Advice Needed - Will earning the CPA make me a better investor?

[spartan]

Is the CPA a valuable designation re: investing? Buffett always talks about the importance of accounting, but is earning the CPA necessary? Can't I learn as I go along by reading regulatory filings?

 

My thinking is that if there are particular aspects of a financial statement that I don't understand, I can always look up the rules (i.e. CPA handbook, etc.). I have 3 years of experience in Big 4 audit, which has built a strong foundation of accounting knowledge. My original intent for joining Big 4 was to learn accounting, but earning the CPA will likely take me another 2 years.

 

I'm not concerned about the time/effort required, but if I'm going to embark on an arduous journey and take time away from finding bargains, I want to know that there's light at the end of the tunnel. Any thoughts/opinions are welcome.

 

How has everyone else on this forum learned accounting over the years?

[SharperDingaan]

You were hired by a Big-4 audit firm because you are pursing a CPA - is that off the table now?

What is the career plan?

 

SD

 

[spartan]

I was hired to work on compilation and review engagements. I did a good job and wanted more of a challenge, so they moved me into audit.

[LC]

Do you want to pursue a career in audit/accounting?

[spartan]

Do you want to pursue a career in audit/accounting?

 

Definitely not. I want to work in investment management, primarily because I enjoy the challenge of fundamental analysis.

[LC]

In that case, a CPA is probably not ideal at least in my opinion. Accounting rules can be learned independently as you mention.

[aws]

I'm a CPA and I certainly do not think the designation did anything for me as an investor, so I would not be pursuing it if that is your only goal.  The tests cover topics that a mile wide and an inch deep, so the few that are applicable to investing could be learned by pretty much anyone independently. 

 

Since I worked in public accounting for many years it was still worthwhile professionally though.  I was always a good test taker so I had no worries about failing, and the studying process took probably 300 hours total. 

[Guest cherzeca]

wouldn't you be thinking about a CFA if you want to add a credential and want to work in investment management?

[SharperDingaan]

What is optimal depends on your career plan.

 

Whether you choose the accounting or investment route, when you start – you need to be in a Big-4, no older than 22-24, an undergrad from a top school, the right skin tone, have ‘connections’, and there to obtain the experience component of a designation. Same process whether the designation is a CPA or a CFA. Widespread abuse, par-for-the-course.

 

Don’t meet the criteria? you will always be 2nd fiddle to those who do. Sure, you might be smarter – but if you’re too old, not the ‘right’ school, wrong colour, or no connections ….  you will be 2nd fiddle for life. If this is you, play a different game.

 

A great many CPA’s and CFA’s are also MBA’s - particularly if the plan is to become senior management at some point; a fairly high % hold all 3 designations. And almost all of them will tell you than once you grow up - you build and run companies, not trade bits of paper.

 

Back to the plan, and is there one?

Then what have you done today - to make the plan happen?

 

SD

 

 

[bizaro86]

 

Back to the plan, and is there one?

Then what have you done today - to make the plan happen?

 

 

SD - I think this might be the best comment I've seen on here in quite some time.

[Hielko]

Is the CPA a valuable designation re: investing? Buffett always talks about the importance of accounting, but is earning the CPA necessary? Can't I learn as I go along by reading regulatory filings?

 

My thinking is that if there are particular aspects of a financial statement that I don't understand, I can always look up the rules (i.e. CPA handbook, etc.). I have 3 years of experience in Big 4 audit, which has built a strong foundation of accounting knowledge. My original intent for joining Big 4 was to learn accounting, but earning the CPA will likely take me another 2 years.

 

I'm not concerned about the time/effort required, but if I'm going to embark on an arduous journey and take time away from finding bargains, I want to know that there's light at the end of the tunnel. Any thoughts/opinions are welcome.

 

How has everyone else on this forum learned accounting over the years?

I would guess that you probably already know more about accounting than you need for investing.

[K2SO]

It's not necessary, and won't necessarily make you a better investor, but it could.

 

You'll have a better understanding of how financial statements work, and be able to catch inconsistencies and call out management BS (there is a lot, even with large cap widely followed stocks).

 

Independent thought is the most important aspect to being a good investor, and the better your technical skills, the more valuable your insights will be.