Is a Financial Analyst Role Harder Than Accounting?

Is a Financial Analyst Role Harder Than Accounting?

Stock Market Dynamics

The stock market is a complex system of intertwined elements, from buyers and sellers to stock prices and economic activity. A forex-trading-a-comprehensive-guide/” title=”Income vs Profit in Forex Trading: A Comprehensive Guide”>financial analyst who specializes in forex isn’t only concerned with the individual transactions, but also with the dynamics of the market as a whole. A financial analyst is expected to understand the ever changing investor attitudes, how economic policy changes could affect those attitudes, and how news and events could influence market trends. Analyzing the movement of the market on a daily basis, and then anticipating longer-term trends is a fundamental aspect of a forex analyst’s work.

Forex Trading Principles

Forex trading represents a unique challenge due to the sheer volume of transactions that take place on a daily basis. A forex analyst needs to be familiar with the concepts of leverage, hedging and macroeconomic indicators. Knowledge of currency pair correlations, technical analysis, and other market-driving factors is also necessary for any aspiring forex analyst.

Forex and Accounting Differences

The two professions involve different skill sets. Accountants must be meticulous and detail-oriented to record transactions, but forex analysts are more concerned with interpreting the raw data. Furthermore, accounting is heavily focused on historical and ongoing financial performance, while analyzing forex involves looking ahead to predict future trends.

It can be argued that financial analysis is more difficult and complex than accounting. To be successful, a financial analyst must have a heightened level of expertise and knowledge of the stock market. This involves understanding the subtleties of the interdependent players and how they can influence the future state of the market. In contrast, an accountant must apply a set of established rules and processes to ensure the accuracy of the financial statements.

All in all, financial analysis and accounting are two distinct disciplines that one might pursue. A financial analyst may be more capable of predicting future market trends than an accountant, but knowledge and experience in both areas can lead to a more comprehensive understanding of the way the economy works. With the right mindset and the necessary expertise, anyone can succeed in either of these two disciplines.

What Skills Are Needed For Accountants And Financial Analysts?

Accountants and Financial Analysts both specialize in related but different tasks while managing finances. Accountants emphasize financial reporting, compliance, and tax-related skills. On the other hand, Financial Analysts focus on financial analysis, investment performance assessment, and offer consultancy services. To be successful in either role, a combination of hard and soft skills is a must. Among the soft skills needed are analytical thinking and attention to detail. Good writing ability is necessary for data compilation and reporting. For financial analysts, communication and leadership skills are also essential.

Exam Pass Rates

The CFA charter is a recognized global standard for measuring the competence and integrity of financial analysts. The CFA program exams challenge even the best finance professionals, and the CFA Institute reports that on average, only one in five candidates finish the three levels of the exams. On the other hand, the CPA exam is considered to be significantly less difficult, and the American Institute of CPAs reports that, as of 2017, the average pass rate for the CPA exam was 56.2%.

Recommended Amount Of Study Hours

The CFA Institute sets a minimum amount of recommended study hours for each exam. Passing the CFA program exams requires an average of 300 hours of rigorous study for Level I and 600 hours for each of the following levels. Additionally, it’s necessary to practice and study hard for additional hours to be able to pass the exams. By comparison, the total amount of time recommended by CPA candidates to prepare for the exam and be successful is estimated to be between 150 to 250 hours, depending on different factors and experiences.

In conclusion, there’s no doubt that the CFA exam is more difficult when compared to the CPA exam, with it requiring much more time and dedication to pass. Creating a study plan to cover all the essential topics is key for success in either exam, and the reward of obtaining one of these charters will be well worth the effort.