If you love numbers, enjoy analysis, and are looking for a great career that encompasses both, you may be wondering what path to take: actuary or accounting? Both are fantastic options, with some important differences to consider. Here, we lay it all out for you and discuss the differences between actuary vs accountant when it comes to job outlook, salary, educational requirements, and more.
Both actuaries and accountants make calculations, analyze data, report on finances and conduct research and statistical analysis.
However, they do differ in some important ways. Actuaries analyze data and calculate risks, whereas accountants do more general financial work for companies.
They are experts in business, mathematics, statistics, and economics theories. They can generate financial roadmaps for companies with regards to unforeseen circumstances, creating insurances and protections.
Statistics are at the core of the job of an actuary, so actuaries must be data analytics experts. They must be able to turn dense datasets into tangible action plans for companies and individuals, and translate that information into commonly understood language.
Accountants are a more common profession. These financial experts may conduct payroll, manage investments and expenses, and account for internal finances such as transaction data.
Accountants are generally responsible for keeping track of the finances of a firm, making sure they are accurate, and submitting annual records.
While both actuaries and accountants work in finance, there are some notable differences between the two when it comes to salary, educational requirements, certifications, work environment, and career scope.
For example, actuaries, on average, make much more money than accountants. However, the certification process can take time — so many actuaries spend part of their career working in lesser paying jobs before working as an actuary.
Accountants on the other hand, can begin work as an accountant right after getting an education.
Actuary Vs Accountant
What does an actuary do?
An actuary uses data from the past to make predictions about the probability of uncertain future events occurring and assesses the potential financial costs associated with those events. Most actuaries analyze risks in the insurance industry and help insurance companies determine what coverage levels to offer in their policies and what premiums to charge for each coverage level. Some actuaries work for corporate businesses or investment banks to analyze and manage the companys financial risks. Specific responsibilities may vary based on the company the actuary works for and their level of experience, but typically include:
What does an accountant do?
An accountant compiles, reviews and compares financial records and data of individuals, businesses and governments to ensure they are making sound financial decisions and running as efficiently as possible. They may work alongside other accountants or with other financial professionals within a companys finance and accounting departments. Specific responsibilities may vary based on the size, industry and needs of the company the accountant works for and their level of experience, but typically include:
Similarities and differences between an accountant and an actuary
Accountants and actuaries have specialized roles that require specific skill sets and educational backgrounds. The following sections discuss the similarities and differences:
Accountant: The minimum education requirement to become an accountant is a bachelors degree. Most accountants major in accounting or business. To pursue certification in the accounting field, an accountants degree must include a specific number of credit hours in accounting, auditing, taxation and business courses. Some employers prefer candidates who have a masters degree or a CPA designation.
Actuary: The minimum education requirement to become an actuary is also a bachelors degree. Most actuaries major in actuarial science, mathematics, statistics, calculus or computer science. To pursue certification in the actuarial field, an actuarys degree must include a specific number of credit hours in economics, applied statistics and corporate finance. Some actuaries choose to earn a masters degree in actuarial science or another relevant field to help further advance their careers and increase their earning potential.
Training and experience
Accountant: Most accountants begin their training within the field during an internship program while working on their degree. Upon graduation, most accountants obtain entry-level positions in accounting firms while they work toward certification. They also usually receive additional on-the-job training as part of their on-boarding process when they begin a new role. This on-the-job training usually covers specifics the accountant needs to know about the company and their role and can last for a period of a few days up to a few months.
Actuary: Some actuary students participate in internship programs while working on their degree, but many actuaries dont begin their training until after graduation. Training for an actuary usually begins in an entry-level trainee position at an insurance company under the leadership of a mentor while the trainee works toward obtaining their certification. During their time in the trainee role, their primary responsibility usually involves conducting research and gathering data for their mentor. They may also help in the underwriting, product development and marketing departments to gain a comprehensive understanding of what their business does.
Both accountants and actuaries typically work in full-time positions within an office environment during standard business hours. The work of both accountants and actuaries typically involves spending several hours sitting at a desk and working on a computer.
Accountant: Accountants may have to work weekends, evenings and overtime depending on the time of year and the needs of their business. Most accountants work in accounting firms or the accounting or finance department of corporate businesses.
Actuary: Actuaries may also have to work long hours or overtime depending on the needs of their business. Most actuaries work for insurance companies, but some use their skills on a broader scale doing enterprise risk management for corporate businesses or investment banks outside the insurance industry.
Certifications and licenses
Accountant: The accounting field does not require certification, but most employers prefer candidates who have a CPA designation. The American Institute of Certified Public Accountants grants the certified public accountant (CPA) designation to candidates who have:
Actuary: Moving from an actuary trainee position into a full-time actuary role requires certification. This certification process is much more rigorous than the certification process of an accountant and takes several years to complete. Certification levels include associateship and fellowship. Actuary certification is available from either the Casualty Actuarial Society (CAS) or the Society of Actuaries (SOA). CAS handles certification for actuaries who want to work in property and casualty, medical malpractice or workers compensation. SOA handles certification for actuaries who want to work in life insurance, health insurance, investments and finance. The certification process includes:
It typically takes candidates between four and six years to complete associate certifications and up to 10 years to complete fellowship certification. Some employers pay for their actuary trainees certification exams and study materials, and trainees often earn a bonus or a raise after each certification exam that they pass.
Is it better to become an accountant or an actuary?
Individuals who have a passion for math and numbers can find a career as either an accountant or an actuary to be very rewarding but choosing between the two career paths requires careful consideration of career insights for each field and balancing the career requirements of each field with your personal preferences.
The following data and projections from the U.S. Bureau of Labor Statistics suggest both accountants and actuaries will be in demand between the years 2018 and 2028:
As this data shows, the projected job growth rate for actuaries is much higher than the projected growth rate for accountants, despite the projected job openings for accountants being significantly higher. This is because the education, training and certification process of becoming an actuary is much more rigorous and takes a lot more time than becoming an accountant, and as a result, there are far fewer actuaries than there are accountants.
Balancing career requirements and personal preferences
Because both careers offer strong job stability and higher than average salaries, choosing between the two career paths largely relies on your personal preferences. If you prefer to work with known numbers and past events or want a career that requires less time to maximize your potential, a career as an accountant may be better for you. If you prefer to work with statistical theory and probability to predict future events and their associated financial risks or want a higher earning potential despite it taking longer to maximize that potential, a career as an actuary may be better for you.
Is actuary harder than accounting?
Do accountants make more than actuaries?
While both actuaries and accountants work in finance, there are some notable differences between the two when it comes to salary, educational requirements, certifications, work environment, and career scope. For example, actuaries, on average, make much more money than accountants.
Can accountants become actuaries?
Is actuary better than CA?