It’s easy to assume that accounting, finance and economics are very similar, and it might be confusing when thinking about which pathway to study.
While they aren't worlds apart, there are some crucial differences between all three disciplines that could be the deciding factor in which area you choose to study. Here’s a quick guide to each subject and what these terms actually mean.
The basics
We need to think of accounting and finance as siblings in the same family. While they might get bundled together and are often confused with one another, each is a separate and equally important part of running a business.
To put it very simply; accounting is about money that has been spent, and finance is about money that will be spent.
Accounting focuses on the day-to-day flow of money; it records and reports on what has already happened and whether it has happened in line with laws, regulations and business standards.
Finance looks at money that will be spent, asking questions such as how, on what, when and why? Finance looks after assets and plans how these assets are distributed.
So, what about Economics? In some ways, it combines aspects of both accounting and finance, and applies them to the wider society.
Why should I study accounting?
If you study accounting, you’ll explore how businesses spend their money and the laws and processes that come with that. You’ll be studying how to analyse financial reports, the ethics behind accounting practices and business strategy, gaining skills in accounting regulation, forensic accounting and an overall understanding of the business industry.
Some of the topics you could be studying include:
- Business Foundations
- Financial Reporting
- Management Accounting
- Forensic Accounting
- Risk Management
- Taxation
- Microeconomics
- Auditing and Assurance
Careers that an accounting course could take you into include Chartered Accountant, Tax Manager, Valuation Analyst, Investment Advisor, Treasurer, Auditor or Budget Analyst. You could end up working for a wide range of businesses, from Fortune 500 companies to non-profit and arts organisations.
Why should I study finance?
Studying finance will mean you’ll have a broader scope of your studies, looking at global financial markets, business strategies and how to forecast the future performance of a business. You’ll gain knowledge of investments, stock markets and financial analytics, all of which will be grounded by a strong foundation in financial theory.
Some of the topics you could be studying include:
- Financial Analytics
- Principles of Economics
- Corporate Finance
- Private Equity
- Venture Capital
- Banking and Financial Institutions
- Ethics, Corporate Government and Law
- Investment and Portfolio Management
The pathways open to you through studying finance are much broader, ranging from Taxation Consultant, Investment Analyst or Finance Technician to Commercial Banker, Hedge Fund Manager or even Entrepreneur.
Why should I study economics?
As we mentioned, the differences between economics and the other two subjects are slightly easier to define. First, economics takes into account more than just money - it also considers such things as labour, goods and services. It is also less about businesses and more about societies; be they local, national or international. It is the theoretical study of how to get the most out of the resources available.
Some of the topics you could be studying include:
- Business Foundations
- Principles of Economics
- Business Analysis, Methods and Techniques
- Microeconomics and Macroeconomics
- Political Economy
- Forecasting
Career paths open to those studying Economics include Economist, Investment Analyst, Risk Analyst and Statistician.
What if I can’t decide?
You may be looking at all this thinking ‘I want to do all of that, why do I have to choose just one?’, and the answer is: you don’t!
At BCU, we offer a BSc (Hons) Accounting and Finance course, providing you with practical knowledge, theory and accreditations in both fields. This means you’ll not only gain all the skills required to be an accountant but also set yourself up with a theoretical understanding of the financial world, broadening your horizons for when you graduate.
Additionally, if you want to specialise in a particular subject area, we have a wide range of courses available in both accounting and finance; from BSc (Hons) Finance and Investment to the industry standard Association of Chartered Certified Accountants (ACCA) course.