance modules will teach you about looking at individual planning.
In contrast, corporate finance modules will look at how corporations raise additional resources or capital and how companies allocate resources strategically and efficiently by doing so.
Financial planning and analysis will also form a significant part of your study program. You will learn how to forecast resources and investments, develop budgets, and evaluate business performance.
The international finance modules will provide you with an understanding of global financial markets, currency exchange risks, and multinational approaches to finance.
Your finance degree will include some or all aspects of financial markets and institutions. They will cover how banks, insurance companies and investment firms operate. In many finance degree programs, you can specialise, for example, in investing banking that engages with activities such as mergers and acquisitions or capital markets.
Wherever possible, the teaching approach will focus on practice, case studies, and simulations. You will analyse and evaluate financial scenarios, develop your investment recommendations, and build the skills and knowledge associated with roles such as financial analyst, investment banker, or financial advisor.
There is a focus on enriching your program with practical applications and activities that will be delivered to prepare you for a career in finance.
Accounting and Finance Degree Entry Requirements
To be accepted into an accountancy or finance degree, you need to satisfy specific entrance criteria. In general, most universities in the UK require you to obtain grades of between BBB and AAA in A-Levels, depending on the rank and entry profile of the institution.
A-level maths is often essential, but many courses require you to achieve at least a B grade, which is higher than the grade needed for the majority of courses in other disciplines.
Essential requirements for degree programmes in accounting and finance normally include grade C/4 or equivalent in English Language (or English Literature—normally but not always depending on university choice) and Mathematics at GCSE level.
Some universities will require and others will recommend other subject(s), e.g., Economics or Business Studies, but it is not always necessary. International applicants are also required to show recognised English proficiency.
This would mean demonstrating an overall IELTS score of between 6.0 and 7.0, although the band scores on particular skills needed may depend on the institution and course of study.
Alternatively, regarding grades, UK universities tend to take the BTEC Extended Diploma or Scottish Highers qualifications, which are widely accepted.
If you wish to study BSc (Hons) Accountancy, perhaps having A-levels designated as science might help you, but there is no formal requirement. Most universities will accept an Access to Higher Education Diploma if you are a mature student returning to education.
Graduate entry requirements are often higher for master's degrees, and institutions typically expect students to have achieved at least a 2:1 or 2:2 in an undergraduate degree.
The subject matter also needs to be related. Many institutions have suggested that work experience/professional qualifications would compensate for grade levels specific to accounting and finance courses.
Professional qualifications, such as AAT (Association of Accounting Technicians), can offer alternative entry paths to a degree, making accounting packages far more accessible to career changers wishing to enter accounting and finance.
Accounting and Finance Career Paths and Salary Expectations
When considering a career path in accounting or finance, there are many options available with good pay.
According to the Bureau of Labour Statistics, the median annual wage for accountants and auditors is $81,680, and the employment outlook in these occupations is projected to grow 6% from 2023 through 2033.
According to ONS statistics, chartered accountants in the UK earn an average of £46,000 a year, and newly qualified management accountants may expect to earn between £65,000 and £80,000 a year.
Accounting has some traditional career paths, such as being an auditor, tax accountant, or management accountant. Public accounting firms are often the best places to get your initial training and experience. Many professionals end up working in industry after working for public accounting firms or perhaps even opening their own accounting practice.
Corporate finance roles would include being a financial analyst, where you would analyse the viability of investments to assist management in making important strategic and appropriate decisions.
Careers for finance professionals include investment banking, financial advising, or portfolio management. Most of these roles have higher average starting salary levels than accounting roles, particularly in major financial centres.
There are specialised areas of finance to enter, such as forensic accounting and international finance, that are less traditional but offer great career paths as well.
Both accounting and finance are important fields. They offer job security and good career advancement opportunities and are equally the same at senior levels when the profession matters less.
How to Choose the Right Major Between Accounting vs Finance
When deciding between an accounting or finance degree, you have to consider multiple factors so you have a clear picture of your natural interests and career goals.
If you enjoy working with financial records and would like to represent firms in making sure their records are reliable and accurate. In that case, you are likely to be suited to an accounting major.
However, if your interests lie in operational investment decisions, market analysis, and strategic financial planning, a career in finance may be the right choice for you.
Consider your willingness or tolerance for adherence work in accounting vs. finance. Accounting is largely about following rules that individuals and businesses must strictly adhere to.
Conversely, finance potentially provides more creative opportunities, as it involves making decisions guided by strategic thinking. Personality traits are an important factor in determining whether you are better suited to an accounting or finance major.
Consider your long-term career goals. Do you see yourself working as a certified public accountant who helps various businesses or clients establish good record-keeping?
Or maybe the idea of being an investment banker or financial advisor is more appealing? The answer you provide indicates which accounting and finance path is suited for your aspirations.
Both accounting and finance degrees are associated with positive career opportunities and job security. At the senior or executive levels, the difference between finance and accounting becomes less relevant because professionals have areas of expertise in both roles.
Many students select a combined degree in accounting and finance to allow for all potential educational paths. Regardless of your choice, both paths will provide a rewarding career.
Conclusion
Remember, there's no wrong choice here. Many successful professionals combine knowledge from both areas throughout their careers.
The key is understanding your interests, strengths, and long-term goals. Both accounting and finance professionals play vital roles in the business world, and demand continues growing for skilled graduates.
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