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.
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.
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:
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
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.
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).
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.
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.
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.
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.
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.