Accountant vs actuary

From: Pete Schult

--Pete Schult

Accountants and actuaries both work with pension plans but the trend is to discontinue pensions and just have 401k's or "defined contribution" type plans so I'm not sure of the employment outlook for that type of actuarial work.

actuaries work with statistics and computer simulations, and must pass exams that involve solving lots of advance statistics and probability problems.

CPA accountants usually cannot solve a statistics or math problem if their life depends on it. the cpa exam involves memorizing an inane collection of esoteria accounting rules and standards.

in my experience, actuaries tend to be above average IQ people (e.g., IQ = 115-125 range), whereas CPA accountants tend to be average to below average IQ people (93-103 range IQ) with an ability to do very dull, mundane, detail-oriented work.

you can identify actuaries and accountants at parties, because both are standing in the corner (the opposite corner) staring down at their shoes and sucking on a domestic beer.

When I used to audit life insurance companies, I was told that the only difference was that an actuary was an accountant with his personality removed...

Bill

Becoming an accountant is a cake walk compared to becoming an actuary. Do a little research and look at the requirements to be an actuary.

actuaries are paid 2 to 3 times as much as accountants/auditors.

after 5 years experience, an actuary could make $200,000 while an accountant makes only $75,000.

That is because it takes a very high I.Q. to become an actuary, I would guess that you would have to be in the top 1%.

Lower I.Q. requirement, more people can pass the classes, more bodies, positions filled, mechanization reduced demand, etc....

You can ask actuaries these same questions at

that you would have to be in the top 1%.

top 1%?? your perspective is astounding, ha ha ha...

First, I-bankers, successful lawyers and doctors, successful small and large business entrepreneurs.. they all make 10X that of an actuary.

Second, compared to the artistic (e.g., music, writing) professions, and the academic and scientific professions, being an actuary is quite dull and un-creative.

So, why would a person in the top 1% of IQ choose to be an actuary and make only $150-200K, when he would make much more, or have a job that he enjoys more?

Because you're falsely assuming that if someone is in the top 1% of an IQ bell curve, that means they must be creative, interesting or even sophisticated and thus demand more out of life then a boring 9-5 desk job. I have found that the exact opposite seems to be true. The smarter the people I come in contact with, the more boring and dull they seem to be.

I just finished law school and was surrounded by extremely bright people who had absolutely no desire to do anything more then be someones bitch for the rest of their lives. With all the work and 90 hour weeks they intend to put into making $1250,000 a year, they could have become millionaires on their own. Or at least thats what I thought. But the more I spoke to them the more I realized that specific thought had never even entered their heads. They never once stopped to ask themselves just why they were putting in all this effort just to make someone besides themselves rich.

The moral of the story is, you can be very bright and very smart.....but that doesn't mean you can't be boring as sh*t.

I agree with you, there is no way I will devote 2/3rds of my life to making someone else wealthy. I'd rather die a failure who tried to be his own boss, then live on my knees.

I.Q. is only one facet of the total person. It is predictive of certain things of a specific nature and is of little use for most others.

bright people who had absolutely no desire to do anything more then be someones bitch for the rest of their lives.

Very few people in law school, even in the top schools like Stanford or Harvard, are in the top 1% IQ. Law school (professional schools generally) attract the "upper middle class" bright; people who are smarter than the random joe you meet on the subway, but not the super smart geniuses. So, the premise of your who argument is wrong!

The super geniuses (top 1%) do not bother with professional school, which is by nature anti-creative. You find the supergeniuses in phd programs, music, writing novels, creating directing movies, or starting wild internet companies. They hire law school grads to be their worker-bee slaves.

to making someone else wealthy. I'd rather die a failure who tried to be his own boss, then live on my knees.

no you won't. by nature, a joe who goes to law school is a worker-bee by personality. You can never take the risk to go and do something like start your own business. you just don't have it in you. like 99% of your law school classmates, you are a drone. bahahahahaaah!

Possibly, assuming you can actually become and get hired as a full actuary.

My brother was heading down that path, at one point.

What he discovered was that most of the full actuary positions in Canada were disappearing due to consolidation of life insurance companies. The Mutual Group acquired numerous of its competitors; when that happens, the subs no longer each need a full actuary. The _one_ at the Mutual Group is all that is necessary to sign off on things.

I doubt that things are all that different in the US...

so, all the 10s of thousands of people taking their series of actuary exams will find there is not a great paying job at the end of 7 years hard labor?? hahaha!

Things are different in the US versus Canada. Canadian universities graduate an oversupply of actuarial science majors, while this hasn't yet happened in the US. Also, the life insurance consolidation that Canada saw has not been as severe in the US.

this brings up a good point: why is majoring in accounting and actuarial science so much more popular in canada (and australia) than in the USA? In US,

business major generally prefer economics, finance, or general business. Nobody strives to be an accounting geek, except the clueless.

I've been an accountant for over 20 years and spent most of my time in public accounting but am very familiar with actuarial work. Actuarial work tends to pay better than accounting although it is also less varied than accounting work. If accountants aren't as smart as actuaries, I have to wonder why accounting rules require that they review the actuaries basic assumptions when they audit their work. I have worked with statistical calculations in accounting to extrapolate error rates, determine sample sizes, for review of actuarial reports etc. You have to determine which area interests you more and move in that direction.

I have found most of the work that I've done over the years to be extremely interesting and challenging. Accounting work can be very varied as it is more than just adding etc. I believe that Elizabeth has confused bookkeeping with accounting as she obviously doesn't have a good understanding of accounting rules or what accountants actually do. Just go to fasb.org and look at statements 123R, 133 etc. to see how complicated accounting can be.

To say that an actuary is smarter than an accountant indicates that someone's experience is severely limited. Just look at our president and note his intelligence and wealth to see whether it takes a high IQ to be rich. If you look at accountant's salaries some make over 7 figures a year and a shareholder partner in a "big 4" firm averages in the range of $500,000 or more a year.

Hopefully you will find this useful.

Stephen Lewis, CPA

Why do you come to this newsgroup since you obviously are not an accountant just someone who thinks they are smarter than they are. If you are such an intelligent person I challenge you to read SFAS 123R and explain to this newsgroup how to apply the rules. If you take my challenge, I'll then provide an explanation from a dumb old accountant and we can see who understands the rules better. Oh, just to make sure you understand, SFAS stands for Statement of Financial Accounting Standards that are issued by the Financial Accounting Standards Board. The statement can be found at fasb.org.

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You obviously didn't do your home work on that one. G.W. Bush's, as well as Kerry's scores on a couple of tests that correlate with the WAIS are documented as well as the sources of the Bush family wealth.

Your talking about a very steep pyramid and then your using a very small sample to support a point which is insupportable.

And, on top of all that you were easily suckered in by a rather unsophisticated troll.

Just because it took a higher than normal I.Q. for us to get through accounting doesn't mean that we accountants are a group that has consistently shown great intelligence or wisdom. I only thank God that most people pay no attention to a great many of the more foolish of the public pronouncements of my professional brethren.