Accounting vs. Finance: What’s the Difference?
There is plenty of overlap between finance and accounting, and for incoming and current students alike, it can be hard to select which path to take. Simply put, accounting has a narrower focus than finance, which can cover a range of specializations in the business, economics and banking industries.
Deciding between an accounting and finance degree
They are many similarities and differences between the two professions. We'll outline each and what you should look for when deciding. And don't rule out double majors — Associate Professor of Finance Brett Olsen said they are "highly sought after in any size of business and in every industry sector."
Looking forward or backward
On their faces, finance is a more forward-looking practice, whereas accounting is rules-based and considered a backward-looking career. Think about it: The main role of accountants is to keep track of books or go digging through financial history. Finance careers focus more on projections, investments and recommendations.
But don't feel locked into a decision once you make it. Accounting and finance jobs often go hand-in-hand, and it's important to understand one to excel at the other.
"Students drawn toward the accounting field are attracted by numbers, by the rules-based practices, and by the structure that accounting provides," Olsen said. "Finance students are a bit more analytical in the sense that they must use the information, largely provided by accounting's financial statements, to develop strategies, ask questions and make decisions toward generation value. These are two very complementary careers."
As Olsen stated above, people interested in finance are more analytical, but they also have an attention for detail, like to think ahead and are concerned about adding value. There is also a need for business development in some cases. For those interested in accounting, it's important to be procedure-oriented and highly concerned with accuracy.
Joseph Ugrin, accounting department head, says there is a lot of career crossover between finance and accounting in many industries. Where accounting and finance can differ, though, is through the public accounting track. A large percentage of accounting students become Certified Public Accountants (CPAs), then move into leadership positions later. Whereas finance students typically go into the investments side, or become Certified Financial Analysts, before moving into leadership.
For the most part, these two career paths dovetail, and Ugrin sees many former accounting and finance students who become controllers or chief financial officers.
"I think either direction is going to open up a lot of opportunities," Ugrin said. "There's a lot of overlap [with careers] between the two, and a lot of them end up working in industry."
As Ugrin said, whatever path you decide to take, there are plenty of chances to make it your own. If you want to see what the Univeristy of Northern Iowa College of Business has to offer in each major, head to the accounting and finance pages for more information.