What are the differences between Finance and Accounting majors?
What is the differentiating material and curriculum that makes the distinction?
A compare and contrast/ pros con list would be appreciated #business #finance #accounting #cpa #analytics
Think of it as Accounting being the day-to-day management (recording) and assessment (reporting) of the financials, while Finance is the long-term strategy (planning future transactions). If you don't know how things work today and what is going well, it's pretty hard to successfully implement a strategy for tomorrow because you may not understand how it will actually work.
Hi Bridget! Both are great majors and can open up different career opportunities for you. I was a Corporate Finance and Accounting Major during my undergrad because I could not make a decision between the two! From what I learned, accounting is historical in nature and finance focuses more on the future. My finance classes were primarily focused on analyzing the financial health of companies, evaluating financing options, and understanding the different types of investment tools. My accounting classes were typically based on journal entries for transactions, laws and regulations surrounding business, and fraud. In my opinion, accounting provides a fantastic base for business and it is much easier to learn about finance after having a background in accounting. A good thing to keep in mind is if you were planning on sitting for your CPA, an accounting background would be recommended, and in some states, necessary. There are so many different avenues available to you with either - you can't go wrong! Best of luck!
Finance is more future oriented, while Accounting deals mainly with historical transactions. That said, there is a huge overlap between the two. You will have to take core classes for both majors, and in many schools, there is simply a Business Administration major with various emphases, such as Finance, Accounting, Marketing, Operations, etc. I would choose a school with a good Business/Economics department and develop a relationship with one or more professors (or grad students) who can help you determine your specialty after a couple of years.
I think of Accountants as people who accurately record financial activity per standards (GASB/FASB) and assemble monthly/quarterly/annual reporting in the form of financial statements. I think of Finance professionals as people who use financial and operational data to assemble reports for performance KPIs, forward looking/planning initiatives, as well as some accounting reporting. This is not a hard rule, but in my experience finance professionals tend to be more closely tied to the business and operations.
Finance is an estimate in the future of cash flow. For example, finance would be about calculating estimated cash inflow of a project (including discounting the present value of money). It is definitely more uncertain and contains more estimates than accounting does.
Hope this helps!