Big 4 Audit vs. Big 4 TS/TAS for CFO/Controller Position of Private Company

I'm a student in a top 20 undergraduate business school, quite interested in corporate finance. My family happens to have a small-medium size plastic manufacturing firm in the southeast which lacks a CFO(My family may want me to fill this slot one day). As of now, I'm not entirely sure if I want to commit myself to the business or if the business will still be around by the time I gain enough outside experience(5-7yrs). Even if I don't commit to the business, I could still see myself working in corporate finance/internal accounting.

I'm on track to double major in accounting and finance, and complimenting my undergrad degree with an MS in accounting.

What would be the best path to gain experience and set myself up for a career as a CFO/controller of a company, whether my family business or anothe firm? I have heard that a few years in audit at a big 4 firm is golden on the CFO/Controller Track. Would experience in Transaction Services or consulting be as valuable or more valuable?

 

Personally, I would say 2 years in audit and then 2/3 in TS role.

Though audit gets a somewhat deserving bad rap, the accounting experience which can be gained in 2 years at a Big 4 really does set you up with a solid accounting foundation. 2 or more busy seasons multiple areas of business, idiosyncrasies in different accounts, and exposure core accounting concepts.

Within TS, you can utilize this skillset to focus more on analysis. which would obviously be a requirement in the role you described. Another area of exposure in TS would be cost accounting as it would align with how you evaluate management's assumptions (this at least was an area I was never exposed to in audit).

TLDR: My opinion is there's value in starting a career in audit with a focus to transition early.

 
Best Response

I work in TS (2 years audit, 1 TS) and think TS is much more interesting and useful than audit. In audit, a lot of the work you do is mindless procedures/documentation of stuff that doesn't really add value to the company, but is required by various governing bodies. You'll do lots of tie-outs, confirmations, tick-marking of workpapers, etc. and very little diving into accounting guidance/principles until more senior levels. In TS, your job is still accounting, but you are looking at financial statements more analytically to figure out what could go wrong with a business once a PE firm/company looks to buy it (buy-side deals) or helping your client figure out where they could run into roadblocks when selling their company/additional sources of value to increase their selling price (sell-side deals). You also do deal with revenue recognition, etc. issues, so in my experience, you will also learn accounting.

That said,TS is very difficult to break into right out of school and most places will want you to do 2-3 years in audit before moving into TS anyway. If you are fortunate enough to get an offer right out of school, I personally would take that over audit (unless it's at a lower-tier firm). Audit, however much I hated it, does teach you some regulations and will certainly be more financial reporting-heavy than TS will, so it's not a complete waste of your time by any means. If your job as a controller for your parent's company will be more dealing with the reporting side, I think audit honestly could be a better fit because it's all about ensuring that financial statements are in-compliance with laws/regulations. If the controller description is more FP&A-oriented and dealing with financing, looking at in-organic ways of growing (i.e. deals), forecasting, etc., then TS is a better fit.

The safest option (and probably correct) is what the poster above me wrote: 2 years audit, then TS for a while longer. I think this is a good hybrid skill-set to have because you check off the financial reporting knowledge with B4 audit and can say you understand the transaction/analytical side of accounting by doing TS. Plus, this path won't preclude you from, and in fact will make you more competitive for, TS roles down the road. You can't really go wrong either way IMO.

 

To preface, I went audit -> TS -> Corp Dev. With that being said, I would 100% recommend going straight into TS if you have the option. You will learn all the technical accounting detail with a lot more relevant business analysis that will be needed after you make the transition out of Big 4. Additionally, you will have experiences in a variety of industries and a leg up on your peers that are in audit. Happy to elaborate more if needed.

 

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