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Best route to Transaction advisory?
 

jossRock's picture
(Chimp, 4
 
Points)
 on 8/17/12 at 5:00am
route to transaction.jpg

Hi all,

First post here. I am currently in audit at one of the Big 4 and am interested in eventually transitioning to transaction advisory services, specifically accounting due diligence for M&A and perhaps later, some valuation work. What is the recommended path to doing so?

- How many years should I put in audit?
- What are some of the relevant skills from audit that I can use in due dilligence, besides being familiar with the financial statements?
- Do I have to have top ratings? What if instead of 1's, I'm getting 2's - is that sufficient?
- What is the process of making the switch? i.e., what bureaucratic things do I need to worry about?
- Is it generally easy to make a switch within the firm, or is the swtiching firms completely path more common?
- Can anyone who has made this switch comment on their experience?

Thank you for your input!

World Banker's picture

Network, Network, Network.

(Monkey, 52
 
Points)
 on 7/30/12 at 11:05am

Network, Network, Network.

Network from within the firm. Meet people who currently work in transaction advisory services and express interest. With that being said, I don't think there needs to be a timeline in place for the switch from audit to transaction advisory; but rather just continue to work hard and show dedication to the firm. I know people who have made the switch from Big 4 audit to a corporate development role at F500 companies so a switch is definitely possible.

valuationGURU's picture

Wait until you are a senior

CF
 
Points)
 on 7/30/12 at 11:32am

Wait until you are a senior associate on the audit staff. You have to be the best in your group to make that switch typically.

See my other WSO blog posts

MistaBooks's picture

^^ agreed. You def. need to

(Orangutan, 294
 
Points)
 on 7/30/12 at 11:33am

^^ agreed. You def. need to network with the people in the group. I am in a similar situtation with a Big 4 firm in one of the major markets.

I have been in audit for 10.5 months and expressed interest in switching right when I joined the firm - I told the HR lady and had a conversation with my coach about it. I eventually (about 5 months into my job) networked with an audit partner who was high up and expressed my interest and they put me in contact with the partner in charge of the TAS group I wanted to join. I met with them late November got the rundown, etc. I was told to get a high ranking and come back. I did that and met with partner again and reached out to one of the younger associates and ended up going to coffee with the group.

I am about to do a rotation into the group and hope to join them soon after. I was told that generally you need to be a senior before the switch and they really pushed back on me (do a couple more years of audit), but I was VERY persistent (probably annoyed the hell out of that partner).

At my firm you generally do a rotation for 1-2 months around September, then if they like you you'll have to go back and do one more busy season and then they will pull you in full time.

Hope this helps

In reply to valuationGURU
UFOinsider's picture

valuationGURU: Wait until you

O
(Human, 10,465
 
Points)
 on 7/30/12 at 11:44am
valuationGURU:

Wait until you are a senior associate on the audit staff. You have to be the best in your group to make that switch typically.

If you're staying in TAS, then do this. If you're going to TAS as a pivot point to IBD, start networking immediately. If you spend too long in big4, it gets harder and harder to move to a bank

I just had my first UFO experience.

I called my wife fat while we were making dinner.

Flying saucers everywhere XD

In reply to UFOinsider
valuationGURU's picture

UFOinsider: valuationGURU:

CF
 
Points)
 on 7/30/12 at 12:02pm
UFOinsider:
valuationGURU:

Wait until you are a senior associate on the audit staff. You have to be the best in your group to make that switch typically.

If you're staying in TAS, then do this. If you're going to TAS as a pivot point to IBD, start networking immediately. If you spend too long in big4, it gets harder and harder to move to a bank

Agreed. You become pigeonholed for sure.

See my other WSO blog posts

In reply to MistaBooks
jossRock's picture

Interesting! I didn't know

(Chimp, 4
 
Points)
 on 7/30/12 at 12:21pm

Interesting! I didn't know rotation opportunities were available. I know that at my firm, they won't even consider you until you're a senior.

I actually WANT to stay in audit for a few years. I think that it's a good foundation to get experience with the F/S and accounting matters.

Are you in a big market or middle-sized? I'm in a middle market and I'm open to the possibility that I would have to move if I make the switch.

edit: This is in response to MistaBooks

In reply to UFOinsider
jossRock's picture

Not really interested in

(Chimp, 4
 
Points)
 on 7/30/12 at 12:21pm

Not really interested in going the investment banking route, but I'll "never say never." I think a lifelong career can be made in advisory as long as the work is interesting and challenging.Thank you for input!

edit: In response to UFOinsider

bud_fox1933's picture

jessRock, I agree with

CO
(Monkey, 61
 
Points)
 on 7/30/12 at 1:40pm

jessRock, I agree with everything that has been posted if you would like to go into due diligence. If you are looking to go into valuation advisory it may be a different process. Coming from audit you will need to show them that you are quantitative (i.e., a finance degree or CFA level 1 completed) and have some exposure to transactions on the audit side. Also, if you are going into valuation you will typically be demoted one level (i.e., Senior>Exp Assoc or Exp Assoc>New Assoc), so the earlier the better as audit experience will not really help you in valuation. Valuation and due diligence are very different. Neither is better than the other but they do very different work. Due diligence is a lot of accounting and requires an accounting background. Valuation is very quantitative (i.e., a lot of modeling using income/market approaches) and requires a finance degree . Try to have an informal conversation with senior from both of the groups to see which one you would get the most rewarding experience.

"I never said that you are not good at what you do...it's just that what you do is not worth doing!"

Maherj1's picture

Hey, I made the move from

O
(Baboon, 170
 
Points)
 on 8/17/12 at 7:27am

Hey,

I made the move from audit to TAS (Restructuring / Valuations) albeit with a different firm.

As a caveat this is from a European perspective.

I started in Audit at a Big 4 firm a few years back. I actually quite enjoyed it for the first year believe it or not. I was learning a shit load and aspects of the work were actually quite interesting. After about a year it got to the stage where I was doing the same thing over and over again and I just felt like I was'nt progressing personally or professionaly.

I always wanted to work on the transactions side and I floated this idea to my manager. I was pretty much fobbed off...told it could happen some day but not now. I had got good reviews, was one of the few people to get my exams that year and was extremely enthusiastic but it got me nowhere...I was a bit surprised by this but it was a wake up call...welcome to the real world.

Anyway I started to get quite demotivated in my job...I literally hated every second there and my work was surffering which was making things worse for me. I could'nt take it any more and decided to start applying elsewhere. As luck would have it another big 4 firm was hiring in the TAS department and I got an interview and landed the job.

I suppose the key points Id take from the experience are:

* In Europe we have three year training conracts. For the first three years it is nigh on impossible to make a move from audit to TAS whithin the same firm. I have never heard of this happening. Once qualified (i.e. after three years) lots of people make the move from Audit to TAS but it can be competitive as they tend to be smaller departments and obviously a fair few people want in.

* In Europe networking was of little help. I had a very close friend in the TS department of my first firm but it made no difference. Hiring is very structured here and you either go in as a grad (very small number) or wait until qualify.

* The reason why I did nt want to wait until I qualified to make the move is because I see this as a stepping stone. I did not want to do three years of audit, two in TAS and then start looking form a job...I wanted to do my three years qualify with TAS experience and try to get something in finance.

*I have seen people move to TS (read due diligence) after spending 5+ years in audit. The skillset between TS and audit is quite similiar. I know one person who has gone from audit to valuations after their three years. The CFA is a massive help for valuations both for breaking in but especially for the actual work.

* the big 4 tends to have more exit ops in Europe...during the good times Big 4 to PE was very doable and the qualification (aca) tends to be regarded quite highly over here where as I get the impression the CPA in America is not seen as very worthwhile to finance. This also means it does not hurt to spend a bit more time in Big 4 here...good exit ops are still possible after 5 years in big 4 here where as in the US it seems to be a case of get out while you can.

*If I was in the US in Big 4 and could'nt get a job in finance in US I have no doubt about my strategy. I would get a transfer to Europe in a TAS department and try and get a finance job from there.

All this is based on my experience and impressions of things....I am still far from an expert. I realise the above is a bit scattergun but if anybody has any specific questions Id be happy to answer.

caesar1's picture

Don't have time to read the

(Chimp, 9
 
Points)
 on 8/17/12 at 10:59am

Don't have time to read the other comments but here's what I did:
- interned in audit at one of the big4
- as soon as my trial period ended I started networking with transaction people
- arranged a one week placement in transactions instead of an audit project
- worked hard this one week and people there liked me
- expressed interest to move, since after this week I knew everybody in there it was easy to arrange the interview
- within week I was promised the transfer by partner

The transition is really worth it, audit is dead end if you want to do finance/IB/M&A/PE. I stayed in the transactions (was doing valuation and financial modelling) for one year and made a move to private equity where I am now. I would have absolutely zero chance of going to PE from audit.

Hope this helps

QC's picture

Is it possible to break into

 
Points)
 on 8/17/12 at 12:43pm

Is it possible to break into TAS directly from undergrad? I'm pertaining to Big 4 in Canada specifically.

Also, if anyone knows, can I earn my CA/CPA that way or will I have to do Audit hours on the side?

TDSWIM's picture

jossRock: Hi all, First post

(Orangutan, 325
 
Points)
 on 8/17/12 at 1:00pm
jossRock:

Hi all,

First post here. I am currently in audit at one of the Big 4 and am interested in eventually transitioning to transaction advisory services, specifically accounting due diligence for M&A and perhaps later, some valuation work. What is the recommended path to doing so?

- How many years should I put in audit?
- What are some of the relevant skills from audit that I can use in due dilligence, besides being familiar with the financial statements?
- Do I have to have top ratings? What if instead of 1's, I'm getting 2's - is that sufficient?
- What is the process of making the switch? i.e., what bureaucratic things do I need to worry about?
- Is it generally easy to make a switch within the firm, or is the swtiching firms completely path more common?
- Can anyone who has made this switch comment on their experience?

Thank you for your input!

I haven't done this, but I have several friends that both went into big 4 advisory right out of school and some who went into audit or tax and then wanted to transfer into ts, tas, advisory, etc, and here is what I know. Anyone who has actually done this, feel free to correct me so I'm not spreading any misinformation.

You should put as little time as possible in audit. Some firms will want you to do at least one year sometimes several before switching you over. Firms these days are starting out people right in transaction services or tas or whatever you want to call it. Why should you have to wait?

Firms that move you around internally want you to have top ratings before they will consider you for a switch. 2s should be fine I would think if you network. If this is so they get "the best" or just to string you along and get better work out of you while you're in audit because they know you want to impress and make a switch, I'm not sure.

Bureaucratically, if you're performing well, why would anyone want you to move to another group? (I mean, just from a self serving perspective...) If you have a trusted advisor within the firm this may be different. It's generally not that easy to make a switch after you have already been hired.

My advice to you is try your hardest to switch within your current firm if possible, and be aggressive. If that fails, start networking with those in your preferred groups at other firms and just move firms. It will probably be easier to move firms than get moved from within. You might even get a raise.

In reply to QC
bud_fox1933's picture

QC: Is it possible to break

CO
(Monkey, 61
 
Points)
 on 9/20/12 at 4:15pm
QC:

Is it possible to break into TAS directly from undergrad? I'm pertaining to Big 4 in Canada specifically.

Also, if anyone knows, can I earn my CA/CPA that way or will I have to do Audit hours on the side?

In the US you can go directly from undergrad. It is a separate recruiting team and more selective than audit. Not 100% sure but I believe you can earn your CPA in due diligence, not in valuation (or perhaps it depends on the state you sit for the exam). I think you need to have a certain number of hours of audit-type work to get a license. However, if you want to go into finance (IBD/PE) a CPA will add little to no value and may even pigeonhole you. I would focus on killing the GMAT or spend your time networking. People I know that made the jump from TAS (Valuation) to IBD or buy-side were not CPAs. Good luck!

"I never said that you are not good at what you do...it's just that what you do is not worth doing!"

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