My school offers a top-3 national accounting program. But is accounting really useful when you are working in i-bank, particularly in investment banking division? How about other divisions, like research? I know that major doesn't matter really much when you apply for a job, but if it can make a difference when you are working, why not. I'm just wondering how useful accounting knowledge is. If it's not that worthwhile, I'd rather switch my major to economics before it's too late.
Best Way to Prepare for Investment Banking in College
When you’re in college, it may seem like your entire career depends on choosing the right major. However, WSO community members offer the following helpful advice:
- Accounting knowledge – not necessarily the degree – is key for investment banking.
- Intermediate Accounting I and II are the most important/relevant accounting courses for IB. You don’t need tax/audit classes.
- If you major in Econ, make sure you have a good technical second major or minor.
- With a good GPA, top undergrad school and a lot of networking, you can get into IB with any major.
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for IBD accounting is key. Finance is easier to learn on the job (for me at least) I took a couple advanced acct classes my junior year and it has helped me a lot. Way ahead of my peers. You do not want to be learning accounting while pulling 100hr work weeks. also makes the training days easier.
accounting will be useful definitely... ER or IBD
Accounting is utterly key.
fyi..i did a accounting and economics double major with corp finn electives
Very interesting to know that accounting is very useful. Thanks for the replies. It's a little bit off, but if I could major in accounting and transfer to a school like Dartmouth, I guess I could be "something"?
its as useful as a third nipple on a african man
I am a bit confused, I keep hearing two different things here. On the one hand I hear "Only get an accounting degree if you want to be in accounting". Then, on the other hand I hear "accounting is totally useful if you want to be in IB and especially for ER" I would really like to know which one it is because I would like to break into ER and have been considering a few masters of accounting and master of finance degrees as well as the CFA route.
Hmmm, given that Wharton is #3 and you'd be studying finance if you went there, you really mean top two, right?
UIUC and UT-Austin both have well-respected Accy programs by the big four firms. Ironically, Wall Street respects the Big Four a great deal but not necessarily the schools that feed into them. If you land a big four internship, that can open up a few doors for IBD.
If it were me, I would be aiming for S&T rather than IBD. (Then again, I am biased). Therefore, my strategy would be to do a double-major in engineering, get recruited as a quant or trader by one of the Chicago prop shops or Houston trading firms, and get started there.
Regardless, it is going to be a difficult uphill climb. A lot of people who try to make it into IBD or S&T from Illinois or UT don't make it. But obviously, it's doable.
I know it's probably very early, but you need to start thinking about whether you want to spend much of the rest of your career as a trader or as a banker. Bankers are good at pulling in long hours. Traders are good at dealing with drama. If you like long-term money management, you really want to work for a mutual fund rather than an investment bank.
Last semester I did a two-day trading simulation, and I realized S&T is just not my thing. Yes, I'm considering majoring in accounting and breaking into IBD, but I'm actually more interested in management consulting, and that's probably my destination after MBA. Which brings me to the next point; I recently realized the value of liberal arts and would really like to pursue it. Something like B.A. Economics. So if I'm going to major in accounting, it's mostly because it's "the language of business."
My rough guess is that of students at Illinois and UT who want to do banking, only about 20% make it straight out of school. But there's a fairly strong likelihood you land at a Big Four firm with an accounting degree from either UT or Illinois. There's a fairly strong likelihood you land at IBM or Google if you study CS. There's a fairly strong likelihood you land at NASA or Lockheed if you study aerospace engineering. You simply don't have the same backup options out of econ on its own. And you'll have a much better second chance at banking via an MBA than if your econ degree doesn't land you anything.
This isn't to disparage econ degrees- there are a lot of brilliant people who study econ at non target schools and many land at the federal reserve or wall street. Just pointing out that the strong majority of engineering students at your school probably land at a firm on par with Google or Microsoft or at least a strong fortune 500 company, while the same is not necessarily true of econ.
UT and Illinois are both strong in Accy and Engineering. Those degrees- coupled with a GPA in the top 50% of your class and decent work experience- are as close a guarantee as you can get to having fairly interesting and well-paying white collar jobs as a backup plan. An econ degree by itself does not leave you with the same safety net.
If you are mathematically oriented, I really suggest an engineering discipline. It sets you up nicely for a financial engineering degree which can put you into structuring in IBD or portfolio research. 3.3+ Eng GPA + 800 Quant GRE + three strong rec letters = admit at most target school MS programs.
As Illini programmer has said, accounting is extremely helpful with IBD as a lot of the financial concepts stem from the underlying accounting backbone. Accounting will be about as helpful as a handjob on a honeymoon when it comes to trading (I was on a FO trading desk before I entered banking).
Accounting literacy is key, but the level of knowledge needed does not require an accounting degree. Accounting degrees (at least at my school) included many courses on tax and audit procedures that are not directly relevant to analyzing financial statements for investing purposes.
I would say accounting is one of THE most important aspects of banking. That said, I don't think anyone particularly gives a shit about a "top" accounting program. It doesn't really mean anything, atleast in banking.
having an accounting degree is not key, but understanding accounting concepts is key in investment banking, specifically the corp fin side. as kenny powers mentioned, you don't need to know every single rule in accounting, but your degree will certainly help as transactions can get quite complex with the myriad of ways to treat certain line items, tax issues, financial modeling in general, etc.
at the end of the day, you can get into banking with almost any major as long as you have other qualities people look for like a strong GPA and good experience - a lot of analysts I know are liberal arts majors. I will caveat this by saying that some interviewers may discount the accounting degree because they will think you really want to do accounting and thus are not that interested in their IBD process. On the other hand, for smaller boutique shops, they only look for finance and accounting backgrounds, so that can work to your advantage.
it's key, tax/audit classes aside. took 2 classes total in accounting helped having the base built up the corp fin skills on the job.
You need to take TWO accounting courses. They were called Intermediate Accounting 1&2 at the school I went to. I majored in finance but did a minor in accounting. In any type of financial analysis accounting is absolutely key. All the other accounting classes like audit/tax you don't need...
intermediate accounting I&II probably the two most important classes. Just buy the book and if you are disciplined enough you should not have a hard time learning the stuff...bless you soul.
do you guys think advcanced financial accounting is useful? i can either fit that class in my schedule or a financial institutions and markets course. which do you think would be more useful for banking, both with respect to recruiting and on the job?
accounting and corporate finance classes
I'm thinking the financial institutions has more to do with macro econ, money, and banking. correct me if I'm wrong.
As a career switcher who just finished my 1st year in MBA at a target school, I can tell you that accounting is extremely useful. But an undergrad degree in accounting alone doesn't help a lot to land a job in IB (I'm not saying it's totally useless) unless you're planning to pursue an MBA.
Like what others said, besides accounting courses, make sure you take business, econ, and finance courses and put them on resume. This will give you a better shot to land an interview or a job in IB. Trust me
Also, don't be discouraged. Oftentimes, it has to do with luck too.
Dude, accounting KNOWLEDGE is key, not the fucking DEGREE
Accounting Degree for IB? Changing degrees? (Originally Posted: 01/14/2015)
I recently was lucky enough to secure a BB spot in New York for this upcoming summer, and up to this point I've been pursuing a double major in Accounting/Finance--I'm at a well-known university with a strong accounting program and a weaker finance program, think BYU/Illinois/Georgia/MSU.
I'm close to finishing my accounting core curriculum, but I'll really be squeezing to fit my finance curriculum in and graduate on time. If I decide to do pure accounting and interview again for FT positions at the end of the summer, would I be fighting an uphill battle, even with solid internship experience? (As opposed to Accounting/Finance or pure finance)
On a related note, let's say I interviewed this fall with Accounting/Finance on my resume, secured an internship, receive a full-time offer, and accept it--but decide to drop Accounting or Finance--who is in charge of fact-checking your transcripts? Has anyone in this situation ever been directly asked about it?
Any opinion is welcome, thanks.
Just one data point, but I knew a guy who went to BYU who was only an accounting major that landed Lazard NYC internship and then went there full time. I would venture to guess that if you are on top of your stuff it wouldn't matter that you were just an accounting major.
"just an accounting major"
Lol. Not an accounting grad myself, but damn that's funny haha.
You won't hurt yourself in IB by just being accounting. I'd say Accy > Finance anyways. Also, why not plan to crush your internship and get an offer from there.
Accounting Degree for IB (Originally Posted: 07/16/2008)
I am going to start my junior year in the Fall and I am just looking for some feedback.
I will have a B.S.acc from a top accounting program at the end of my junior year with a 3.98 GPA and a 710 GMAT. For my senior year I am going to get a M.S.Finance in order to get into IB. I do not go to a target school but the MSF program has a great placement record with BB.
With how difficult the job environment on Wall Street has become, and will be for a good while, I have been looking into getting the required accounting hours to sit for the CPA exam, which I can use as a back-up in case I can't find a job in IB right away after graduation. Worst case scenario is that I work at the Big-4 for a year or 2 and try to get in from there or get an MBA.
I can structure my classes so that I will have enough accounting credits to sit for the CPA exam by the end of the fall semester of my senior year which I can take over winter break.
I am aware of the negative reputation accountants have but it seemed pointless to get an undergraduate degree in finance when I plan on getting a MSF which is fairly quantitative and in depth; the accounting degree would give me more flexibility.
So my question is this:
Will having an accounting degree + CPA hinder me in my IB job search or will no one view me in a negative light? Will IB interviewers view me as an unwanted candidate because I am a CPA?
If you have a Masters in Finance, I can't see a CPA designation hurting you in any way. Accounting is absolutely huge in banking, especially at the analyst level. I think back to my interview questions for SA positions, and without a doubt, the hardest ones were rooted in accounting. Just a quick question though. Why not go for the double major instead of doing a Masters?
Finance undergrads from my school (University of Florida) do not have much chance of doing IB right out of school. The MSF program is very competitive; the median GMAT for the incoming class is 700 with a 3.7 GPA. I will still only be in school for only 4 years so I am not really adding any time or significant ammount of money by doing the MSF.
I'm not expert on Florida's MSF program but I did check out there website a while back. I'm not putting the program down as it seems to be fairly solid. I do feel that the program overstates it's placement and elite status. There are now several MSF programs at mid tier schools like UF, Villinova Ect... The program could be the greatest thing in the world but you need to look at the overall reputation of the school. When choosing a grad school you should always look to upgrade to something better. Why the median GMAT and not the average? I believe the average is probably significantly lower. Take a detailed look at the placements and the job descriptions for the "BB" placements. Several are for PWM which is shit. And most of the firms are no names. Frankly, since the program takes "top students", these students would likely get the same placements regardless of the MSF. And for some odd reason almost all of the students went to UF undergrad. So to me the program includes a small group of the better students at UF. With your stats why not shoot for something better. On to the main question, no a CPA will not hurt your job hunt in any way and if you can complete the MSF in the same 4 years than I guess it wouldn't be horrible.
There's a kid from UFlorida in my BB analyst class doing IB, so it's hardly unheard of. Having the ability to go work for one of the Big 4 as a fallback is not a bad plan. Some of them like Deloitte even do a little bit of their own sell-side advisory. If you can get into that you can get a similar experience to banking, and most any job at a Big 4 doing accounting/corpfin/consulting looks pretty darn good on the resume.
Investment Banking and Accounting (Originally Posted: 11/01/2011)
I am in my 4th year of undergrad studying finance and accounting and have been very interested in investment analysis for years. From what I have experienced so far, my accounting classes have been much more helpful in learning how to better analyze potential investments. Because of this I am strongly considering pursuing a master of accounting (MSA) degree and taking the CPA (in addition to the CFA). I believe this will really help me be able to analyze a business from the inside out and understand everything that is going on.
Since coming up with this plan numerous peers and recent graduates have told me this is a bad idea. I have been told such things as, "it won't be relevant," and "it will isolate me as an accountant." I was wondering if anyone in the industry can give me their opinion on my potential plan and whether they think it is a good idea. Thanks alot,
Josh
Partially true, it's great to know your accounting very well. I don't know that a CPA is necessary. I would not pursue a masters in accounting either. A CPA couldn't hurt you however. There are plenty of CPAs in Investment Banking that's for sure.
IMO my higher level accounting courses haven't been very helpful as they've consisted of getting ready to take the CPA and memorizing random FAS crap
At a MM or boutique with little/no structured training program, the strong background in accounting and finance will only serve as a plus.
But I really wouldn't recommend a CPA unless you wanted to make a career in public accounting (or anything related to accounting, for that matter). Also, most states require 1-2 years of supervised work experience in audit/assurance to get the CPA license, so that may set you back if you're looking for a finance role/career.
It's an awful idea. Take it from a former auditor.
You need a certain level of accounting knowledge (i.e. university courses) to be able to perform well as an analyst. Under no circumstances should you waste your valuable time dissecting minutia in their financial reporting - or learning the ins-and-outs of the FASB handbook.
On the topic of designations and degrees:
Hope this helps.
Not a strong opinion either way, but it sounds like you are leaning more towards equity research type role rather than IB? If that is the case I think the CPA will be somewhat relative. I'd use the CPA / masters in accy as a backup plan and try to break straight into your desired field. Also, if you do decide to do your masters in accy you are going to have to take the CPA.
I did a masters in accy and passed the CPA, but a know a couple of kids who decided they would just not take the CPA after the masters program and get out of public accounting after a year or two. While that may be fine, it often comes up in interviews (i hear) and the inevitable question is asked - If you got your masters in accy and went to work for Big 4, why didn't you get your CPA? Isn't that what most people do? - It makes you look like a slacker who is either lazy or settled for a big 4 job b/c that was all that was available. Either way, it doesn't help your chances.
This question is bound to come up as there are a good number of former CPA's in IB & equity reserach and if you have an accounting backround and sit for an interview, there is good chance they will match you up with one of those senior people with an accy backround who will be wondering why it is you didn't take the CPA....
I am in the same situation. Accounting and Finance majors. I think those two majors are enough for IBD. Network, network and network and if you don't land FT or Internship, apply to a masters of finance program (just for the recruiting, so basically unecessary) and KEEP networking, cold calling, and send your resume to BB, MM and Boutiques.
i'm in the same situation as josh. having done equity research over summer, i can tell u that accouting was one of the most useful things to have...just like you said, i have noticed most younger employees in banking tend to think of accounting as irrelevant...however, all the senior folks(MDs etc) tend to value it alot. one thing to remember is that after you get a masters and a CPA, working in a big 4 is a must for the bank to value your accounting background...in fact one of the senior guys also told me that CPAs tend to be their star bankers which would make sense, given their strong foundation...
Read the bios of RICH and SUCCESSFUL people in the IB field.
Non have a CPA or a CFA.
Both are over-glorified crap !
Stick the the basics and you don' need so many paper credentials.
What you need is GOOD CONNECTIONS !
Reminds me of those indians and their 30+ three letter designations following their names.
hahahahahaha
Same here. If u want to get into IB, MSA is one year waste of time. Work experience look more impressive and give u more opportunity to build connection.
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