Comparing a CPA to Other Credentials

By Kenneth W. Boyd

Two credentials are similar to the certified public accountant (CPA) designation: chartered financial analyst (CFA) and certified valuation analyst (CVA). As you move forward in your career, you may consider getting one of these other credentials, along with your CPA designation. Many people who work in these two fields have experience as CPAs.

The chartered financial analyst (CFA) credential

A chartered financial analyst (CFA) uses several skill sets to perform analysis on both companies and investment opportunities. You can find out details about the designation at CFA Institute. To obtain this credential, an individual must pass three exams, which are referred to as levels 1, 2, and 3. Here are some of the topics tested on the CFA exams:

  • Quantitative methods: Many of these concepts are taught in statistics classes, which you’ve likely taken if you’ve completed an undergraduate business or accounting degree. Quantitative methods include time value of money, probability, and other types of analysis.

  • Economics: This area includes the study of supply and demand, business cycles, inflation, and foreign currency exchange rates.

  • Corporate finance: Corporate finance goes over the decision-making process of raising capital and investing capital in a business.

  • Portfolio management: This area covers the concept of portfolio management and wealth planning. These areas refer to decisions about the types of investments a money manager selects. CFA exams cover many types of investments, including derivatives.

If you’re more interested in analysis than generating financial statements, you may prefer working as a CFA.

The certified valuation analyst (CVA) credential

A valuation places a dollar value on assets that may be difficult to value. A good example is an intangible asset, such as a patent, customer list, or trademark. A CVA takes a set of financial statements and performs additional work to compute company valuations.

A business may need to obtain a valuation in several circumstances. When a buyer and seller are negotiating the sale of a company, the parties may hire a CVA to compute the company’s value. The price paid for the business may be very different from the book value of the assets, which is defined as assets less liabilities.

Most industries have valuation benchmarks that drive the price paid for companies in that industry. Say, for example, that clothing manufacturers typically have a sale price based on three times the annual sales in dollars. In that case, the buyer and seller will compute three times sales and include that amount in their negotiation of a price for the company. CVAs explain and provide this type of analysis.

CVAs may also be involved when the value of a company must be determined in a legal matter. If two partners are in a legal dispute over their share of the company’s value, a CVA may be retained to determine the value of the partnership.

You can find out more on the CVA designation at the National Association of Certified Valuators and Analysts (NACVA).