CPA vs FRM

The decision between CPA vs FRM depends on whether you require a universally recognised accounting qualification (CPA) or a professional risk management certification (FRM). The two certifications are contrasted in-depth in this blog so you can determine which path aligns best with your financial goals.

What is the difference between CPA and FRM certifications?

Introduction: Understanding CPA and FRM Certifications

Choosing between CPA and FRM means weighing two completely different finance credentials. The CPA (Certified Public Accountant) leans towards accounting, auditing, taxation, and financial reporting, whereas the FRM (Financial Risk Manager) highly concentrates on risk, quantitative models, and financial markets. Understanding what each one is all about, how they differ, and which one suits your interests the best would help you decide wisely.

What does CPA cover, and what are its main features?

What is CPA, and What Does It Cover?

The CPA certification requirements cover accounting, audit, tax, ethics, and financial reporting. The CPA exam requirements usually involve passing four test sections: Auditing and Attestation, Business Environment & Concepts, Financial Accounting and Reporting, and Regulation. As part of the CPA course, the candidate also must qualify for the experience requirements and a state- or region-based licensing or certification. 

The CPA certification requirements are stringent: you usually need a specified number of university credits toward a degree in accounting and business, as well as professional experience as a student or intern with a licensed CPA. The syllabus puts your detailed knowledge of accounting standards (such as GAAP or IFRS), regulatory frameworks, tax law, and auditing practice to the test. The students preparing for the CPA learn financial statement preparation, audit, ethics, and assurance skills which are used in corporate accounting, public practice, or consulting.

What are the features and scope of FRM?

What is FRM, and What Does It Cover?

The FRM certification is managed by GARP (Global Association of Risk Professionals) and is highly respected by risk management professionals. FRM covers market risk, credit risk, operational risk, risk modelling, value at risk (VaR), and regulatory risk. FRM is more finance-market and quantitative than the CPA.

Although the CPA vs FRM duration could differ significantly, the FRM pathway tends to be shorter for work experience, but anticipates strong familiarity with the fields of statistics, derivatives, and financial markets. FRM does not place a strong focus on tax law or audit, as the CPA does. Instead, it emphasises risk measurement, monitoring, and risk mitigation plans, financial markets, and financial products.

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What are the key differences between CPA and FRM?

Exam Structure & Levels

• The CPA exam is normally a four-section test, all computer-based, each measuring a set of competencies (audit, law, accounting, business environment).
• FRM consists of two parts (Part I and Part II); both parts are exam-based, and they cover risk management, models, markets, and regulation.
• As for CPA vs FRM duration, for the majority, CPA vs FRM the CPA takes longer because of education requirements, state licensing, and potentially a state or region work experience requirement; the FRM takes less time when the tests are completed and risk‑related experience is gained.

Areas of Specialisation & Syllabus Focus

• Specialisations in CPA are constrained: All the aspirants study the same syllabus and later may choose whether they want to practice in audits, tax, or corporate accounts.
• FRM is highly specialised: The syllabus is less deep in terms of audit or tax but deeper for statistical models, risk analysis, derivatives, credit risk, and quantitative methods.
• Comparing CPA vs FRM, which is tougher in specialisation: FRM may appear tougher if you do not like quantitative models; CPA may appear tougher in regulatory and accounting law.

Eligibility & Experience Requirements

• CPA exam requirements usually include a bachelor’s degree or college courses in business and accounting, and occasionally work experience serving under licensed CPA supervision. The CPA certification requirements vary by state but are strict.
• FRM consists of passing Part I and Part II and at least professional risk management work experience (usually two years), but the academic record is less stringent; you won’t necessarily need studies in accounting.
• Considering the CPA vs FRM duration, the completion time of all requirements (education + exam + experience) would tend to be higher for CPA in most of the nations/jurisdictions; FRM would offer flexibility of entry but would demand a high level of competency.

What career paths & job roles can you pursue after CPA or FRM?

Once you acquire either certification, your work responsibilities branch out:

• CPA holders tend to work as financial controllers, tax advisers, chief financial officers, forensic accountants, or auditors.
• FRM holders commonly work as risk managers, risk analysts, epidemiologists of financial stress, credit risk analysts, market risk analysts, operational risk analysts, financial regulators, or quantitative modellers for banks, hedge funds, or consultancies.
• Labour markets for accounting/CPA jobs are strong for accounting firms, corporate finance functions, and the public sector; employment positions for FRM are often highly niche, commonly in investment banks, risk functions, and financial stability firms.

What is the salary potential & market demand comparison between CPA and FRM?

• Salaries for the CPA-certified professionals tend to be high and steady for accounting and auditing roles, with yearly increments as one rises through experience and/or public notability or years spent working for large institutions.
• FRM holders earn significant salaries for risk-intensive jobs, particularly if their background is strong and their employer values risk management highly.
• In risk‑demanding markets (regulatory markets after the financial crisis, hedge funds, and banks), demand for FRM‑certified professionals also increased and sometimes equalled or surpassed the demand for CPAs.
• For the CPA vs FRM duration, a shorter pathway (beyond passing the test) to FRM roles can translate into earlier access to the job compared to the case for the CPA, which might take longer for prerequisite experience.

Which certification aligns best with your interests & strengths?

• If you are interested in law, accounting, taxation, auditing, regulation, or financial statements, the CPA would suit you best.
• If you enjoy quantitative modelling, risk measurement, markets, and statistics, then FRM could suit you better.
• Think also of CPA vs FRM, which is tougher. Which one would you, as a person, find more difficult? The more difficult one may well be the one that does not suit your experience, so if you don’t like figures and models, FRM would be more difficult than CPA, and vice versa.
• Consider also your future professional goal: public accounting or leadership of audits, CPA if desired, risk management, trading, risk departments, or FRM.

What are the drawbacks or limitations of CPA vs FRM?

• CPA can be restrictive if one’s interest is risk modelling or financial markets only; the syllabus might not cover advanced quantitative risk methods. Additionally, the requirements for the CPA exam for certification might be stressful (education, accounting credits, and compliance).
• FRM is extremely specialist but does not equip you for taxation, audit, or general accounting practice; it may not carry as much prestige in firms undertaking accounting or corporate finance other than risk. The title of CPA may, in a few instances, come ahead of FRM.
• In terms of CPA vs FRM duration, as the CPA frequently mandates extra prerequisite credit hours or experience, you could take longer before getting a full credit or promotion compared to taking the FRM for a risk‑driven career.

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Conclusion: Which path should you choose based on your long‑term goals?

If your long‑term goals are firmly in accounting, audit, taxation, or public finance, the CPA certification does those better. If you prefer instead to work in risk management, risk divisions of banking, financial markets quant work, or regulatory risk, then FRM may suit you better. Keeping CPA vs FRM duration, CPA exam requirements, CPA certification requirements, and CPA vs FRM, which is tougher, in mind allows you to decide what resources, time, and prior knowledge you bring. In a nutshell: base your decision on your strengths, interests, how much education & experience you currently have, and where you see your career five to a decade from now.

FAQs on CPA vs FRM

Which is harder: CPA or FRM?

CPA vs FRM, which is tougher, also relies a lot on your background; a person strong in quant finance may get FRM easily, but a person with accounting studies may get CPA easily, but both certifications are tough standards and have challenging syllabi.

Can someone do both CPA and FRM?

Yes, numerous professionals pursue both CPA and FRM as a means of diversifying their expertise; it can be done, but you must meet each certification’s test requirements, experience, and time demands.

Is FRM more specialised than CPA?

Yes, FRM is much more specialised than the CPA, which focuses on risk management, quantitative modelling, markets, and regulatory risk, but the CPA covers general accounting, auditing, taxation, and financial reporting.

Which offers better overseas opportunities: CPA or FRM?

Overseas opportunities differ by region and demand: CPA is highly respected internationally for accounting, auditing, and public finance, but the FRM holds value in financial centres and institutions with risk interest; your exposure, experience, and specialisation will dictate which offers you more opportunities overseas.

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Co-Founder & CEO at Zell Education

Education

• ACCA – Association of Chartered Certified Accountants, Finance (2011 – 2014)
• Bachelor of Commerce (BCom), Financial Markets from H.R. College Of Commerce & Economics (2010 – 2013)

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Mumbai, India

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ACCA Certified