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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