How Important is the CPA for an FP&A Analyst Role?

SlikRick's picture
Rank: Gorilla | 528

How important is the CPA designation for roles in FP&A at a F500? Currently staffed at a major retail client (think Gap/Levi's/Abercrombie) and am truly interested in working in FP&A. I feel that the FP&A track is well designed to one day position me for C-Level roles at a F500. Obviously my head is in the skys, but the Consulting --> Senior Financial Analyst --> FP&A Analyst --> FP&A Associate --> MBA? --> VP FP&A/Corp Controller? --> Director of FP&A/CFO seems feasible. I like the nature of the work, and from what I've gathered in my limited work experience, it seems as if most people start families and don't put in effort outside of the 9-5 grind once you hit a certain peak.

But on to my original question, how important is the CP&A designation for these types of roles?

Do I Need a CPA to Be in FP & A?

In FP&A roles, our users shared that having an accounting background and / or a CPA is very useful and, in some cases, required. However, some users shared that you can move up the ranks without a CPA degree; however, it is easier to advance with that certification.

pacman007:

I just started this role and can tell you that everyone in my immediate group has an accounting/CPA background. I am the ONLY person that was a finance major.

With that said, one CPA in my group was telling me how she thought getting the CPA was a waste of time since it does not help any in this role. We basically see how much money our trade group made and how much money they lost, where did the margins come from and are these margins sustainable with current market trends...it's really not rocket science but you definitely need to know accounting at the basic level.

I would say if you know someone within a company or if you know a headhunter well and can get him/her to vouch for you for an F&PA position then that's good but otherwise I don't think it's worth it to go for your CPA just to land an F&PA gig. Many of our top level executives don't have CPA's. If you really want to do F&PA at a major company, I would apply for a finance position within that company then eventually move into the F&PA position after a year or so.

MistaBooks:

I think that you will find that the majority of people working in FP&A have a Big 4 backround and thus have a CPA. I currently work at a Big 4 firm in a major market (audit), so obviously I interact with a lot of FP&A groups. All the public companies I have worked on have had FP&A groups backed with ex-big4. One of the main jobs of people in FP&A is to provide the auditors with all the needed data and to be able to explain their internal accounting - obviously big4 experience helps in that regard.

That being said, I have heard of people joining that group w/o prior audit experience.

User @808 shared that a CPA is a must have to move up in the industry:

808 - Consulting Associate:

You need the CPA. Yes, it is very possible to move up without it, but why would you want to handicap yourself like that? There is still a path to the top given your goals, but it's a relatively narrow path. If you have the CPA, you have a lot more breathing room to lateral. You don't know what future opportunities will come up, so the CPA is a good bet.

Another factor to consider is that headhunters love the CPA. It signals to them that they can make money on you, so they are much more likely to put in extra effort to get you into the F500 FP&A jobs you want.

_bird_ - Corporate Finance Analyst:

For a great role at a well-known company, the CPA is basically a must. Also, you will find that most fp&a roles are accounting focused or involve the consolidation of financials and then some variance analysis. Nothing wrong with those positions, but if you want a more interesting and dynamic fp&a role that auditors/big 4 accountants typically wouldn't be considered for, then you need to make sure that your resume makes you look like the best of the best in your field, and that means having the CPA.

Check out another thread on FP&A and the need for an accounting background on WSO.

What is FP&A?

Financial planning and analysis (FP&A) is the process of collecting and analyzing data on the company's long term financial plan and strategy.


Source: https://www.business2community.com/strategy/perfor...

You can check out a video about being an FP&A professional below.

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Comments (20)

Sep 19, 2012

I work as a F&PA analyst on the trade floor of a Fortune 5 company.

I just started this role and can tell you that everyone in my immediate group has an accounting/CPA background. I am the ONLY person that was a finance major. I can honestly say that if you're looking to get hired externally then I would look for a different way than just applying on a company's website. You will not be successful this way since most employers would want someone who breathes, eats and shits accounting day in day out.

With that said, one CPA in my group was telling me how she thought getting the CPA was a waste of time since it does not help any in this role. We basically see how much money our trade group made and how much money they lost, where did the margins come from and are these margins sustainable with current market trends...it's really not rocket science but you definitely need to know accounting at the basic level. You work very closely with Accountants (back office) but we're really not making any journal entries, we're just helping compile the data, then our main work starts once we have everything consolidated, at which point we go in and do our analysis and present the information to traders.

I would say if you know someone within a company or if you know a headhunter well and can get him/her to vouch for you for an F&PA position then that's good but otherwise I don't think it's worth it to go for your CPA just to land an F&PA gig. It's really not worth it. Many of our top level executives don't have CPA's. If you really want to do F&PA at a major company, I would apply for a finance position within that company then eventually move into the F&PA position after a year or so.

Good luck.

*Disclaimer: I am a CFA candidate so I may be a little bias. So if accounting is your thing and you want to move in that direction then a CPA would definitely help.

"Don't quit. Suffer now and live the rest of your life as a Champion" - Muhammad Ali

Sep 19, 2012

I think that you will find that the majority of people working in FP&A have a Big 4 backround and thus have a CPA. I currently work at a Big 4 firm in a major market (audit), so obviously I interact with a lot of FP&A groups. All the public companies I have worked on have had FP&A groups backed with ex-big4. One of the main jobs of people in FP&A is to provide the auditors with all the needed data and to be able to explain their internal accounting - obviously big4 experience helps in that regard.

That being said, I have heard of people joining that group w/o prior audit experience. It is not rocket science and most of the individuals in this group are generally assigned a couple of FS categories - so if you can master those areas, you shouldn't have a problem.

As with all jobs where you are trying to break in w/o the traditional back round, all you really need to do is convince the company you are up to the job and willing to go the extra mile to get up to date on any relevant accounting issues you might not be familiar with.

Sep 19, 2012

You need the CPA. Yes, it is very possible to move up without it, but why would you want to handicap yourself like that? There is still a path to the top given your goals, but it's a relatively narrow path. If you have the CPA, you have a lot more breathing room to lateral. You don't know what future opportunities will come up, so the CPA is a good bet. I don't think anything else (including networking) is a better use of your time at the moment.

Another factor to consider is that headhunters love the CPA. It signals to them that they can make money on you, so they are much more likely to put in extra effort to get you into the F500 FP&A jobs you want.

Sep 19, 2012

for a great role at a well known company, the CPA is basically a must. if you are making the jump from public accounting the expectation is that you will have your CPA. especially if you are working for a big 4 firm, they basically create a path to getting the CPA that is so certain and fool proof, you would really need to be lazy or a moron not to have the exams done within 2-3 years. unless you have something unique on your resume or can secure an interview through networking, i think it would be tough to land an interview without the CPA. also, you will find that most fp&a roles are accounting focused or involve the consolidation of financials and then some variance analysis. nothing wrong with those positions, but if you want a more interesting and dynamic fp&a role that auditors/big 4 accountants typically wouldn't be considered for, then you need to make sure that your resume makes you look like the best of the best in your field, and that means having the CPA.

Sep 19, 2012

agree with bird ^. fp&a is an extremely broad term and can encompass a lot of really boring/mundane/accounting related work and a lot of interesting/ad-hoc/strategic work that tends to be more modeling intensive. the type of work being performed by this group will vary from company to company so you need to know a bit about the specific group before you jump in. the groups doing the more interesting analysis will likely be made up of more former consultants, bankers, mbas, etc as opposed to being filled with purely ex-big 4 accountants so if you want to transition into that type of role you'll need to ensure you can bring more to the table than just a bit of auditing experience. worst case, you can else get your foot in the door in whatever capacity and then find out where the interesting stuff is being done and then fight to get into that group after earning a bit of respect within the organization and proving you're not just an 'accountant'

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Sep 19, 2012

I've worked in FPA for 10+ years in both F100 and small firms. If your path is VP, Controller, or CFO then a CPA is almost a necessity - it adds marketability and credibility to your future. But, I'll also say that a CMA is more relevant for FPA professionals. You may want to study for the CMA first then do a CPA on top of that once you decide that is the path you want to take with your career.

Oct 19, 2012

Check out AFP's new Certified Corporate FP&A Professional designation:

http://fpacert.afponline.org/

www.afponline.org/fpa

Oct 19, 2012

For Corporate finance, the hierarchy goes MBA > CPA ........................................>CFA. In general, the CFA is only really useful in treasury type roles, although I have seen some people in other areas get the credential as well. At your stage in your career I would advise you do wait a couple more years before starting an MBA. CPA is great to have, and for some positions, employers will look for an MBA or a CPA, meaning either will help your chances. I'm personally working towards my CPA myself currently.

Oct 19, 2012

MBA is definitely the most relevant. Although I'd say that I was surprised how many Directors had their CPA. But almost every manager has some sort of master's degree. Doesn't have to be a top 10, actually doesn't even have to be ranked. Just a close school to you is fine.

Oct 19, 2012

If you want to be an accountant get the CPA.

If you want to be a financial analyst get CFA.

If you want to be a better business person get MBA.

    • 1
Oct 19, 2012

From what I've witnessed at the CFO level, it generally goes something like this:

MBA
CPA
.
.
.
.
.
.
.
CFA

Oct 19, 2012

At the F500 company I work for, the most sought after credentials (in order) are the MBA, CPA, and CMA. I've never once seen a job posting within the finance function with the CFA referenced, and I don't know anyone in the finance department at my company who has it.

Best Response
Oct 19, 2012
  1. Most relevant: Neither are very relevant to FP&A, but CFA edges out the CPA in terms of functional content.

The CFA will cover a lot of portfolio management (I haven't taken it) and L1's Fin Reporting + the corp finance, quant methods and economics sections are probably all applicable to FP&A depending on what it is your team does. The CMA would be a more efficient option and probably be more recognized by colleagues, and then there's a new "FP&A Certification" which runs for like ~$1k + training mat'l and is issued by the Association for Financial Professionals. The FP&A cert actually looks to have great content, but as we veer into your second question, if you happen to earn it nobody will likely know what the hell it is. You're going to want something (top MBA or CPA) that is familiar if you decide to tack on something like the FP&A cert or the CFA (the latter would be ill-advised unless you want portfolio management/ER).

  1. most respected: The CPA is king for the purposes of FP&A and, later, CFO and similar roles in corporate finance.

Posters are saying they see a lot of CFOs with CPAs because the CFO oversees the accounting function, internal audit, FP&A, often IT - all material covered on the CPA exams. The exam covers a lot of internal operational-side content which is going to be valuable to anyone with C-suite aspirations.

That's the logical reason - the real reason is the CPA is the finance/accounting designation in the minds of most people, especially HR. It's equivalent to the bar exam to laypersons. Nobody outside of financial services knows what a CFA is, and in FP&A you are working intimately with managers who might not have much financial acumen at all. But they know that "CPA" means you understand "the numbers."

If you are concerned with learning functional content, the CPA's "BEC" section contains shallow coverage of topics ranging from basic corp finance to valuation to corp strategy. These items will be relevant to your job in FP&A. The "FAR" section goes into a lot of depth re: financial reporting and that can be useful to a point. But it's like using a bazooka to kill an ant. You will learn the mechanics underlying how financial reports are developed - stuff you won't really need in FP&A or banking. There's some value in knowing that "stuff," especially in fields like equity research where the accounting can get very complex. But day-to-day, a lot of the CPA content is not functional at the FP&A level. It primarily functions as a signaling mechanism to recruiters and is the premier designation within corporate finance circles, with the exception of a top MBA and maybe ibanking experience so far as FP&A is concerned.

All that being said, CPA > CFA:

  1. INFLUENCE: CPA will enhance your perceived value as a Trusted Advisor to corporate management. This improves your influence over decisions. Nobody will know what a CFA is except your fellow monkeys and prob the guys in corp dev or strategy (since many are ex-bankers and consultants who would have met CFAs)
  2. ROI - time and $: You invest ~$2-3k and a shitload of time into both exams but far more for the CFA. Assuming you qualify for a non-reporting license or certificate for CPA, you can become a CPA right after you pass the 4 exams. Timeline could be as little as 3 months, probably more (6-9). Note if you are seeking to be licensed in a state like MA, you just need a grad degree in bus/acct or 150 credit hours from a nationally or regionally accredited university to circumvent the experience requirement (you get a "non-reporting license," which is perfect for you since you aren't in public acct).

CFA will take 3 years to finish testing provided you pass each exam. Then you need 3 years of work experience influencing investment decisions or whatever the CFA Institute defines it as. That's a 6 year time horizon if you pass all 3 tests. It also assumes you want whatever brand of finance the CFAI demands you work in to satisfy the exp requirement (anything's negotiable and I know they'll budge if you go this route and pitch your FP&A work as qualifying experience).

  1. Job Security: CPAs have a broader universe of potential jobs from which to choose from where the CPA will benefit your candidacy. The exception is the CFA dominates the CPA in sell- and buy-side ER, asset mgt, portfolio mgt, etc. IBD won't care too much either way.
  2. Efficient: The CPA can be awarded right away if you have the right background. This frees up time with which you may allocate toward networking (more important than a CPA/CFA), working, sleeping, traveling, getting laid. Don't underestimate the value of not being a dork. That said, given the huge time commitment the CFA demands, you can feasibly fit in a secondary designation like a CMA. I'd cross this bridge when you come to it, as fatigue from studying for these stupid exams will alter your attitude over the next year....

also, the risk of being branded an "accountant" exists if you load up on accounting designations and shit. While CFA might seem like the ideal solution to prevent this, you won't benefit from it for years. Make sure if you transition jobs to work in a finance role in FP&A, and not one where you're doing any journal entries or whatever.

Anyways, those are my thoughts. About a year too late, but what can you do. Also, I'm about as experienced as you so take them with a grain of salt. I'm knocking out the CPA within 6 months, personally, and will devote my time after that to more productive endeavors. But definitely worth looking into. GL.

    • 4
Oct 19, 2012

Just a correction on your work experience for the CFA...its 4 years, but you could be doing it concurrently while taking the exam or it could have been work experience prior to taking the exam. So it isn't "6 years" as you quote.

    • 1
Oct 19, 2012

great discussion about finance. it will be helpful talking for me.

Oct 19, 2012
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