Can you Trust an Accountant to Manage your Finances?

Accounting and finance are two different disciplines for a reason, right? Speaking from a purely academic sense, correct. Accountants learn the details of monetary compliance (with the government, with industry standards, etc.). Basically, the accountant is there to make sure you don’t lose money from unnecessary fees, penalties and overpayments.

The primary concern of a financial manager is to learn how to make money.

This doesn’t mean that a trained accountant can’t be a good financial manager. Quite the contrary. Learning the rules of not losing money naturally segways into learning how to make it. The difference is in the expertise, personal savvy and enthusiasm of the individual. You can check out this guide on CrushtheCPAexam to learn how accountants are trained and the different types of certifications. In the US at least, you won’t find very many wilfully ignorant practitioners.

[Here’s the proof: Out of 1,332,700 trained accountants and 660,000 CPAs, only 80 received disciplinary censure in 2018, according to the American Institute of Certified Public Accountants (AICPA)].

Training an Accountant

In order to achieve a CPA in the United States, acolytes must pass the certification exam. There are three prerequisites to the exam, known as the 3 E’s.

1. The first E stands for Education – Sitting for the CPA exam requires 30 more credit hours than a full undergraduate degree, which is 120 units. International students usually take more than the combined 150 units to earn the proper status just to sit for the exam.
2. The second E stands for Experience – Depending on the state, a would-be accountant is required to have either two years of general accounting experience or two years of work experience in both tax prep and accounting. Although not mandatory in all states, the CPA exam certainly becomes easier with professional experience.
3. The third E stands for Exam – There are no direct study requirements for the exam itself. Technically, one might simply walk off the street, pass it and become a certified accountant. This doesn’t happen. Aside from the undergraduate and Master’s level coursework that people take around the field of accounting, the overwhelming majority of people also take a review course specific to the exam. Studying the coursework for review sessions may add another 1-2 hours of due diligence per night to a student’s schedule.

Can an accountant serve as a financial planner with this kind of training? Absolutely. Are most accountants financial planners? Absolutely not.

Why not?

Because even after studying money for the CPA exam, most students learn the most valuable lesson outside of the classroom: Making money is hard!

The moral of the story: Choose the CPA with a passion for making you money, not just someone with a degree or a certification. A drive to win combined with the expertise and training not to lose make for a dangerously profitable combination. These people may be few and far between. If you find one of them, don’t let go!