There is news that the big 4 accounting firms are interested in offering a new type of partnership. This means that there is a new path to big 4 accounting firm partner in 2018.

Traditionally the big 4 have made partners in assurance, tax or advisory, but recent news is that the big 4 will be having an all encompassing partner in what some are calling a “one firm” partner.

A one firm partner would have knowledge in all aspects of accounting. Meaning that they will have knowledge in audit, tax and advisory.

When I first heard about this this blew my mind, but I think it makes sense given the current environment.

Most big 4 partners are really just sales people. They march out to clients and just open up their briefcase of shiny new big 4 toys. Whether that’s automation, robotics, artificial intelligence, blockchain, workforce of the future, outsourcing of accounting departments.

That’s primarily what partners do nowadays. It’s the more junior people that are doing the majority of the technical work. Like looking up technical guidance and documenting technical positions.

It used to be that partners were the most technical people in the firm and you had to be technical to be a partner but that’s not true anymore. You don’t have to be technical in accounting tax or managerial theories.

Senior Leadership At The Big 4 Are Already One Firm Partners

I’ve know many members of senior leadership inside of the big 4 accounting firms. The most senior people I meet are often not very technical at all but they are often very connected internally or externally.

This new type of partnership would be ideal for people that have strong connections and networking skills. Clients want this new one partner approach because they are tired of trying to remember the rotating carousel of big 4 partners that they have to deal with if they want tax, accounting or consulting projects.

Even within each area many companies have to deal with different partners. For example within tax you might have to deal with a partner that does transfer pricing, one that is a federal compliance specialist and another that’s a foreign tax specialist.

Clients Want One Firm Partners

How would you feel if you were a cfo, controller or tax director and you had to keep track of all these people?

On top of that the big 4 are known for high turnover so you also have to deal with multiple people on your engagement leaving on all the time.

That’s where this new type of one firm partner is ideal for clients.

For clients, now they only have to deal with one partner that takes ownership of your account. You can ask them any question and they have to be able to answer it. They can’t just punt and say that they aren’t the person that deals with that type of question and provide you with a name and number of another partner. Often times specialty partners aren’t in the city that the client is in, and they have to be flown in or have to telecommute.

Clients don’t like dealing with this. They want to be able to see and talk to key partners at a moments notice.

Additionally as you’ve seen in the news with the big 4, they do almost everything for the largest companies in the world. That’s why regulators want them to be broken up.

The partners for the big 4 know that most companies don’t have another choice for professional services, so they know that they no longer need to be the most technical professionals in a given field.

They just need to be available and empathetic to their clients needs. Therefore big 4 partners are willing to sacrifice technical knowledge in order to provide clients what they want and sell more work.

Now why do I say that these partners have to give up technical knowledge? I say this because you can’t know audit, tax and consulting all at once. The new one firm partners will have some knowledge about each of these areas, but you can’t be an expert at every field. It’s just not possible, so it’s obvious that these new partners will be focused on selling and not so much on technical work or executing of work.

I get many questions about what people need to know about consulting tax or audit going into their interview or how to be better at finance. People need to stop thinking that way unless they have dreamt about one of those fields their whole life. You need to be more focused on going into a group that will make you successful. Think of a group where the people are similar to you and are willing to look out for you.

In order to learn the skills necessary to become one of these one firm partners, I recommend you take our big 4 interview course as we cover the skills necessary to be an a good big 4 professional.

Additionally I recommend signing up for our patreon page where we will give some more insights into how to become a one firm partner. I will also be releasing which firm is adopting this one firm approach first and which other firms I think will adopt it the fastest after that firm.

The performance review process in the big 4 is where the rubber meets the road. It’s where everything regarding your career is determined. It determines whether you will get promoted, whether you get a good raise, a good bonus or whether you will be coached out of the firm. This is also where new partners are determined. It’s essentially the end goal of a career in the big 4. If you’ve always dreamed about working at the big 4 and having a great career in the big 4, then you should be thinking of your approach for big 4 performance review season.

Performance review involves having your performance for the year analyzed and recorded officially with human resources. This is an essential part of any corporate job because lawsuits and legal issues can arise from not having performance reviews and providing feedback to employees.

The official performance review process is really just for documentation for HR purposes to have a consistent review file. A review file for HR to track your performance, for you track your performance and for determining compensation. Additionally, if the big 4 want to get rid of people, the performance review process is typically where that process starts.

I wanted to cover this process since annual performance season is upon us in the big 4.

Logistics of the Big 4 Performance Review Process review process

First off, there’s the official performance review. This typically aligns with the big 4 firm’s fiscal calendar. There are typically two review points. One at the end of the fiscal year for the firm you work at and one in the middle of the fiscal year. The big 4 typically send out emails about how the process works, and they tell you the timeline to submit your performance review requests. They also provide the timeline for when you can expect them back. They also provide a time of when the group review meeting is. Only group leadership is invited to those meetings. Performance is reviewed on a group basis. Groups are aligned by market, line of service and industry. For example, if you work in financial services consulting in London, UK, then you would be assessed against other individuals in the London Consulting Financial Services practice. You would not be assessed against other groups.

The performance review process begins with you initiating a request to your supervisor to review your work. You have to summarize the work that you did during that time period. Depending on the firm that you work for you will have at least two review periods a year, the midyear and the end of the year.

After you submitted your request, the person reviewing you for that engagement will rate you on your skills and contributions to the team. Typically, there is a skill rating system. Some firms just have generic feedback where your feedback is provide in a more generic form rather than on a formal skill assessment. The feedback is usually provided around business skills like your ability to complete technical work, your ability to communicate, your ability to delegate, your ability to understand your responsibilities, your ability to perform work by yourself with little guidance, or your relationships with your clients. After you receive your ratings for all your client engagements, they are typically submitted to your coach or mentor at the big 4.

That mentor then presents your file to the leaders of your group.

If you want more guidance on how to write the best performance review and prepare for the big 4 performance review process, then you need to make sure to subscribe to our podcast but we also we have a patreon page where we have released an additional podcast on how to have the best performance review at the big 4.

Now that we’ve covered how the process works let’s go into a little deeper analysis.

The Process Is Not Transparent Nor Is It Objective

One thing that confuses a lot of people during the big 4 review process is that they think the process is completely objective and transparent. This isn’t completely true. So much of it is subjective and happens behind the scenes and is determined by personal relationships. Very little is determined based on a person’s ability to work hard and be a technically strong accountant.

Another thing to say about big four accounting firms review process is that it should never be a surprise each year when it comes time for performance review as to what your review will be.

You should always know ahead of time how your performance is going to be rated. If you don’t know what your review will be ahead of time, then you are leaving your review up to fate.

Decisions are made behind the scenes

The real decisions are made behind the scenes before the performance review season is really in full force. Partners know what ratings they are going to give people for the most part, but it is not always up to the partners to determine how review ratings will be distributed.

Sometimes rating distributions are determined by firm leadership in conjunction with HR. Firm leadership will provide guidelines to HR on how to rate individuals. HR then receives that information from leadership and provides that to partners in the each group. Partners are told how many people can get the top ratings that year and how many people need to get the lowest ratings.

You can lose your jobs as part of the big 4 accounting firms performance review process

If the firm or group is performing poorly, the leaders of that group are also told how many of those lowest rating people need to be fired or removed.

This is becoming a lot more common in the big four accounting firms recently because they overhired at the associate level. This isn’t just one firm either. Multiple firms overhired, so I’ve been seeing a lot of downsizing across the board at the big four where the lower tier associates are more likely to get documented out of the firm.

In the past, that wasn’t the case. In past years even if you were a bad performer, they kept you around because more bodies meant more revenue. However, the big 4 see that clients don’t value associates anymore.

They value technology.

This is because the lowest of the low at the big four don’t have many skills that can be utilized by clients right away. Associates have to learn before they can contribute. I think this is why accounting curricula at colleges around the world will change to include technologies like data and analytics similar to the the master’s progam that KPMG is developing with  multiple universities. Big 4 candidates will be expected to know about alteryx, salesforce and tableau right out of the gate.

You don’t come into the big four knowing how to read a ledger or how to prepare a return, and the big 4 aren’t always willing to help.

Oftentimes, you step in the door of the door at the big 4 with people that don’t want to train you.

They rather utilize software to perform their work. Associates used to be able to contribute right away by making copies with a copy machine, they could fax documents to other offices or clients, or they could be utilized to tick and tie physical workpapers, but a lot of that has been removed the technology.

To get rid of associates that they don’t need, the largest accounting firms try to bucket as many associates as possible into this lower tier of performance ratings.

With that being said, partners know who can get the highest rating and who can get the lowest rating and that’s determined before the review meetings that we referenced earlier.

Just because you get a good review doesn’t mean you will be a top performer

Based on that determination as the leadership level, your performance review will fit into those predetermined buckets. Your final rating might not match your individual review ratings.

For example if even if you get a good review from somebody you work with, there might be enough room for you to be an outstanding or top performer in your group.

People might really like working with you, but there’s not room for everybody to get top performer in your group. You might just get an average type of rating for a number of reasons.

One reason they might not give out top ratings in your group is because of compensation. If they give you the top rating, then they might have to give you the top compensation package or a really large bonus. This is because the HR handbook for a lot of these firms requires top compensation to go to top performers.

In order to keep compensation costs fixed, they will bucket you into middle of the pack or a lower tier.

You have to be careful of partners and markets in the big four that aren’t performing well or that have lost of the client because there’s more tendency for people to go into those lower buckets. If your partners aren’t real active in selling work, then they’re not going to generate that much revenue which means they won’t be allocated additional compensation for bonuses or salary increases. Partners are selfish during review time, and any increases in compensation go to them first.

Then they allocate compensation to the staff. So, you don’t really want to work in a group where your partners are not that active in selling work or maintaining good client relationships. Even if you are a great performer in a low performing group, you might not get a good rating or good compensation.

A key part of the performance review process is going to a group that is doing well. If the group is doing well, then you can receive more compensation.

This is where you have to keep your ear to the ground on emerging trends.

You have to pay attention to our podcast and our website because there are industries that are growing like blockchain and cyber security. There are certain parts of the tax groups with U.S. tax reform that are also growing quickly.

You want to trend work in these groups because these groups are going to get additional compensation and you’re more likely to receive a better review.

The reason you’re going to receive a better review in those groups is because there is so much work to be done that if you just help by removing a small amount of work from someone’s to do list then that is enough to give you a high review.

Alternatively if you think about a group with no work or the same type of work year-over-year, it’s hard to stand out because there isn’t much work to go around. With the little work that you do get in that type of group you really have to overperform in order to stand out.

If you want more guidance on how to write the best performance review and prepare for the big 4 performance review process, then you need to make sure to subscribe to our podcast but we also we have a patreon page where we have released an additional podcast on how to have the best performance review at the big 4. We are also going to have content such as performance review checklists and guidance on how to set goals each year. Have questions about the performance review process? Ask questions in the comments.

I didn’t want to miss an opportunity to speak about how both the Facebook Cambridge Analytics scandal and the Russian election hacking scandal might impact the big four accounting firms.

The facebook Cambridge analytica scandal is where a third party service mined tons of private data from facebook users. They used this data to try and influence the United states election. Russia tried to take similar steps in the U.S. by using facebook data to manipulate the U.S. election. Russia has also tried to hack facebook and other U.S. companies to find data that they could utilize against the United States.

Now you might be thinking that the only thing that might come out of the Facebook scandal and all of the investigations into Russia is that you might want to delete your Facebook account or you need to install antivirus software or malware software. But that’s not the only thing that will come out of all of these cyber security concerns in the news right now.

This can actually benefit the big four a lot. What came out of all the testimony from Mark Zuckerberg last week was that Facebook didn’t know a lot of what was going on.

Either that or the lied about it.

Either way Facebook has to do a lot more work around their cyber security and their controls around cyber security. Many times during Mark Zuckerberg’s testimony, he admitted it would take a lot of effort to install new controls or to look into past data breaches.

But just because looking into it might take a lot of time and effort doesn’t mean that Congress and Facebook’s shareholders won’t want them to do the work.

This is a perfect scenario for the big four accounting firms to step in. Facebook might have all the technical knowledge to look into these data breaches. They might have the coders and the cyber security specialists, but they probably don’t have the time in their schedule to unravel all the misuses of user data over the past few years.

Additionally, once they complete their investigation, they might not have all the experience of how to present that information to the board. The board of facebook is not going to go easy on Mark Zuckerberg in future meetings. They are going to want to know what steps are being taken to prevent this in the future.

Both of these areas are where the big 4 shine.

• They have employees with lots ofavailable time that can do this kind of consulting work.
• Additionally the big four partners are very familiar with what’s needed to present to the Board of Directors of any large company.

There are many activist shareholders and investors of Facebook calling for him to step down as chairman and CEO of Facebook. They would like somebody more seasoned to be able to deal with scandals like this in the future. They will also want someone more seasoned in the cyber security space.

The board is going to have more ammunition than ever to try to get Mark to step down because there will likely be increased regulation across the board in the United States and Europe around social media.

Some estimates from Goldman Sachs and other financial firms say that Facebook could face 7% decrease in revenue. In order for Mark Zuckerberg to maintain absolute control of Facebook, he’s going to have to make a good presentation of his findings around privacy and cyber security controls over Facebook’s data.

This is where firms like the big4accountingfirms can really make a ton of money because not only do they have plenty of consultants that could help and be on the ground floor at Facebook for a number of weeks or months to do this work, but they also have the professionalism in order to create a presentation for the Board of Directors.

There are also a number of big four partners that are already familiar and well-networked with the Board of Directors at Facebook. The Board of Directors at Facebook probably has some big four alumni on it as well, so Mark could probably really utilize professionals at the big 4 do some of the clean up work on his and Facebook’s brand right now.

This isn’t the only cyber security issue in the news. There’s obviously the Russian election hacking scandal where the Russian government was suspected of manipulating the U.S. election.

They utilized Facebook to manipulate election along with other social media websites.

The big four can also use this hacking scandal to scare large corporations and say that their data can be accessed and manipulated by foreign governments. This is really a good opportunity for the big 4 to sell more cyber security services to the largest corporations in the world.

This is also a good opportunity for all of you out there to consider a career in cyber security at the big four. If you haven’t decided which line of service you’re going into and may be interested in working in consulting, then the cyber security space might be appealing to you. Cyber security is becoming more important every day and the big four aren’t only accounting firms anymore.

If you’re looking for a job in consulting but you’re not sure which industry you wanted to work in, obviously cyber security would be a very lucrative career as it keeps on hitting the headlines more and more every day.

Even the best tech companies in the world like Facebook don’t have great controls to prevent their information from being accessed and manipulated, so there’s obviously a lot more work to be done in this area which means that there will be plenty of jobs and plenty of money made in this sector in the future. That’s something to keep in mind as you go down your big four recruiting path and career.

There wasn’t too much news about the big 4 this week other than a few controversies that popped up so I wanted to speak about an article that was recently released in Quartz spoke about a millennial uprising at the big 4 accounting firm Pricewaterhousecoopers. This article was later picked up by Fortune.com

Quartz is a blog that speaks about management at large corporations and how to become a better manager.

The article starts out speaking about what the culture “used to” be like at PwC. According to the Quartz article, the culture at PwC used to be the standard cliché of the big 4 accountant working around the clock.

Candidates for big 4 jobs at colleges just knew that that’s how life had to be at the accounting firms. Candidates knew that you had to sacrifice thousands of hours of your life to succeed at the big 4, but everything changed for PwC in 2013 when 2/3 of PwC’s workforce became millennials.

This is when this millennial generation started complaining more about all those wasted hours according to the article. This time PwC was more willing to listen though because they were losing employees at historic levels and they were also losing college recruits.

The millennial workforce was ok with working long hours but they just wanted purpose and they wanted flexibility to work from where they wanted.

From my point of view, I agree with this because working at the big 4 is frustrating. So much of working at the big 4 is just showing and being present and waiting on workpapers or waiting in for a partner to sign off on an audit step, a tax return or a project.

The baby boomers used to be glad to have a job, so they might have been more willing to stay late for no reason. Millennials aren’t as willing because they know the way people work is changing. Millennials also value family time and working out more, so we want to get out and do those fun things that we enjoy instead of wasting time in a cubicle for our boss to get comfortable over some intangible deliverable.

According to the article, PwC tried to blame it on millennials being different, but when they actually questioned their workforce they found that everyone wanted the same thing. This included baby boomer.

This is another obvious observation to me.

Of course everyone rather spend time being with their family and enjoying their hobbies than in a cubicle or office all day. I won’t say everyone because I have encountered a few people out there that truly enjoying doing accounting and tax, but most people I’ve interacted with over my career are in accounting because it is a stable job. Not because working 80 hours a week is extremely fulfilling. Especially at the associate level where you don’t necessarily interact with the client and see their reaction to your work product. It’s hard getting a sense of fulfillment without seeing a client’s positive reaction to something you put together.

New worklife flexibility plan at Pricewaterhousecoopers

The article goes on to explain the various initiatives that PwC put in place to combat this terrible image they had internally and externally at college campuses. One of those initiatives was a flexibility plan. This flexibility meant that people could work for home when it fit their engagement and that they could leave early on Fridays. Most of the big 4 have some kind of flexibility policy at this point in time.

PwC Implements Discover Retreat for Newly Promoted Senior Associates

Another benefit that Pricewaterhousecoopers rolled out was a 4 day retreat for their newly promoted senior associates. The article says this retreat was rolled out in 2013, but it was actually rolled out in 2011 so quartz needs to check their.

The retreat is called discover. Since PwC rolled this out for newly hired senior associates, this means that most of those attending were in their early 20’s like 24 or 25. They were basically all millennials. This is a key datapoint because there is a lot of sharing that goes on at Discover. Millennials are more willing to open up about who they are than baby boomers are according to Quartz.

The objective of this retreat is to show the young people at pwc that the organization cares about them, but it is also to help the new senior associates learn tactics to help them last in their careers by teaching them mindfulness techniques and other well being techniques.

There is a lot of fun at these retreats because they have things like yoga and rock climbing.

There is also a lot of openness and vulnerability at these retreats.

The retreats start out with a ‘Who Am I’ story where these new senior associates try to figure out who they are by telling stories about themselves in a group setting. There is a lot of crying and vulnerability in these sessions.

Overall the sessions are meant to help young people figure out who they are, network with other professionals and begin to think about how to make their professional lives more sustainable.

Work well, Be well

The article also speaks about PwC’s policy around work well be well which is a health project that PwC signed up for through the advice of another consulting firm.

Can I just say something here. I always find it hilarious in the big 4, that they hire external consultants when they have thousands of internal consultants. I don’t doubt that their internal consultants make more by billing clients, but not every consultant at PwC is working at 100% capacity. I know that not every consultant at PwC is also well versed in physical fitness and mindfulness. However, if you utilized associates with free time to surf the web and come up with a well being program, I think they would be able to come up with something interesting that the big 4 could implement.

The outside consulting firm that PwC utilized is named the Energy project. The belief of the energy project is that companies see better results when their employees manage their time better and avoid burnout. They believe that productivity drops off after 50 hours of working a week. Many other firms like Goldman Sachs and law firms have not adopted this mentality and still demand 70 hour weeks from their employees. The energy project has worked with other large companies like Google, Facebook, Coke and Pfizer.

PwC has partnered with the Energy project and adopted the work well be well approach to helping employees balance their time and adopt a more healthy lifestyle by working out and utilizing mindfulness.

Conclusion

What does this mean. I think all these things being adopted by PwC are great news and it makes Pricewaterhousecoopers sound like the Disneyland of the big 4 accounting firms, but I would caution people from reading too much into this article. At the end of the day, PwC and the other big 4 firms are still a client service business set around deadlines. I believe this post was a bit of corporate blogging. Corporate blogging is where large corporations use other companies platforms like Quartz to portray their message so that it looks like an independent story.

I think PwC helped facilitate the writing of this story to increase recruiting numbers, and the story speaks to that a little bit. I’m not saying that Pricewaterhousecoopers or any of the other big 4 are evil or duplicitious, but I also think that a workwell program and a retreat or only as good as the leaders that adopt them. If the leaders of PwC and the big 4 don’t adopt or believe in these programs, then millennials and recruits are still going to burnout. At the end of the day, if you want to test the big 4 on their worklife balance programs, ask just one question when you are interviewing. Ask your big 4 recruiter or big 4 partner that you are interviewing with, how they measure their employees. Ask them if they use utilization or billable hours as a key metric of performance. I can already tell you the answer. The answer is yes. You typically have to have high utilization as well to be a good performer and achieve promotions. This means that you have to have at least close to 35 hours charged to a client a week. This doesn’t include time for administrative tasks like group meetings and taking webinars. So if you take time out of your day at the big 4 to do some meditation, you aren’t going to be rewarded for it. You are still going to be expected to fill out your time sheet with chargeable time. It’s hard to avoid burnout and get your utilization because if you remember form the article burnout starts to occur at 50 hours of work a week.

Being rewarded by how much time you charge to client codes is true even if you are efficient. For example, if you can complete a 30 hour project in 10 hours, you don’t get a reward or bonus. You get more work so that you can make your firm more money.

What else can we learn from this Quartz article? It points out that some of the firms have perks that are worth investigating. PwC has Discover and Deloitte has Deloitte University. Should you choose a big 4 because of these perks? No you shouldn’t pick a firm only because of a perk that you have to wait years to receive, but it does speak to the culture of Deloitte and PwC versus EY and KPMG. My main takeaway is don’t think that PwC or the  big 4 are 100% focused on your wellbeing because of this article. They are still major corporations that are in existence for client service and billable hours. Until they get rid of metrics of billable hours and utilization, it will be extremely hard to have true worklife balance and flexibility. However, culture is important, and it appears that PwC’s culture is leaning a little bit more towards employee focused than some of the other big 4.

The career advice we will be giving today is how to gain experience while you are still in college. One fear of many big 4 candidates is how to show that you have experience when you are still in college. I mean you most likely don’t have time to hold down a full time job. You might not have that much job experience at all so where do you get experience that you think you might need to impress a big 4 firm and be able to take credit on your big 4 accounting resume.

Well some ways that you can gain experience while still in college is through interning.

Internships

Most people think that you have to intern only with the big 4. Well you don’t you can get an internship anywhere around your college campus. If you want to be an auditor, maybe you can intern at a local cpa firm or even with a bookkeeper.

If you want to be a tax accountant then volunteer with a tax preparer in your area during tax seasons.

Get A Part Time Job

Another way to gain valuable experience for your big 4 accounting resume is by getting a part time job. You don’t have to work full time to get valuable experience. You can oftentimes work right on the campus of your school. This will be good enough to show that you can handle multiple responsibilities and manage your time. You also get the benefit of earning some money on the side.

Freelancing

Another way to get experience while in school is by freelancing. There are all kinds of websites online (fiverr, freelancer, odesk) that have opportunities for freelancing. Use some skills that you have now or just do data entry on one of these websites. There are many opportunities available on freelancing websites for English speaking skills without college degrees.

Tutoring

The next way to gain experience while in college is by tutoring. Use what you’ve learned so far in school to tutor others. This will help you gain valuable experience that you can speak about on your resume or at big 4 networking events.

Volunteering

Another way to gain experience while in school is by volunteering. Volunteering events often require various skills and also shows that your interested in something other than yourself. You can gain valuable skills that the big 4 will like while volunteering if you choose different places to volunteer throughout your college career. You don’t need to volunteer every single day either. You can volunteer once a week or once a month for a couple of hours to gain valuable experience. Another great place to volunteer is with organizations like VITA and other tax preparation offices that offer tax preparation service to less fortunate people for free. Not only do you get credit for volunteering, but you also learn more about accounting while you do it.

All of these experiences will help you gain enough experience to put down on your big 4 resume.

Many people in public accounting want to transition into a finance or consulting role. Why is this? You might have your own reasons, but let’s explore why other people might want to transition into a finance or consulting role.

The reason that people want to go into finance and consulting is because they are seen as more front office roles versus accounting. Accounting is seen as a back office role and has a negative connotation. If you work in the big 4 and especially in assurance, your clients typically dread seeing you. There is the typical stereotype of the client hating their auditors.

If you are in finance there is a perception that you are helping a company take their existing money and make it into more money. This is viewed as sexy. Another reason people choose finance is just because of the way it is portrayed in the media and in movies. You have movies like Wall Street and the Wolf of Wall Street that really speak to young men. Even though those movies did not end well for the main characters, people still think that being on Wall Street equals cool. Additionally, the media is constantly fascinated with CEOs and CFOs. That gives the finance role more of a celebrity feeling to it.

The same goes for consulting. Consulting is seen as beneficial and helping the client out. There are plenty of headlines around consultants helping firms out as well. Consulting has a positive connotation to it as well as opposed to the negative connotation of accounting.

How to transition into Consulting

It is much easier to transition into consulting now than it was 10 years ago. This is because 10 years ago, the big 4 accounting firms did not have large consulting practices after many of them sold their consulting practices after Sarbanes Oxley regulations.

Now all of the big 4 have large advisory practices. You can tell by the amount of revenue that each of the big 4 accounting firms earn from advisory each year.

To transition into consulting, you merely need to research how you transfer within the big 4 accounting firms. It is different within each firm. It is usually easier to transfer as an associate because there are more openings. They can fill one of their openings for new recruits with existing experienced staff from other practices.

What are the most popular types of advisory. The most popular types of adivosry in the big 4 are M&A or deal advisory and accounting advisory.

It would be easiest for an existing assurance personnel to transfer into the accounting advisory practice since they likely have experience auditing. They can use the knowledge gained from auditing companies to help other companies improve their accounting systems or accounting policies.

M&A is also popular because of what we previously talked about. Mergers and acquisitions are also popular in the media. For example, Amazon’s acquisition of whole foods was all over the headlines recently as of the writing of this article. People want to be associated with things that hit the headlines. What the big 4 do in this space is that they perform the accounting due diligence side of transactions.

How to transition from big 4 accounting into finance

How can someone in the big 4 transition into finance. First you need to determine which area of finance you want to go into. Do you want to be a CFO, a treasurer or an investment banker. You need to figure out which area you want to go into before you start your transition.

One of the most important parts of transitioning into finance is building out your network. Having a strong network will help you easily transition into a CFO type of role. Most of the people that I know that became CFOs got the job through some sort of networking. They knew the right people when the position of CFO or a position below the CFO opened up. Accepting a position directly below a CFO is not a bad position. It is good especially if the CFO will be leaving soon and considers you in their succession planning. Accepting a controller role is another way to get closer to the CFO or treasurer title.

I also want to speak to the fact that I’ve seen both assurance and tax professionals obtain the title of CFO. Even though you might be in tax don’t let that keep you from your dreams of being in finance or achieving the job of a CFO.

Another job that many big 4 professionals want in finance is investment banker. The best way to obtain this job is by obtaining good reviews since ibanking is a high-performing culture. It would also be good if you are currently in the financial services line of service in your firm. It would be especially helpful if you were in the M&A advisory group that I was speaking about earlier.

In conclusion, you can transition into finance and consulting from the big 4. You just have to figure out which role you want and get started on it today. You can’t hope that you will toil away at the big 4 and one day someone will just notice how great you are and ask you to be in finance.

What is the difference between audit and tax accounting in the big four accounting firms.

 

 

Tax vs audit is a popular question from many big 4 candidates.

In school you typically choose accounting as a major without choosing a designation of which field you will go into. This changes after a few years as you get closer to graduation and as you start interviewing for internships at the big 4. You have to choose which line of service you want to go in. Most people choose between audit or tax.

Audit is obviously the most popular line of service as it is the bread and butter of the big 4 accounting firms, but many people do actually spend some time deciding between the two.

Why people choose audit at the big 4

First let’s go over some reasons why people choose each line of service.

Let’s cover audit first. People choose audit for many reasons. Some people choose audit because they think it will allow them to be the most successful. They think there are more opportunities in audit. They think they can be a cfo or ceo one day because of what audit has to offer. The common conception is that in audit you learn about the whole financial statements, so you learn everything there is to know about a company’s operations. This is true to some degree, but there are many problems with this as I’ll cover later.

Why people choose tax accounting at the big 4

Now let’s cover the reasons why people choose tax

People also choose tax for many reasons. Some people choose tax because they think they will travel less than audit and won’t have to be at the client. Other people choose tax because they enjoyed tax class in school. Other reasons that people choose tax is because tax people make more money than audit professionals out of school.

Now let’s go over some misconceptions about each line of service.

Misconceptions about audit at the big 4

Many people think that they can automatically turn an audit career into instant success as an audit partner or become a CFO. What people have to realize is that audit is a common choice in the big 4 career so many people choose it. Therefore, you have more competition. In order to differentiate yourself in audit, you have to stay in a position or accounting firm for longer than you would in tax.

Misconceptions about tax accounting at the big 4

One common misconception about tax is that you will have to travel less and that you will have to interact with clients less. Depending on where you work and your client you might have to travel more than an auditor and you might have to interact with the client on a daily basis. Don’t choose tax just because you think you will have to be less social and travel less. Another misconception is that tax doesn’t offer as many opportunities as audit. Again there are less people in tax which means less competition for jobs. There are also many more specialties in tax, so if you become super specialized you can have amazing opportunities in the tax field.

Based on all of this information what is my recommendation for which line of service to go into. You should pay attention to all of your classes in school and see which field that you like more. For tax, I would say that you should be more into research and writing memos as you will be conducting a lot of research in tax. Don’t think that you will only be doing planning in tax though. You will have to provide support for the tax provision of the financial statements which means that you will still be doing some auditing as a tax professional. Another thing that I would say about tax is that you have to like the law. If you like law and the legal profession you will like tax. This is a reason that many lawyers are tax professionals in the big 4 as well. The most successful tax professionals are also lawyers. If you don’t like law, legal research and writing memos then don’t go into tax. Another thing that I would recommend for anyone thinking about tax is look into the specialities of tax like state and local taxes, international tax, mergers and acquisitions or federal tax. Learn a little about each and see which one you’d like to specialize in.

If you want to go into audit you have to realize that it will be a long road to that role as an audit partner and CFO. You will first have to get good at filling out templates and checklists. You will also have to get very familiar with audit database software. You won’t be learning as much right out of the gate, but if you stick with it for a number of years then yes you do have a chance at that CFO or controller gig that you’ve been thinking of.

Tax Vs Audit Salary

Another factor is that auditors don’t make as much as tax people as tax people are seen as specialists. The money does even out over the years though depending on performance. You can obviously earn more money as an auditor if you end up as a CFO or an audit partner on a large client. It is also typically the audit partners that end up becoming the CEOs of the big 4 accounting firms.

In order to analyze which profession earns more in the big 4 we will be utilizing payscale and glassdoor for salary information.

If you go on payscale and look at what the average wage for an auditor is it is at $53k. If you go on payscale and look at the average salary for a tax accountant it is $55k. Based on this information you can see that tax accountants earn more than auditors.

Hop on over to glassdoor.com and you will see that the average salary for an auditor is $60k. if you look on glassdoor for the average salary of a tax accountant you will see that it is about $66k.

This information is very good for a person looking to figure out which profession to enter if they are basing their decision on salary.

However, which is correct?

I think both sites are valuable as they show that tax accountants do make more than auditors which is very true in my experience. I have almost 10 years of experience in the big 4 as well so I have seen a lot of people’s salaries in the big 4, and I have known many auditors that are underpaid.

The problem with the information on glassdoor and payscale though is that they are different, so which is more accurate?

In my experience, I would consider glassdoor more accurate for big 4 accountants. I think that the average starting big 4 accountant starts out right around $60k which is what is reported on glassdoor.com.

In my experience tax accountants do make about 10% more than their peers in audit.

Why is this? Is this just because tax is cooler and better? No it is because of how the big 4 earn their revenue. Right now audit is struggling. Just check out some of the latest revenue releases from pwc, deloitte and EY, and you will see that their audit practices all have been struggling while tax has been growing at a steady rate.

PwC 2017 Revenue Report

Deloitte 2017 Revenue Report

EY 2017 Revenue Report

This has occurred because audit firms are seeing a huge fee pressure on their audits. This is because companies see their auditors every single year and they perform the same work, so why shouldn’t they perform it better every year for less fee.

What this means is that the big 4 earn less revenue and therefore pass that lower revenue onto their staff accountants as a lower salary. However, tax keeps growing because there is increased tax regulation across the world. What this means is that there is an increase in tax compliance and an increase in the need for tax accountants. This translates into a higher demand and higher salaries for tax accountants.

In order to make the most money in the big 4 in either practice you need to go into a practice that is in high demand.

In conclusion tax accountants make more money than auditors on average and in my experience they earn about 10% more. Additionally, the need for tax accountants will only go up if tax reform gets passed. If earning a larger salary is important to you then maybe looking into a high demand career in tax in the big 4 is the right way to go.

So which line of service is better, tax or audit. I can’t give you a direct answer. You need to figure out which is the best for you based on your interests and your goals.

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One of the biggest questions about the big 4 is travel. How much do big 4 professionals travel? Some people think they travel all the time and other people are convinced that big 4 professionals don’t travel all the time.

I’ll provide some insight into travel in the big 4 as there are many misconceptions. Travel in the big 4 relies on several factors. I think there are 3 main factors that are worth covering.

1.The first factor is the size of the client. The one way you can reduce or increase the amount you travel is by the size of the client that you will work on. If you have a large client, there is a chance that you won’t have to travel much other than to that client. This is because you will have one main location to go to if the client provides you with enough utilization. Alternatively, if you want to travel a lot, you should get on a lot of small clients that way you will have to travel to multiple locations. If you want to figure out the clients of the big 4 firm, that you will be joining then make sure to visit our big 4 clients pages.You should then look up the locations of those clients to see whether they are located in the city or area that you will work in.

2. Another factor that effects how much travel you will have to do is the size of your practice. The size of your practice in the big 4 will impact how much you travel. If your practice is new or small, you will probably have to travel more because there will be less people in your practice that will have to cover a large region. This is especially true if you group is small practice nationally. If your group is a small group nationally then you will also have to cover a large region of the country other than the city that your home office is located in.

3. The next factor is the location of your big 4 office. If you work in the new York office, you might have to travel less as all your clients will be in the new York area. If you live in the los angeles area, you will have to travel a lot. One because you have to drive everywhere in LA and two is because clients are located all around LA and southern California. Additionally, if you work in a small office like Memphis, you will probably have to travel to multiple cities since Memphis doesn’t have enough major companies headquartered there to keep associates utilized for the whole year.

Ok now let’s talk about misconceptions about big 4 travel. Many people think that you can avoid travel by going into tax or audit. It doesn’t matter what line of service you go into the big 4. I’ve known people in tax that travel a lot. I’ve known people in tax that don’t travel at all. The same goes for audit and advisory. I’ve known people in audit and advisory that travel a lot and those that don’t travel either.

In conclusion there are several factors that effect how much you will have to travel in the big 4 .

1. One is the size of the practice that you will be joining
2. Another one is the size of the client that you would be assigned to
3. And the last one is the location of your big 4 office.

Depending on how much you want to travel you need to ask questions about all these factors during your big 4 interview. For example, If you don’t want to travel very much then you would want to work in a large office like New York in a group that has a lot of people nationally and you’d want to work on their biggest client. This would decrease the chances that you have to travel. The opposite would apply if you want to travel a lot.

If you are going to be a successful big 4 accountant you need to know what they do. Whether you are just interviewing for a job now or you are already a big 4 accountant. It is good to know what a big 4 accountant does.

I know some of you might be saying that I know they do. They are in audit, tax or consulting. Yes that is the practice of the big 4 that they are in but what do they actually do. Then you might say well they audit financial statements or prepare tax returns. But they don’t audit financial statements or prepare tax returns all day everyday. There is more to their jobs than just that.

 

If you just sit there and try to think about what a big 4 accountant does, you can come up with a million different things that a big 4 accountant does.

Especially when you start going into specialties like mergers and acquisitions and deal advisory or transaction advisory services.

When I think about the big 4 accounting firms, I think of the type of people that I’ve encountered in the big and how I’d categorize those people.

 

I’d put big 4 accountants into 3 main categories

• The Sales Person
•  the Admin Expert
• and the Technical Person.

The sales person is an expert at getting projects. They either have a ton of clients and those clients always have issues or they are good at entertaining clients. They take the clients to football games, soccer games, concerts, dinners or lunches.

I’d put big 4 accountants into 3 main categories

• The Sales Person
•  the Admin Expert
• and the Technical Person.

The sales person is an expert at getting projects. They either have a ton of clients and those clients always have issues or they are good at entertaining clients. They take the clients to football games, soccer games, concerts, dinners or lunches.

The technical person is good at writing articles and good at the technical part of the big 4 job. They do research and they know all the latest accounting or tax guidance. These people are usually involved in the national offices of the big 4.

Lastly, there is a person that isn’t good at either of those or just doesn’t like them. This is a person that is an admin expert. By admin I mean the administrative side of the big 4. They are good at billing, setting up engagements, budgeting, risk management. There is a place for these people too.

Since I’ve explained the 3 types of people that work in the big 4, we can now go into what the big 4 job entails, right.

It boils down to:

• Selling or (revenue generation) – working in the big 4 means that you are a profit center. This means you have to make your firm money.
• Administrative tasks – this is all the things you have to do that do not make your firm money.
• Technical Know-how – this is the fuel for the revenue generating engine. Clients won’t hire you if you don’t know that you are doing.

Most people think that working in the big 4 is all about technical know-how, but it is not. You have to know so much more.

Let’s explore each of the big 4 a little further now that we know the broad categories.

Selling at the big 4 accounting firms

First let’s go into selling. As I said before, as an accountant at the big 4 you have to be able to generate the firm revenue. That is what the seller does. They sell the big 4’s products. How do they do this. Well you can drill down into the components of how they sell to learn more about the selling side of the big 4.

At the big 4, I’ve broken down selling into 3 categories – I’m sure there are more – those categories are meeting with clients, promoting products, and closing the sale.  Meeting with clients is a broad category but you can break that down too. The tasks that the salesperson does here is attending conferences, going to the client site to meet with clients and taking the clients to meals or sporting activities.

As far as promoting products, the sales person does this by taking specialists to the client and showcasing the latest service offering. They also use social media.

Next let’s go over admin. Most people don’t even know the extent of all the administrative tasks that they will have to complete in the big 4. Like i said before there are some people that are experts in it.

There are so many categories of administrative task, but I tried to categorize it to 4 main areas.

Those areas are

• billing,
• project management,
•  team building
• and managing risk.

Admin people usually gain a lot of popularity if they are good at billing. Billing means that they are good at pulling WIPs which stands for work in progress. All this is is a report of the time detail of everyone who has ever charged time to that client code. That person is also good at analyzing that time coming up with an invoice and following up with the client to get that invoice paid. Since this is how the firm gets paid, if people enjoy this area they can still have a very successful career.

Some of the admin tasks that you will have to complete as a big 4 professional are

• Resource management
• Training
• Internal meetings
• Team building

This includes things like goal setting, performance feedback, training

There is also compliance with risk management which means maintaining your audit database or in the case of tax engagements it means loading documents into the document management system

Lastly is the technical area of accounting. This is how most people view big 4 accounting. Again I drilled down on this area of the big 4 as well and tried to break it down into categories. There is the regulatory knowledge, systems knowledge and technology changes. In order to be viewed as technical you have to specialize in one of those areas. For example regulatory knowledge. This means you have to stay abreast of regulatory changes like new pronouncements from the FASB or IASB. In the case of taxes, you would have to know the latest regulations and how they affect your client. If you wanted to seem really technical, you’d get involved in writing publications for your firm. Within each practice and even in each industry are further specialties.For example in audit and tax there are specialties in mergers and acquisitions. Those people don’t do any work other than work on mergers and acquisitions. Additionally, even though you might be technical, you have to apply that knowledge through systems. In auditing this means learning how to prepare workpapers using templates and uploading those to the audit database. You also have to learn various ERP systems like Hyperion, oracle and peoplesoft. Additionally, there are technological changes that change industries like tax and accounting. In order to seem technical you need to have knowledge of these as well. These are things like robotics, blockchain, automation and machine learning. Essentially, technical knowledge is the products that the big 4 are selling. What type of product will you be selling to your clients? Accounting advice or a new software tool that will automate their journal entries.

In order to succeed in the big 4 accounting firms, you need to know at least a little of each of these categories. The people that I’ve seen have the most success really focus on one single area though.

It’s almost as soon as you join the big four accounting firms that many people begin to think about leaving them. Many people even joined the big four accounting firms knowing the exact time they’re going to leave. These people know what they want to get out of accounting, so they make it happen and develop an exit strategy. They say, “I think I’ll just spend two years and then go into industry and then I’ll become a CFO.”

And the standard metric has become two years. It’s always been two years even before people started making senior associate in two years.

So when should you leave? There is no right answer to this question. It depends on the person and your goals

If you want to make more money in industry then you should probably stay in public accounting until you are at least a manager. With the title of manager, people know that you can be trusted around others. They know that you have technical abilities and some social abilities. Therefore, people will pay you more because you can attend more important meetings in industry. You can also work with the auditors when you go to industry. On the other hand, if you are just an associate, you will still be an associate in industry. You won’t be able to go to these important meetings, and you most likely won’t deal with the auditors.

There are some fast and loose guidelines though for leaving ASAP.

Signs You Should Leave Public Accounting Immediately:

1. If you get put on a performance plan you should no doubt leave your group.
2. If you don’t believe in your partners, you should leave your group.
3. If you don’t have people supporting you, then leave your group.

All this being said, make sure that you use your own judgment when deciding to leave. Don’t just bail without giving it some deep thought. Let’s go over number one first. If you get put on a performance plan or think you might get put on one, you need to leave. This is because you will be forced out once you are put on a performance plan. You don’t want to have that on your record while at the Big 4 firms so get out before that happens.

Second, it’s typically not worth staying in a group if you have no confidence in your partners. Weak partners are a sign of weak culture. You don’t want to work in a group with bad culture because this will drain all of your energy.

Lastly, it is hard to succeed in the big 4 accounting firms, if you do not have partners supporting you. You need supporters if you are going to progress in public accounting. Otherwise your performance reviews will always show that you are just meeting expectations.

When should you leave public accounting?

Is leaving public accounting after 2 years the right answer or is leaving public accounting after 3 years the most desirable?

There is no right answer to when you should leave the big 4 accounting firms. You just need to gauge it for yourself. That being said you should try to aim to stay at least 2 years so you can show that you can hold a job.

Not that you can’t get a job if you don’t stay for 2 years its just that you will have to explain less during your interviews if you can stay in public accounting for at least two years. Otherwise  you will be explaining why you left public so early. People will assume something is wrong with you or that you are create drama.

The longer you stay the more confidence people have in you because they know you can tolerate a lot of pain. That is why most people leave public accounting very rapidly. It’s because of all the personalities the lack of stable work environment, the number of hours you have to work, the fact that you have to drop whatever you are doing anytime your client needs something.

What are bad reasons for leaving public accounting?

There are reasons that people leave public accounting that I don’t believe are strong enough to warrant leaving. The first one of these is thinking that the grass is greener. This reason alone is not good enough to leave. There are many benefits to going to industry, but just thinking that it is better is not going to solve your problems. There are many clients out there that have terrible culture too. Sometimes they work as many hours as public and have worse cultures. Don’t think that industry is better just because it isn’t public.

Another bad reason for leaving is that your current group doesn’t challenge you enough. Again this reason alone is not a good enough reason for leaving public accounting. If you have a strong support system and great clients, then look for other ways to challenge yourself. Don’t just think it’s the partners’ jobs to challenge. Start coming up with creative ways to challenge yourself if you like everything else about your job.

Conclusion

In conclusion, there is no exact timeframe that you should be looking to leave public accounting, but you should try to stay at least 2 years to boost your resume. Additionally, you need to really develop a pros and cons list as to why you want to leave public accounting before leaving. There is a chance that you could leave and end up in a worse situation. If you like the people and work, don’t leave thinking that the grass is always greener in industry. You need to have strong reasons for leaving any job otherwise you might be seen as a job hopper.