CA and CFA salary in India per month go as 40,000 to 50,000. The government of India recognizes the CA course. CFA is the course that has global recognition. CA pass percentage stands at 8 percent, yet the CFA pass percentage goes at 50 percent. From the demand and supply ratio, the CA candidate’s demand is higher in India than that of CFA. CA candidates have the authority to audit the accounts of the company. But, the knowledge of CFA candidates is to analyze finance and investments.
In this modern era, where all are equally qualified, the difference lies in the additional certification and additional knowledge. Chartered accountants are good at taxation, audit, and finance. Global banks, trading companies, and financial services want financial analysis knowledge to handle challenging roles. CA professionals also prefer to do CFA as it is a global-level certification to know financial modeling. The financial analyst profession is suitable for CAs, CFAs, CIMA, and MBAs. Let me get some insight into the financial analyst profession.
Types of financial analysis
The financial analysis is over material, operations, time, and entity. Financial statements and financial ratios evaluate the profitability and liquidity of the company.
Objectives of financial analysis
The following is presented as food for thought to shed light on the purpose of conducting financial analysis. The different perspectives are listed below.
- Top management wants to use the financial analysis techniques to know the efficiency of the resources, the success of the business operations, evaluate the prospects, and implement internal control.
- Lenders or bankers want to do the financial analysis to check the profitability over some time, the capacity to repay the loan and interest, available sources of funds, risk and rate of return, and the credit risk associated with the loan, interest, and maturity date.
- Investors analyze the financial statements to understand the future growth and prediction of bankruptcy.
- Creditors analyze the financial statements to evaluate the ability to pay debts and meet short term claims.
- The auditor audits the financial statements to underpin the degree of confidence with the company. In some cases, the audit has different insights. The reason behind the auditing is likewise to assist the investors in quantifying the shares to buy. It also helps the management of the company to actualize quality in accounting practices. The audit of a larger company tends to attract more market participants.
Business analytics for chartered accountants
After getting a Chartered accountant certificate, the role of a chartered accountant is evolving in recent days. Auditing is not only for inspection but also for the recommendation. He has to understand the other areas of the business as operations, marketing, human resource management, supply chain management, and economics.
As technology is bringing the internal data and external data related to the business with ease, the role of accountants become more laborious. He finds out the answer to reasonable questions like what happened in the past? (Descriptive analytics), what is the future of the business objectives? (predictive analytics), and which business solution is suitable for the respective business model? (Prescriptive analytics).
Digital transactions and digital marketing are increasing data functionality. In such a situation, business analytics is the solution to business challenges. Chartered accountants learn from mistakes of the business functions and educate the company officials to handle the business challenges.
According to The Institute of Chartered Accountants in England and Wales (ICAEW), data-driven audits bring culture change in the organizations. Auditors check the ledgers with the sampling method. Big data train the auditors to relate the mistakes with outliers that are derived from an automated program. When checking the ratios, accountants can check the competition as well.
Auditors audit the data with the risk that arises from the external factors like the regulatory changes, mergers, and supply-chain risks. These external factors help the auditors to improve the performance and reduce the risks associated. The cloud technology brings the data with real-time support. With the back-up of technology, auditing is processed with periodical checks and periodical advice. Accountants communicate with the company employees regarding financial performance with regular insights and bring changes in the performance of the company.
As technology is creating new job roles, it plunges the Chartered accountants with many opportunities. Big data and cloud courses are the most desired Software courses for chartered accountants. These technologies are helpful to get insight into the financial performance with precise data. As of now, auditing with big data is in its infancy stage. Chartered accountants need to shift their mindset from reactive numbers to proactive numbers.