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Difference Between Actuary and Accountant

There are thousands of careers. And while it is simple to select the preferred career path for some people, it is not the case for other people. For instance, a person who wants to explore a career path in maths can be torn between becoming an accountant or an actuary. Both accountant and actuary careers are viable for people who want to use their math skills every day. That being said, they differ in various ways, as discussed below. 

What is Actuary?

An actuary is a person who is tasked with predicting the financial impact of an unexpected event on a business. To calculate the probability of the events occurring and the effects it will have on various sectors of the entity, actuaries use pieces of data. This also helps in determining the financial impact of the said events, how much loss may be incurred and the expected impact. This helps companies undertake financial planning since they can set aside money to help them recoup if the said event occurred. 

For instance, an actuary can calculate the total loss that may be incurred if a vehicle was involved in an accident. While predictions used by actuaries can differ, they can still both be feasible since different judgements may be applied. 

Actuaries work with complex databases. As such, they must be comfortable with mathematical operations, statistics and databases. The types of actuaries include property, insurance, pension and retirement, casualty insurance and business risk actuaries. This career requires a bachelor’s degree program and additional certifications.  

Who is an Accountant?

An accountant is a person who is tasked with reporting the financial status of a business based on events that have already occurred. Accountants are also involved with the daily running of a firm such as receiving payments and making payments. Once this data is collected, financial reports such as balance sheets and income statements are prepared. These reports give a breakdown of exactly how much was earned and spent during the year as well as the profit made or loss incurred. 

Accounts work in different industries. Basically, any business requires the services of an accountant. Accounting qualifications differ based on the job title. For instance, most accounting jobs require employees to be a Certified Public Accountant and have a bachelor’s degree. This includes those who handle tax issues or audits. 

Similarities between Actuary and Accountant

  • Both work hand in hand in ensuring that businesses remain afloat

Differences between Actuary and Accountant

Definition

An actuary is a person who is tasked with predicting the financial of instances in companies that may or may not occur in the future. On the other hand, an accountant refers to a person who is tasked with reporting the financial status of a business based on events that have already occurred.

Roles

An actuary is tasked with analyzing financial data, developing research data and creating financial solutions based on the prevalent risks. On the other hand, an accountant is tasked with ensuring the company’s operations run smoothly by receiving and paying funds, issuing invoiced, auditing and preparing profit and loss statements. 

Education

To become an actuary, a bachelor’s degree in actuarial science, math or statistics is often needed, followed by professional examinations. On the other hand, an accountant needs a bachelor’s degree in business or accounting followed by professional examinations (Certified Public Accountant) which are mandatory for one to become a chartered public accountant. 

Common fields

While actuaries are common in investment banks and insurance firms, accountants are common in any kind of organization or business.

Actuary vs. Accountant: Comparison Table

Summary of Actuary vs. Accountant

An actuary is a person who is tasked with predicting the financial impact of an unexpected event on a business. On the other hand, an accountant refers to a person who is tasked with reporting the financial status of a business based on events that have already occurred. While they may have differences, both work hand in hand in ensuring that businesses remain afloat. 

FAQs

Are actuaries like accountants?

While they may have some similarities, they differ. For instance, an actuary is tasked with analysing financial data, developing research data and creating financial solutions based on the prevalent risks. On the other hand, an accountant is tasked with ensuring the company’s operations run smoothly by receiving and paying funds, issuing invoiced, auditing and preparing profit and loss statements.

Can an accountant be an actuary?

Yes. An accountant can become an actuary if they undertake the actuary courses. 

Are actuarial exams harder than accounting?

Yes. Actuary exams are harder than accounting exams. 

Which is better CA or actuary?

This depends on a person’s numerical skills. A person who has high numerical skills is better versed with actuary while one with low numerical skills is better off with CA. 

Who Earns More actuary or accountant?

Both actuaries and accountants earn well. However, actuaries earn better with a medium average salary of $102,880 while that of accountants is $75,000 per year. 

Do accountants or actuaries make more money?

Both careers are well paying. This depends on the industry and level of experience. 


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References :


[0]Institute of Actuaries. Journal of the Institute of Actuaries, Volume 5. Alden Press, 1855. https://books.google.co.ke/books?id=365EAQAAIAAJ&pg=PA188&dq=Difference+between+actuary+and+accountant&hl=en&sa=X&ved=2ahUKEwj299Kj5sf0AhWK5OAKHTIWB_wQ6AF6BAgGEAI#v=onepage&q=Difference%20between%20actuary%20and%20accountant&f=false

[1]Whittington O & Carmichael D. Accountant's Handbook 2008, Volume 3. John Wiley & Sons, 2008. https://books.google.co.ke/books?id=yDqDd5WQYJcC&pg=PA87&dq=Difference+between+actuary+and+accountant&hl=en&sa=X&ved=2ahUKEwjCsIyx5sf0AhVz9OAKHWQVBrI4ChDoAXoECAoQAg#v=onepage&q=Difference%20between%20actuary%20and%20accountant&f=false

[2]S. David Promislow. Fundamentals of Actuarial Mathematics. John Wiley & Sons, 2011. https://books.google.co.ke/books?id=m3D74czXOXMC&printsec=frontcover&dq=Difference+between+actuary&hl=en&sa=X&ved=2ahUKEwjpp7u25sf0AhUZAWMBHakmCPwQ6AF6BAgDEAI#v=onepage&q=Difference%20between%20actuary&f=false

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