Dr. Antony Michail
Nov 6, 2018

Academic Qualifications vs. Professional Qualifications: What is the Difference?

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Since the late parts of the 20th century executives round the world and students have been making a shift towards professional qualifications (PQs), such as the Chartered Financial Analyst (CFA), the Association of Chartered Certified Accountants (ACCA), the Certified Internal Auditor (CIA), the Certified Public Accountant (CPA), the Project Management Professional (PMP), the Chartered Institute of Management Accountants (CIMA) and many more. 

 

There are numerous reasons justifying this 'shift': the practical knowledge offered by these programmes, their global character and their continuous renewal of their syllabus in order to respond to the needs of corporations and each profession. But what is their recognition and their competitive advantage in such a challenging and changing world? How do they differ in comparison to the traditional university studies?

 

Professional qualifications had not been particularly successful in Europe and Asia until 2000-2005 for four main reasons:

  • The option of 'professional qualification' was not available in many European, Middle Eastern and Asian countries (with few exceptions).

  • In many cases, the Educational Systems of each country granted - and is still granting in some parts of the world - professional rights only through university degrees and not necessarily through professional bodies/associations.

  • Because 'professional rights' in many countries were only awarded by the national governmental bodies themselves (notaries, chartered certified accountants etc.).

  • The national culture and its specific perceptions of studies, where focused on academic studies (university bachelors and masters degrees) 

 

Differences Between Professional Qualifications and University Degrees:

A professional qualification is a professional designation obtained in a particular field (Accounting, Audit, Investment, Management, Law, Engineering, Public Relations, Marketing, Banking, etc.). Such a qualification is awarded by internationally recognised bodies/associations (Associations or Institutes) of countries such as the United States of America, Great Britain and others, upon successful completion of studies in a specific field and approved work experience. In Great Britain for example, many renowned multinational business consulting firms (Deloitte, PwC, EY, KPMG e.t.c.) set as a prerequisite for their associates or partners either the CPA (Certified Public Accountant), ACCA (Association of Chartered Certified Accountants- UK), the ACA by the Institute of Chartered Accountants of England and Wales, or CIA (Certified Internal Auditor). In the U.S.A., high-ranking executives working for large banks or investment organisations such as American Express, Bank of America, Goldman Sachs, etc. are usually holders of the CFA (Chartered Financial Analysts, USA).

 

Nevertheless, the internationalisation of markets, the ever-changing financial environment and the rapid growth of the EU had created a new global reality for graduates and professionals searching for a job with real and substantial career perspectives. The labor markets globally and the requirements of large multinational businesses are far more demanding than they used to be in the previous decades (1980’s-1990’s). Recent (2007 – 2014) unemployment trends globally support the above argument.

 

University degrees on the other hand are awarded by university institutions throughout the world and include the widely known Higher National Diplomas, Bachelors, Masters and Doctorates of Philosophy or Business (HND, BA, BSc, MA, MSc, MBA, MPhil, PhD, DBA and others). Each university awards its own degree and it is therefore important for a student to enroll/enter a university or school having a 'good name' in their selected fields. Exams are held by the universities and degrees are also awarded by them, whereas previous work experience is not a prerequisite.

 

Summarizing the differences:

 

University degrees    Differences   Professional Qualification

Held by the university                Exams                        Worldwide

Decided by the university          Exams topics               Equally worldwide

Not necessary                           Work experience          Necessary

By university institution             Qualification                By professional association

 

As stated previously, during the '60's and the '70's a university degree was enough to guarantee a stable job and a career. Today, the reality is very different. The labor market of the 21st century has become extremely demanding. The large and multinational businesses of today have vastly different needs. They are looking for professionals with (a) practical training after their graduate studies that must be certified by internationally recognized professional associations and (b) approved previous work experience, who are ready to undertake leading positions. The combination of worldwide exams and highly relevant work experience is exactly what has made the difference in many countries.

 

 

Requirements for Obtaining a Professional Title / Certification

In order to obtain a professional qualification the following are usually required: a) successful completion of the worldwide exams (held in hundreds of countries world-wide and in many cases through on-line testing) undertaken by the respective professional associations or on-line testing organizations and (b) two to three years of previous work experience (depending on the qualification) in a relevant field. Qualifications are directly awarded by the professional associations and are internationally recognized in most cases. Exams are independent and are evaluated in the country of origin of the respective association.

 

When someone holds a professional designation, then previous work experience and success in worldwide exams are “given”. A chartered (or 'certified') accountant for example in Prague, is considered to be a 'stronger' candidate for multinationals and consulting firms than the holder of a s Master's degree in accounting. Their previous work experience is given, as well as the curriculum of the respective training institute.

 

The reason why the ACCA has prevailed internationally (people can take the exams in over 170 countries) is because its curriculum, as of 1997, has been based on the internationally predominant International Accounting and Auditing Standards (a requirement for listed companies in many countries globally). Small and medium enterprises are expected to follow gradually according to the EU, although the financial crisis might delay these plans for a few years.

 

Holders of a qualification such as the ACCA, ACA or CIMA for example are certified as to the following: successful completion of worldwide exams, relevant work experience, familiarisation with the International Accounting and Auditing Standards and very good command of the English language. 

 

Global Recognition

Professional qualifications such as the CFA, ACCA, CIMA or CIA have worldwide recognition. Large multinational business consulting firms currently employee the majority of students and opting for such qualifications but they also cover the cost of the forenamed programmes (with very few exceptions).

 

In addition to this, all the British Professional Chambers / Bodies are recognised within the EU as well as other regions around the world. It is also worth noting that the ACCA qualification, which is awarded by a European Union Member State (Great Britain) is also recognised by the «Mutual Recognition Directive» (89/48/EEC) of the European Union that came into force in 1991.

 

CFA has been recognised by Capital Market Commissions in  a number of countries and in many cases its holders are exempt from taking the relevant exams held in these countries.

The CIA is recognised by local Institutes of Internal Auditors, which are usually responsible for holding the official CIA exams in each country. With the continued expansion of International Standards (in Auditing, Accounting, Finance), one can only assume that such qualifications will grow further. 

 

Local Recognition - Joint Examination Schemes (JES)

In many countries associations partner with local bodies in order to offer localize certain parts of their qualifications. As the ACCA site states: ACCA has a number of partnerships with national accountancy bodies around the world which enables you to sit the exam component of a range of ACCA qualifications and also satisfies the exam criteria for the national accountancy body qualification. We call these joint exam schemes (JES). 

 

If you wish to study for the ACCA Qualification and live in one of the following countries you will need to register under the JES: Barbados, Belize, Botswana, Cambodia, Cyprus, Greece, Guyana, Jamaica, Lesotho, Malawi, Malta, Sierra Leone, Swaziland, Trinidad and Tobago or Vietnam.

http://www.accaglobal.com/gb/en/qualifications/apply-now/jes.html

 

Exemptions

Many professional qualifications such as ACCA, CIMA, ACA and others offer exemptions to some of their papers (courses) based on previous academic degrees (such as a Masters degree, A bachelors etc. in an equivalent field of study. You need to check with the association directly and exemptions are only officially awarded by the association itself.

An initial assessment can be made through an enquiry to the association or institute via email and/or through a search engine on the association’s website. Furthermore, you can contact StudySmart (info@StudySmart.gr) for an unofficial assessment.

 

Level of Difficulty in Completing a Professional Qualification

When it comes to the difficulty of these programmes, it is worth mentioning that the worldwide exams success rate is (on average) below 50% for many professional qualifications such as ACCA, ACA, SHRM, CIA, CFA.

 

Success rates in countries where professional training is offered are higher because training is provided by specialised lecturers. As to the ACCA 'parts', the CIA, modules' and the CFA 'levels' (see the analyses of the programmes below), one could argue that their difficulty is justified by the following:

  1. They are very practical. Many students have not dealt with many topics in practice. They had rather approached them only in theory in the framework of the university degree

  2. Many candidates that opt for such qualifications have not yet worked in the industry. A candidate can of course register before completing a University degree, or start before holding any formal title but best practice suggests that it is a good idea to combine work with studying.

  3. Training is in a foreign language (for most countries - English) with new terminology that the students have not come across (e.g. due to the International Accounting Standards/Internal Financial Reporting Standards). In the case of CFA and CIA, the multiple-choice questions require quick analysis of each question and its choices (a few minutes are usually available). Some countries with large populations have justified discussion towards the creation of qualifications being offered in an alternative language (i.e. Russian and Arabic).

  4. Each 'part' or 'module' or 'level' (depending on the programme) equals to the syllabus of approximately two-four university subjects. Some parts require 80-90 hours in order to cover the syllabus, whereas others require 60 hours.

  5. In some professional qualification programmes students do NOT know their evaluators not even by name. In some cases (such as the CFA) they do not even know the pass-rate required.

  6. Worldwide exams are the only evaluation method (many professional programmes do not include the writing of papers). Therefore there is no average mark in the programmes as would be the case with a university degree etc. Those who fail the exam must take it again.

  7. High (or even unknown) pass rates. In the case of ACCA (British system) the threshold is 50% (see the glossary for differences in rating), in the case of CIA it is 75% and in the case of CFA the threshold is not disclosed, since it is determined on the basis of the worldwide average.

  8. CPD requirement: Most qualifications require Continuing Professional Development credits also called CPUs (Continuing Professional Units) in order to ensure the value of the qualification, raise the standard of the title and update the title – holder’s knowledge and competencies. 

In summary, professional qualifications have the following advantages:

• Worldwide recognition

• Harmonisation to international standards

• Distinguishes candidates in the labour market

• Practical use

• High-level specialisation

• Continuous updating/commitment

 

The question of previous work experience in professional qualification:

In order to obtain the qualification, one must have already worked for the time period set by the institution (usually two-three years, depending on the qualification). In all qualification programmes, work experience can be obtained either before, after or during the programme and it is not necessary to be obtained in a particular sector, as long as it is relevant.

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Other massive companies that no longer require candidates to have a four-year degree include Google, Apple, Starbucks, and IBM. (ICEF Monitor, 2019) McKinsey (2014): Less than half of employers are satisfied by their workforce’s skill levels; (Survey involving over 5000 youth and 2500 employers) Pew Research center (2016): Only 16% of Americans think that a 4 year degree course prepares students very well for a high paying job in the modern economy…Roughly a third of adults (35%) say it should be to help individuals grow personally and intellectually, while 50% say it should be to teach job-related skills. Craig, UVF, (2016 & 2018): There is a rise in “intermediaries” that serve as a booster for employability and fills the gap between Universities and the workplace. These organizations are being funded by large corporations. – There is a rise of the “anti-credential” (college degree) while enrollment declines continue and employers are becoming more and more open to non-degree holders (A New U, 2018) 4. How are Corporations confronting the problem? To solve the above problem, corporations have already taken on the role of educating their new joiners and recent graduates through the development of their own academies and corporate universities (in many cases). In essence, corporations are becoming more involved in taking on the responsibility of grooming and educating graduates so as to fill in the void left by the university in hard and soft areas. This is one reason why money is spent in delivering professional qualifications such as the ACCA (Association of Chartered Certified Accountants), CIMA (Chartered Institute of Management Accountants) or others (in the consulting world) or technical qualifications created by the organizations themselves (i.e. SAP, Oracle, Microsoft, CISCO, Ericsson, GE and many others). Therefore, the corporations are actively involved in training their own employees but also the market at large utilizing experts from within the organization AND from the market at large. These corporations are also working with professional associations to match global association benchmarks and focus on their competency frameworks which include soft and hard skills. Training is delivered by people who actually practice what they ‘peach’. Individuals who are actively consulting businesses or work for businesses in the respective position of the area they are training in. Therefore, you have entrepreneurs delivering entrepreneurship and talking about ‘real” problems entrepreneurs have; how and why they lost and made money; Active marketers delivering courses on how to prepare a marketing plan in the digital age and how to create content and how to use social media effectively; Project Managers that actively plan, control an deliver projects; Accountants that actually prepare integrated reports with environmental and social KPI’s and have to meet strict deadlines for reporting and working with auditors that require compliance and regulatory benchmarks; Innovators who have ‘innovated’ and People Managers that deal with talent on a daily basis. HR managers that deal with issues of engagement, attrition, building skills and other extremely important areas of the business. The question therefore that arises is: Wouldn’t you want to be taught by someone who is actually DOING what they are talking about? 5. Case Study: PwC’s Award Winning Mini MBA One of the best examples of a successful corporate programme that answers a number of the issues raised and that has really been beneficial for PwC and its clients is PwC’s Mini MBA. Being offered in over a dozen countries globally at this point to the market at large (2019), it is practical, delivered by active professionals, based on a constantly updated curriculum and uses a unique flowchart methodology. The programme’s flowchart provides a ‘holistic’ approach for business acumen. It helps with business planning and helps candidates on their thinking process as they can always refer to it and see the relevant areas while understanding their role in their organization. Imagine a google map of an area where you can see all the streets and landmarks where you can zoom in and out of. Above all, it provides a one page picture of what goes on in a business and assists in grouping business models that could be useful when evaluating certain areas. Furthermore, it attempts to tackle and link the soft skills issues raised in this article in a practical way through activities, networking, presenting and actually ‘doing’ instead of understanding the theory. The recent (May 2019) PwC Mini MBA Silver Boussias Award in Greece reinforces the points raised. What’s next? Maybe a global corporate Academy ranking? Or maybe University – Corporation Partnerships for the development of jointly delivered programmes? -------------------- References: Budnick, P. (2013) Professional Certification: Why It’s Important, Why You Should Embrace It ( www.ergoweb.com , May 8th, 2013) Craig, R. (2016). Managing the Skills Gap - Change, Providing students with pathways to high value careers, Oct. 2016 edition, USA, Routledge. Craig, R. (2018) A New U – Faster and Cheaper Alternatives to College, USA Economist, Mar. 26th, 2015, special report, Duncan, E. Universities - Excellence v Equity Economist, Jan. 14th 2017, special report, LifeLong education, Learning & Earning, Glazer, S., Kozusznik, M., Shargo, I. (2102). Global Virtual Teams: A Cure for – or a Cause of – Stress, in Pamela L. Perrewé, Jonathon R.B. Halbesleben, Christopher C. Rosen (ed.) The Role of the Economic Crisis on Occupational Stress and Well Being (Research in Occupational Stress and Well-being, Volume 10) Emerald Group Publishing Limited, pp.213 - 266 Harvard Business Review (2015). Beyond Automation – Strategies for remaining gainfully employed in an era of very smart machines, Davenport Thomas and Kirby Julia (June 2015), USA Harvard Business Review. (2011). “The age of hyper-specialization”. Malone, Tom, Laubacher, Robert (August, 2011), USA Harvard Business Review. (2016a). “The performance management revolution”. Capelli, P. and Tavis, A., (October, 2016), USA Harvard Business Review. (2016b). “Is technology really helping us get more done?”. Mankins, M. (February, 2016). ICEF Monitor (2019) “The growing importance of non degree credentials” (source: monitor.icef.com,retrieved July 4, 2019). Independent, August 3, 2015 – Richard Garner article “Firm says it will no longer consider degrees or A-level results when assessing emoployees, retrieved July 2, 2019 Kiritsis, C (2018) Staying Employable – Certifications of Competencies in the era of real-time career management – From Degreefication to Certification. Handbook of research on Educational Design and Cloud Computing in Modern Classroom settings. USA, IGI Malone, T., Laubacher, R. Johns, T (2011), The Big Idea: T h e Age of Hyper-Specialization, Harvard Business Review, 89 (7/8) : 56-65, July/August 2011. McKinsey report (2014), Mourshed M., Patel J., Suder K., “Education to employment: Getting Europe’s youth into work”, January, USA Mcmurtrey, M. (2013) The impact of academic inflation on the labour market: if everyone has a PhD, who will be the custodian? International Journal of Electronic Finance, January 2013, USA Pew Research Center (2016), - How the shifting economic landscape is reshaping work and society and affecting the way people think about the skills and training they need to get ahead, October 16’ Bureau of labor statistics. (2015). – Number of jobs held, labor market activity and earnings growth survey , March 31, 2015, USA.

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