Financial Accounting Degree Concentration
| Accounting.com Staff Modified on March 22, 2022
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Financial accounting is a branch of accounting focused on the external reporting of a private or public organization's financial information. Students who opt for a financial accounting concentration go on to pursue a breadth of careers after graduation. For instance, they may work as financial accountants, financial analysts, budget analysts, and auditors.
Businesses always need individuals with specialized knowledge of financial accounting and reporting. Data from the U.S. Bureau of Labor Statistics (BLS) indicates that there are nearly 1.5 million accounting-related jobs in the country, and the BLS projects accountants to experience continued job growth over the next several years.
Accounting students can choose from many relevant concentrations. Read on to learn more about the financial accounting concentration, including benefits and typical coursework expectations for this option.
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What Is a Financial Accounting Concentration?
Financial accounting focuses on the analysis and external reporting of businesses' financial information. Financial accountants use accounting concepts and principles to analyze financial statements, evaluate businesses' financial health, and externally report findings to potential investors or government agencies.
Financial accounting concentrations differ slightly from general accounting degrees in that their coursework hones in on financial statement analysis and financial reporting. Financial accounting concentrations prepare students for careers in business and accounting as financial accountants, financial analysts, budget analysts, financial planners, and business managers. Some financial accounting courses prepare students to sit for the certified public accountant (CPA) and certified management accountant (CMA) exams.
A variety of undergraduate and graduate programs -- including many bachelor of science in business administration, MBA, and master of accountancy (MAcc) programs -- offer this concentration. Business majors who pursue a financial accounting concentration gain broader business knowledge through core coursework and specialized knowledge of financial accounting through concentration coursework.
In general accounting undergraduate coursework, students learn traditional accounting theories and principles. Financial accounting coursework, however, emphasizes leveraging those accounting theories to value companies and report findings to external stakeholders. Students pursuing a bachelor's degree with a concentration in financial accounting take a series of courses that teach them how to analyze financial statements.
Financial accounting concentrations may also be called concentrations in financial analysis or accounting for finance. At the bachelor's level, concentrations typically feature four courses, or 12 credit hours.
A concentration in financial accounting at the master's level may suit students pursuing an MBA or MAcc degree. Graduate-level financial accounting coursework concentrates on the analysis of financial statements, financial modeling, and predictive data analysis. Students develop skills in forecasting revenues and expenses and synthesizing financial information to create financial reports.
At the master's level, this concentration usually includes three courses, or nine credit hours.
Why Get a Financial Accounting Concentration?
Concentrations allow students to merge their career goals with their academic endeavors. By choosing a financial accounting concentration, students gain specialized knowledge in auditing, reporting, and other topics. The list below explores some of the benefits of a financial accounting concentration.
- Blended Knowledge of Business and Accounting: Business students with a financial accounting concentration gain broad business knowledge through general coursework and specialized knowledge of financial accounting through concentration coursework. This blend of business and accounting knowledge serves students well in their professional life.
- Specialized Financial Accounting Knowledge: Since concentrations are incorporated into students' degree plan, students can explore an additional field without having to take more coursework. Pursuing a financial accounting concentration gives students the opportunity to specialize in the field without spending more time in college.
- Stand Out Against Job Competition: Specializing in financial accounting may benefit graduates in finding work. Job candidates with a major in business or accounting and a financial accounting concentration may stand out in the job search and have a leg up against their competition, depending on the particular job opening.
- Upward Mobility: The skills learned in a financial accounting concentration position students for greater upward mobility in their career paths. Businesses always need managers with specialized knowledge and understanding of financial statements and financial reporting.
- Pathway to Future Education: Pursuing a concentration offers a great pathway for students to achieve higher levels of education. For instance, learners who excel in specialized financial accounting courses at the undergraduate level may decide to pursue a master's degree in accountancy later on.
When Is a Financial Accounting Concentration Better Than a General Accounting Degree?
Financial accounting coursework sets up students for success in careers as financial analysts and financial accountants. Individuals who aim to pursue one of these careers often benefit from a concentration in financial accounting.
Students who pursue a financial accounting concentration learn how to evaluate financial data and economic trends to help business leaders make strategic financial decisions. Job candidates who major in business with a concentration in financial accounting may enjoy a leg up against their competition when applying for finance-related jobs.
When Might a General Accounting Degree Be Better Than a Financial Accounting Concentration?
Students who would like to keep their options open when it comes to their career endeavors may earn a general accounting degree, rather than a financial accounting concentration. General accounting programs cover a variety of accounting theories and principles, including internal auditing, taxation, legal processes, and information systems. This route better suits those who prefer a variety of coursework, rather than 3-4 specific financial accounting classes.
What About Other Concentrations?
In addition to financial accounting, learners can explore a variety of other accounting-related concentrations, including public accountancy, accounting information systems, managerial accounting, government accounting, nonprofit accounting, and internal auditing. Students can also look into broader business concentrations such as finance, marking, and entrepreneurship. Learn more about accounting-related concentrations at the links below.
Explore Specific Accounting Concentrations
Courses to Expect with a Financial Accounting Concentration
Colleges and universities offer a variety of undergraduate and graduate courses in the financial accounting concentration. Concentration coursework generally includes one or two core requirements, plus one or two electives. Financial accounting concentrations at the bachelor's level typically feature four courses. Concentrations at the master's level generally include three courses. Some classes require final capstone projects.
Students in the financial accounting concentration explore financial statement analysis, managerial cost accounting, governmental accounting, and accounting systems. Some courses overlap and appear in both financial accounting concentrations and general accounting programs. The list below describes five sample classes generally found in a financial accounting concentration.
Financial accounting courses introduce students to the practical application of financial accounting principles. Students use real-world examples to prepare and evaluate financial statements. Topics include accounts receivable, financial ratios, debt, and inventory. Intro courses are typically offered at the bachelor's level.
Intermediate financial accounting courses explore the accounting principles used to prepare financial statements. Students examine the theories and practices of external financial reporting and conduct in-depth reviews of the accounting cycle. This class covers valuation, balance sheets, investments, income taxes, income measurement concepts, and disclosure issues. Intermediate courses are available at the undergraduate and graduate level.
Financial statement analysis courses teach students how to extract and interpret information from financial statements. Topics include security analyses, data interpretation, and lending and investment decisions. Students gain skills in evaluating the financial state and operating performance of companies or nonprofit organizations. This course is offered at the undergraduate and graduate levels.
Fundamentals of financial reporting courses introduce internal control, ratio analysis, income statements, balance sheets, and cash statements. Students explore the financial reporting of long-term assets, accounts receivable, and inventory. Fundamentals courses typically take place at the undergraduate level.
Auditing courses examine the principles used by public accountants to examine financial statements. Students explore statistical sampling, assurance and attestation, audit committees, and professional standards and responsibilities for CPAs. The class touches on both internal and external auditing. Auditing courses are offered at the undergraduate and graduate level.
Careers for Financial Accounting Degree Graduates
Students with a financial accounting concentration may go on to work in finance, business, investment banking, and consulting. Many pursue careers as financial planners, financial analysts, budget analysts, and finance managers. Some students sit for the CPA exam to become certified public accountants.
Financial accounting professionals enjoy high earning potential. BLS data shows that the median annual salary for financial analysts exceeds $85,000. Financial analysts in the securities and financial investments industries typically earn more than $100,000 per year. Financial managers earn even higher salaries, with a median annual pay of more than $129,000.
Managers who understand financial reporting enjoy consistently high demand, as businesses always need qualified candidates to fulfill financial accounting-related positions. You can learn more about financial accounting careers below.
Financial accountants use accounting concepts and principles to analyze financial statements and evaluate the financial health and operating performance of a business. They monitor economic trends and help business leaders forecast future financial needs. Financial accountants prepare financial statements, allowing businesses to report findings externally to potential investors and government agencies.
Financial analysts evaluate current and historical financial data and study economic and business trends. They examine financial statements to help business leaders determine their businesses' value. Financial analysts leverage their knowledge and understanding to provide guidance for businesses and individuals making investment decisions. These professionals work in public and private businesses, banks, securities firms, and insurance companies.
Budget analysts work with business leaders such as chief operations officers and financial managers to prepare budget reports and monitor institutional spending. They analyze budget proposals for accuracy and compliance with laws and regulations, estimate future financial needs, and make recommendations based on their findings. Budget analysts work with private and public institutions.
Auditors organize, prepare, and maintain financial records. They examine financial records and assess financial operations to ensure accuracy and compliance with laws and regulations. They examine organizations' funds to identify both mismanagement and areas for improvement. Internal auditors work for the companies they audit, while external auditors work outside of the organizations they audit.
Financial planners and advisors help individuals and businesses manage their finances and make smart financial decisions. They meet with clients to discuss financial goals and explain different types of financial services. Financial planners and advisors analyze financial data and monitor business and economic trends to make strategic recommendations about future spending and potential investments.
Selecting an Accounting Program with a Financial Accounting Concentration
Prospective students should consider several factors when choosing an accounting program with a financial accounting concentration. They should explore multiple programs to compare and contrast program benefits and potential setbacks.
Before choosing a financial accounting program, prospective students must ensure the school holds proper accreditation. Accreditation denotes that a school and/or program has undergone a thorough evaluation and proven its academic integrity and value. A degree from an unaccredited school carries much less credibility.
A school's reputation should influence prospective learners' decisions, as well. Some colleges and universities are well-known, established as top business schools with strong accounting programs. Beyond looking for highly reputable schools, prospective students should consider faculty and their credentials. Prestigious experts in the financial accounting field often teach at well-regarded institutions.
Prospective financial accounting students should consider whether they want to enroll in a traditional on-campus program or if they prefer the convenience and flexibility of online learning. Other considerations include school size, student-to-teacher ratio, program length, tuition cost, and financial aid options.
Frequently Asked Questions About Financial Accounting
What can I do with a financial accounting degree?
You can apply for a business- or accounting-related position, such as financial analyst or financial planner. You can sit for the CPA exam to pursue certification as a public accountant. Alternatively, you may start your own business as an entrepreneur.
How long does it take to get a financial accounting degree?
A bachelor's degree typically takes four years to complete, and a master's degree typically takes two years. If you have any transfer credits, prior training, or certifications, these credentials may shorten degree length.
Is financial accounting hard?
Financial accounting may come naturally to those with a strong sense of numbers and mathematics. The field may prove complex for others, but students who find the subject particularly difficult or challenging can turn to a variety of resources for help.
How much do financial accountants earn?
Financial accountants earn between $40,000 and $130,000, with their median annual salary standing at $71,550. Salary depends on candidates' educational background, work experience, specific responsibilities, and location.
Is financial accounting a good career?
Financial accounting professionals enjoy high earning potential and rewarding careers. They also benefit from consistent demand for business leaders with knowledge and understanding of financial accounting.
What qualifications do you need to be a financial accountant?
Financial accountants typically hold at least a bachelor's degree. Many accountants earn the CPA credential. Financial analysts do not necessarily need this designation, and may opt for chartered financial analyst certification instead.
Can you get a financial accounting degree online?
Yes. Many schools offer financial accounting degrees online and in distance learning formats. Some programs are 100% online, while others follow a hybrid format.
Professional Organizations and Resources
Professional organizations offer a variety of benefits and resources to financial accounting students and professionals. Members of professional organizations can access networking events and educational opportunities such as conferences, training seminars, and workshops. Many professional organizations offer members exclusive job boards and high-quality resources such as research and publications. Students pursuing a financial accounting concentration should seek student membership opportunities.
- American Institute of CPAs
Founded back in 1887, AICPA is the world's largest member association representing the accounting field. The organization offers educational resources, professional development opportunities, certifications, and self-study courses. Members can access career guidance, conferences, webcasts, publications, and subscriptions.
- Institute of Management Accountants
IMA is a global membership organization of financial professionals and accountants. One of the largest associations dedicated to management accounting, the organization offers accounting credentials, continuing education opportunities, and networking events. Members enjoy an active community, thought leadership articles, research, and data.
- International Financial Reporting Standards Foundation
The IFRS Foundation, a nonprofit organization, develops a high-quality set of global accounting standards and principles. Set by the International Accounting Standards Board, IFRS Standards are widely accepted around the world. The IFRS Foundation holds meetings, hosts events, and offers a variety of helpful resources for accountants and academics.
- Financial Accounting Standards Board
The FASB, an independent nonprofit organization, establishes financial accounting and reporting standards for companies and organizations following generally accepted accounting principles. The FASB provides access to news, a reference library, videos, podcasts, and presentations.
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