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I'm starting my masters in accounting in May. I'm not too experienced in accounting (my program had a cap on the number of accounting classes you could come in with at 9 hours). Before the end of my summer term I have to pick between audit and tax. My question is, how do they really differ on a day-to-day basis on the job? Are the promotion tracks similar? Chances to make partner the same or different?

I see audit as something that will always be around. I like it because it gives you the chance to observe a lot of different companies and figure out your niche. Tax codes may change, but everyone will always need an audit.

Tax? I don't know too much about it. I sat in on a corporate taxation course on my campus visit and the prof made it seem extremely interesting. But what are the odds of the tax code being changed extremely (flat tax/fair tax) and the specialization becoming fundamentally obsolete?

I'll most likely be in Charlotte or Raleigh after graduation, if that makes a difference.

Thanks for the input!

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Comments (18)

  • CuriousCharacter's picture

    I can't comment on audit vs. tax, but I can tell you that the chances of the tax code being changed to a flat/fair tax are effectively zero. Lawyers and accountants write the tax code, they aren't going to eliminate their own jobs.

    You'll never go broke helping the rich hide their money.

  • ProspectiveMonkey's picture

    yea, you're an idiot. choose tax if you like to look through legal codes all day and try to decipher what legislatures meant 80 years ago when they wrote it or do audit and basically ask if the numbers can be reasonably relied upon. The world is yours.

  • Sovjet's picture

    Audit is a much more gruelling experience - your hours in tax will be significantly better and you won't have to be on the road all week. Partner-track in audit is slightly easier, as there are more of them. That said, they're both extremely difficult - less than 1% of first-year auditors/tax guys would ever make it up (normally by self-selection).

    Tax can potentially be more lucrative than audit, especially in private practice or if you develop a speciality in something like M&A or cross-border taxation. However, realize that your exit opportunities will be severely limited in tax. Once tax, always tax - it's not a transferable skill.

    Audit (while bashed on this site) gives you a solid foundation in accounting, grunt work and client interaction (which the tax guys get much less of). It can give you the necessary background to get into corporate controller (leaving as a manager/senior manager) or even CFO (senior manager/partner). It can also be used to get into the hallowed halls of IBD or equity research (though it's an extremely difficult path).

  • obscenity's picture

    I'm starting a MAcc in August and picking tax. My primary reasons are less client interaction, no travel, and not having to potentially deal with fratty "I didn't make it into banking" types, which exist in audit. The last one obviously is something that not everyone will have an issue with, or may even enjoy, but I'd be worried about it in NC with plentiful UNC and sub-par Duke and UVA grads running around. The tax courses I took in undergrad were much more academically rigorous than my audit course, but that's not saying anything at all. The only appealing part of audit for me that I'm going to miss out on are the easy transition to Controller roles. If it weren't for that, tax would be a no-brainer for me.

    The hours, pay, and promotion paths are very similar. Odds of making partner are basically zero in either practice.

  • In reply to obscenity
    tedrd.88's picture

    obscenity:
    I'm starting a MAcc in August and picking tax. My primary reasons are less client interaction, no travel, and not having to potentially deal with fratty "I didn't make it into banking" types, which exist in audit. The last one obviously is something that not everyone will have an issue with, or may even enjoy, but I'd be worried about it in NC with plentiful UNC and sub-par Duke and UVA grads running around. The tax courses I took in undergrad were much more academically rigorous than my audit course, but that's not saying anything at all. The only appealing part of audit for me that I'm going to miss out on are the easy transition to Controller roles. If it weren't for that, tax would be a no-brainer for me.

    The hours, pay, and promotion paths are very similar. Odds of making partner are basically zero in either practice.

    Haha, I might fit under your last reason not to go audit. Never wanted to do banking but I was in a fraternity. Not stereotypically so, though.

    Thanks for the replies. I didn't really think the tax code would be changed, just ended up netflixing a documentary about the tax code and they all seem convinced change was on the horizon.

    I am looking for client interaction. I don't mind the hours, I'd rather be too busy than what I am now (teaching about 10 hours a week). My cousin started out with Price-Waterhouse before the Coopers merger and she had a great experience. Don't mind the travel now while I'm still reasonably young. It seems like many auditors leave to work for clients. I assume those roles have more standard hours/travel.

    Any chances of doing a few years at Big 4 audit-> top MBA-> management consulting?

    Thanks again for the input.

  • Sovjet's picture

    Top MBA will be very very tough as an auditor, but it depends on your experience and progression. The only successful attempts at a top program I've seen coming out of audit were at the manager+ level, where you can point to some real leadership experience. This will take 4-5 years to attain.

  • kjl's picture

    I agree that a Top MBA will be very very tough to get, but I've seen it done at levels below manager. You don't need to be a manager to get leadership experience; you'll get plenty of it as a senior. The tough part is standing out as an auditor compared to other candidates.

  • Cardinal's picture

    I wouldn't base your choice on your college classes. Public accounting is not at all the same as your classes were. Tax planning work sounds interesting in class, but the reality is that you will not be doing any of that work. You will be reviewing work done by a data entry firm in India to make sure your client doesn't have to pay taxes on his 2B fortune. Have you ever read the IRS Code?? If not then give it a glance before you think about doing tax.

    Audit (the one i picked) is mindless work. Best way to get through this is to not believe the firm BS about value added or client service. Just make the budget . Your clients hate you cause you are a cost to them and make them do more work. For a couple months out of the year you will hate your life because the pay doesn't justify busy season. However the rest of the year it is pretty easy and the pay is decent. Also the firms never fire people just show up and make your budgets.

  • Anglein's picture

    Interesting discussion. Quick question, a bit off topic. Can you work in audit at the big 4 with a finance degree?

  • In reply to Anglein
    Sovjet's picture

    Anglein:
    Interesting discussion. Quick question, a bit off topic. Can you work in audit at the big 4 with a finance degree?

    You need to have fulfilled your minimum courses for the CA/CPA. If you've done that with your finance degree, then yes.

  • wallstreet11's picture

    I'd go with tax because I find it more interesting. The tax code is always changing every year so that is something you always have to be on top of. I think, in the long run, tax accountants get paid more as well. You can get your LLM and become a tax laywer as well. Or you can set up your own CPA practice and do individual/small business tax.

  • Anglein's picture

    @Sovjet Thanks for the response.

  • tedrd.88's picture

    Thanks for the replies everyone. I appreciate it.

    My UG track would have been good for consulting/IB had I been at a target, but water under the bridge. Is it unrealistic/idealistic to expect audit to be a crash course in how business happens in the real world (not in textbooks)? I know my accounting courses will help me a lot no matter where I go in business, I just hate to see the top business school pigeon hole everyone into certain categories. Is a 720+ from audit simply not going to cut it as much as a 680+ from another more "valued" industry? I missed out on recruiting at my undergrad, but counted my losses and trying to position myself favorably and make some lemonade out of lemons. I definitely wouldn't mind audit -> CFO for a private company, but I really do have a thirst for success and being the best I can be.

    Is the prestige/hype all worth it, or will I be much happier if I just tune it all out now? My cousin did big-4 to private and has had a very comfortable life, especially given cost-of-living. Still though, websites like this really do cast a doubt over everything.

  • In reply to tedrd.88
    Cardinal's picture

    tedrd.88:
    Thanks for the replies everyone. I appreciate it.

    My UG track would have been good for consulting/IB had I been at a target, but water under the bridge. Is it unrealistic/idealistic to expect audit to be a crash course in how business happens in the real world (not in textbooks)? I know my accounting courses will help me a lot no matter where I go in business, I just hate to see the top business school pigeon hole everyone into certain categories. Is a 720+ from audit simply not going to cut it as much as a 680+ from another more "valued" industry? I missed out on recruiting at my undergrad, but counted my losses and trying to position myself favorably and make some lemonade out of lemons. I definitely wouldn't mind audit -> CFO for a private company, but I really do have a thirst for success and being the best I can be.

    Is the prestige/hype all worth it, or will I be much happier if I just tune it all out now? My cousin did big-4 to private and has had a very comfortable life, especially given cost-of-living. Still though, websites like this really do cast a doubt over everything.

    Big 4 audit for a few years to Industry is one of the most stable and secure ways to get into the upper middle class and live a nice lifestyle. Most of your clients will have armies of people who left the Big 4. They work 40-45hrs a week and pull in nice salaries. Its not rainmaker money, but you have time to enjoy your life.

  • In reply to tedrd.88
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