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 Topic: Big 4 Audit vs. Advisory ( Topic Closed)
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futurecpa23
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| Posted: 27 Jan 2012 at 18:18 | IP Logged
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Hi all,
Looking for some advice regarding career paths at the Big 4 (Ernst and Young to be more specific). I know their major lines of service include: Assurance, Advisory, Tax, and Transaction Support.
Just wanted to rewind a bit here... I did big 4 external auditing with them as an experienced associate for about 9 months in 2011 and took a leave for a few months to complete the CPA Exam. I have now passed all 4 parts and am looking to head back to EY. Before I go back to external audit, I wanted to know what an advisory career and transaction support career would look like for a recent CPA like me. I am not too interested in tax.
I know it depends on one's preference but just wanted to get an idea from people who have went down that career path. To tell you the truth, I think external auditing is rather repetitious and wanted a more dynamic career path if you will. By the way, my focus is on the oil and gas sector as I live in Houston.
So before I decide to go back to external auditing, is there someone that can shed some light on the different career paths that I mentioned and some specifics about the job? (i.e. travel requirements, what type of work is it, what a day looks like in an advisory or transaction support role).
P.S. I know they have this info on their website, but wanted different inputs from different individuals.
Any advice would help! Thanks!
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WSPcpa
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| Posted: 31 Jan 2012 at 12:12 | IP Logged
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http://www.wallstreetoasis.com/tag/transaction-services
Transaction services is much harder to get into than than
audit or tax. If you are given the opportunity, it will
definitely make for a more exciting career. Hours will be
a
little higher with more spontaneous times of a lot of
hours, pay will be slightly higher but not by much. Exit
opportunities are better but may be more limited in scope
than
audit, but can including certain highly sought after
positions in finance if you play your cards right
(banking,
private equity ect)
__________________
If it were easy, everyone would do it
It's the hard that makes it great
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Virgil
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| Posted: 04 Feb 2012 at 19:29 | IP Logged
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Not sure how much more "exciting" it will be if you're merely doing Due Diligence. But I guess anything is a step up from audit huh?
Nonetheless, it's a nice career choice with interest exit opps depending on your specific role within TS. The people I've talked to about it said they enjoyed it because they got out of audit.
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db729
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| Posted: 05 Mar 2012 at 15:11 | IP Logged
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I never did TS but spoke with a couple of associates & directors in the due diligence group and here's what I got out of it:
1. Not sure if you know what they do, but they're just basically "advanced" auditors that focus on specific areas of the financial statements as opposed to the entire thing. During a M&A transaction (usually a leveraged buyout since you're working with PE firms), part of the due diligence process is obviously making sure that the financials are accurate. There are certain areas that are scrutinized a lot more. I don't know what specific line items they do the most work on, but I'm sure its any account that significantly impacts cash flow due to the nature of a LBO (I can explain if you want).
2. Hours aren't necessarily worse, just less predictable and more volatile. In audit, you're pretty much know your schedule well ahead of time because audits occur every year (unless your firm loses the client). However with any advisory/consulting engagements, it's based on whether or
not there's a live project going on and those are usually not
reoccurring mandates. This is why your billing rates are higher, which also translates to a higher compensation compared to audit.
3. Travel requiring overnight stays will be part of the job. Target companies aren't always going to be in the same vicinity as the acquiring PE firm and the due diligence is done on site. I think it's typically a couple of days or a week of out of town travel. Obviously it could be less or more, but I was told it's generally a fairly short trip. If you end up focusing on oil & gas, then there might be a chance you travel less than if you were more of a generalist. I don't know the exact demographics of O&G companies since I don't cover that industry, but I wouldn't be surprised if most companies are concentrated in the Texas region. Most investment banks have a regional office in Houston that covers Energy & Power.
4. Promotions aren't as structured as audit as far as timing goes. The titles are still the same, but when promotions happen aren't as defined. This is the case for all advisory, not just TS.
5. Building off of point 2 a little, how busy is dependent on projects, which is
dependent on deal flow. Back in '05-'07, PE firms were buying companies
left and right while taking on obscene amounts of debt to finance the
transactions. Post the financial crisis, there's still activity going
on, just not nearly as much. The M&A market picked up first half of 2011 and it came crashing down the second half. Will it eventually rebound? Of course. But a lot of people are speculating that it'll never return to the pre-crisis levels, at least not how much companies are levering up. This could potentially matter when it comes to promotions and job stability. Advisory is always on the top of the chopping block when it comes to lay offs. How much it'll actually matter? Who knows, the economy is crazy these days. But just something to keep in the back of your mind. Although having said that, energy & power (which oil & gas falls under as a vertical) has always been one of the most active industries when it comes to M&A, so you may not be as affected if you do end up still focusing on oil & gas.
6. Exit opportunities have typically been cited as IB, PE, Corporate Development, or MBA. For IB/PE/CorpDev, you're technically not gaining direct relevant skills required for those positions, but you're at least familiar with the transaction process. For IB, as long as you show an interest in finance (demonstrated by doing TS), they'll at least consider your application. For PE, because you're working with PE firms all the time, they might scoop you up because they like you and think you produce quality work, even if it's on the accounting side.
7. The due diligence group typically hires senior associates or occasionally someone with at least two busy seasons under their belt. From my understanding, all of them have audit backgrounds though. Maybe at the senior levels you'll see someone with a banking or PE background rather than audit, but I can't imagine this happening at all considering what compensation of high finance compares to accounting.
I think I've covered as much as I know. TS was definitely something I strongly considered and would have done had I stayed in the firm long enough. Hope this helped!
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Fusion
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| Posted: 22 Mar 2012 at 18:57 | IP Logged
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TS is not the group you want to get into. It's business
valuation. Get CFA.
__________________
CPA-Done
MSA-Done
MBA-Next
CFA-?
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