I am starting of my career graduating from a non-target school with two different options and could really use some advice. One option is from a Fortune 100 tech company as a financial analyst role, and from reading the description it looks exactly like an FP&A role (P&L forecasting, business reports, revenue and expense analysis, variance analysis, etc...) and the other is a Big 4 audit position. I am wondering if anyone has experience in this sort of financial analyst role. Is it a glorified title where I will actually be doing mindless accounting support work? Which of the two would be better for setting me up in the future for a career leading to a C-suite executive? I understand these positions are not prestigious like IB or consulting, but these are the offers I have now and any help would be great!
I also want to point out that I am planning on getting my MBA after 2-3 years in either one of these positions most likely from a top 20 business school. Just in case sways your answer one way or the other.
Big 4 Audit--> Switch to TAS--> Go do your MBA
Thank for the advice. I hadn't considered TAS too much because in the city I live in, the Big 4 office has a relatively small TAS branch. I guess it could be beneficial to move to a nearby larger city with a TAS team that would get me more exposure.
BIWS has a series on day in the life of FP&A ... take a read
I would take the FP&A role unless you're 100% sure you enjoy accounting/ possibly want an accounting career in the future
And that's one of the issues. I have seen former big 4 auditors move into f500 executive level roles, even CFO of smaller companies, but there are also many that I see going into the controller side and being stuck there which is why I am considering getting my CPA at the big 4 firm for free with a small bonus, then getting an MBA to hopefully shift career paths a bit to more corporate strategy or possibly consulting. Feel free to point out any flaws in what I am saying, as I said I have very little experience, that's just what I have gathered from others.
Current Big 4 here, and gave strong consideration to the MBA path. Personally don't see any huge flaws in your plan, but you really need to think about the longterm goal before committing to that. It's a hefty price tag. I personally haven't seen too many CFOs that come from corp strat/consulting. A lot of them have Big 4 backgrounds, but you don't really see people going straight from Big 4 to CFO roles. Big 4 teaches you how to audit what's already been done, and because of that, there's little value you can truly add (don't care what kool aid the managers/partners try to force feed you). FP&A at least gives you deeper insight into how the company really makes/spends money and the key drivers behind the business, and for that reason I'd probably say go for the financial analyst position.
Do the FP&A gig. You'll get paid more, work normal hours, and deal with less BS than you will in B4 audit. I once had the choice of doing a rotation program at a F500 and audit. I chose audit and still regret it. It worked out fine, because I'm now in TAS and do more interesting work. That said, unless you have a goal of doing IB/PE, Audit => TAS is a roundabout way to break into the interesting corporate finance jobs IMO, which is what I wanted to do anyway. Even if you want to do IB/PE, it's not easy getting in from TAS because there's plenty of MBB/IB people to choose from for MM PE jobs.
I would say do the corporate finance gig, outshine your colleagues by working more/asking for more challenging work (you'll actually be appreciated for requesting this as opposed to the B4 where working 50+ is normal), and make sure you network with people at your company to see if you can do strategic finance/corporate development down the road.
offer advice big4 or f50 financial analyst (Originally Posted: 11/16/2012)
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THD
I say Big 4 audit because you will develop a more well-rounded skill set where you would be auditing multiple companies and learning about one industry or possibly even several (I have friends who have been assigned to a specific industry as well as a more generalist role).
F500 financial analyst roles are certainly great jobs with an excellent work/life balance, but as you mentioned they are much more similar to managerial accounting than the more finance/financial analysis work you mention that you enjoy. Now of course I'm generalizing here but from the people who I know in these positions (at least half a dozen) the work is much more accounting oriented.
You seem to have a good idea of what you are interested in and I agree that corporate banking would be perfect given your interests. I think it would be easier to transition into corporate banking from audit than from a F500 gig but I don't know anyone who has done either specifically so I can't say for sure
Home Depot without a doubt. I'm former big 4 and I 100% guarantee you that you will not be doing any of the activities you enjoy in audit. People work for 2-3 years at Big 4 before they can even attempt a jump to a financial analyst role at a public company. You don't do financial analysis at Big 4 audit, you tie and tick cash payments to invoices. Go straight into finance.
From my understanding, I will not enjoy the work at either of these positions as much as my ideal job (corporate banking) as I won't really be doing any financial statement analysis. So in the end it will really come down to which one will have the better exit opportunities for breaking into corporate/commercial banking, getting into an MBA program so I can break into CB from there, or moving up the ranks in F500 to Director/VP level. As a background, I will be graduating from Emory Goizueta with about a 3.8 (top 10% or so of my class) so should hopefully have the stats for a top MBA.
For your reference, my background is F20 Corporate FP&A.
You seem to be pretty open to positions, so long as they are analytical and thought provoking in nature. That's good. When you access this THD position, I think you need to find out more precisely what area of "corporate finance" you will be in. Being in corporate finance could mean anything from tracking accounts payable, to investment management, to IR, to strategic capital management... Maybe they won't tell you, maybe you will be put where ever there is a need. It would be nice if you could find out though, you might not want to spend a year of your life in operational reporting or internal audit (again possibly under the umbrella of "corporate finance"). Many of these corporate finance development programs are grab bags, you may get in a great group that leads you to the door step of high-profile areas like corp M&A/strategy, or you may end up in a group that gets shut down the next year. Such is life.
I don't have any experience in Big 4, but I do know that many Big 4 employees jump ship to work in FP&A of a corp. They often cite something like "I work much less hours in FP&A and get paid nearly the same." A nice thing about Big 4 is that it will give you a wide range of experience in a short amount of time, and getting out of Big 4 audit you can probably be more picky with the area of corporate finance you exit into. Regarding, corp M&A and strategy, those positions are usually filled by internal candidates (often from FP&A groups) or management consulting or I-banking external candidates.
All in all, you should really choose what you WANT to do the most. Basing your decision on some vague idea that one will get you into a top MBA is silly IMO; pairing a 3.8 GPA from Emory, a high GMAT, and solid corp fin or Big 4 experience should be enough for a top MBA. I think you if you know you like THD and want to grow a career there go with that, if you are not sure and maybe want to get into another industry a couple years from now (like corp. banking) go with Big 4.
Home Depot
Source: Big 4 Schmuck
From my experience in Big 4 advisory I would never do auditing. Lifestyle sucks especially in the busy season and in the other times you're still in the office at least 40 hours "chargable" plus lunch. The people are not as smart as in other places and the work itself is really boring for most parts (TICK TICK Excel).
For the first two years you don't really learn anything related to financial analysis as you're just checking that stuff matches invoices etc. Also the main point is that you're acting always after things have happened so you're never able to act proactively or change anything.
Would Home Depot do a better job of placing me into a top 10-15 MBA program? I realize that it is an uphill battle for MBA business schools">M7 but going to a school like UVA would set me up nicely in the southeast since I have no interest in moving back north.
i think an MBA from emory would be worth more in the southeast than from UVA
OP, I guess your decision depends on how you want your resume to look down the road. Big 4 accounting may suck, but one thing to consider is that you pretty much have only one opportunity to get a decent grounding in accounting, right out of undergrad.
I was in a similar position out of school and I went w Big 4 Audit (and I'm someone who hates accounting, Debits/Credits and audit). My thought process was that while I wanted to work in straight finance, I also didn't want to spend my finance career confused by simple accounting stuff do to limited early exposure. You can very easily move from Big 4 to FP&A and if you make that move at the senior associate level you can possibly land a more analytical revenue forecasting gig since you will be beyond the analyst level. And it is a bit comforting to know that you can still be in the running for CFO type gigs down the road, absent the public accounting experience that's not a realistic end state. Another consideration is industry. If you land yourself in the right audit industry (Tech/Pharma) future opportunities in that industry will be solid. Nothing against HD, but retail seems far less interesting, FP&A there could be a massive amount of inventory analysis over screws and nails. OP mentioned cost analysis at HD. That type of work coupled w month end close might be only marginally better than audit.
For reference, I did Big 4 audit for 2 years, then moved over to Transaction Services for a year. From here forecasting and analytical FP&A jobs are pretty easy to land. Investment banking/Equity Research are also in range with an MBA.
For what it's worth, I read a HBS profile a few years ago for a guy that was a HD analyst, and rest of his story wasn't very impressive, so indication is that top MBA programs are still a possibility. Not sure the same could be said of big 4 audit but I do believe TS/TAS provides better exit ops to both industry and MBA when compared to FP&A. Big 4 pay is horrible aside from partner, so if you go that route you have to be willing to deal w it.
avoid audit. you learn zero in the way of applicable skills. you can get your cpa through the fdlp and have broader exposure and opportunities outside of accounting. the only benefit to big4 is exposure to multiple industries, but if you don't need to see banks or insurance companies, etc to know you're not interested in those industries there's not much benefit.
you'll have more opportunity to build a network internally and pursue the more interesting opportunities within the company (corp dev, strategy, etc) if you can make the right connections internally. you'll never have those options transferring into an org from big4.
my long term goal is to make a billion fafillion dollars.
The positions are:
-FP&A -Merchandising Finance (analytic on capital expenditures, work with vendors on rebates) -Supply Chain Finance (manage logistics/DC expenses, inventory level optimization) -U.S. Stores Finance (support District managers, store PNL, expense optimization) -Marketing Finance (manage company wide marketing spend, campaign analytics) -HD.com Finance (Forecasting margin, support growth initiatives)
If you have a 3.8 why not get a top MSF and do IB?
I'm non-traditional and had some time off in between school so at this point I am really wanting to start working rather than continuing to be a full time student. The other issue I am not sure how more helpful MSF would be for me than Emory OCR, its not like I attend an extreme non-target. The issue is overall FT hiring has not been good this year and most FT banking offers were given to summer interns. The other issue is I would really like to stay in the southeast.
Seriously FP&A blows.
Sincerely,
An FP&A Analyst
Can't be any worse than big 4 though...at the very least you are working better hours and not having to travel. you also dont have to count inventory
Big 4 vs Financial Analyst Position at F100 (Originally Posted: 01/23/2013)
Hi all,
I was wondering what peoples' thoughts were on whether one should take Big 4 or a financial analyst/rotation program at a F100 company if one's goals are to eventually end up in finance regardless.
Although I don't have offers at either yet (will be starting my masters this year), I know for sure that I eventually want to end up in a more finance-oriented role because that's where most of the decision-making lies. I enjoy accounting, but I want to be in a role where I'm using my accounting knowledge to influence decisions at a firm rather than just creating reports and complying to regulations, which is what most of the accountants at my job seem to do.
However, having worked in corporate finance, I also know that there's less learning opportunity here, the month-to-month work is very standard and you get stuck in a rut pretty quickly doing the same thing in monthly or half-yearly cycles.
Therefore, since I'll probably be coming across this dilemma in the near future, I was wondering what your thoughts were on the pros and cons of each. My list (feel free to edit):
Big 4: + More variety of work and greater learning experience + Client-facing role, which has lots of carry over to other service careers + Guarantee of CPA eligibility and greater help to pass exam - Awful hours, relatively low pay with no stock options - Potentially branded as an accountant forever - No guarantee of jumping to IBD/Transaction Adv if desired
F100: + Won't be just accounting/compliance work + Much better lifestyle and pay initially - Can be stuck in your role and have trouble moving up without advanced credentials - Might not be as easy to get your CPA
If anyone else has thoughts on this, I'd appreciate it.
Thanks!
Maybe you can try to get a job at BIG 4 doing TSA? Few years later you can go into investment banking. You can also get a CPA or even CFA.
While it is fairly accurate to lump all Big 4 into one bucket, the same cannot be said for F500 FLDPs/FAs. At F500, you could be a glorified accounting clerk, or you could be doing serious strategic analysis.
I would also add to your considerations above that Big 4 will give you a much better network, which is a very valuable asset to build up early in your career. Most of your coworkers will go on to become finance managers/directors/VPs/CFOs, and you will also develop relationships with hundreds of client personnel, probably across a variety of industries. At a F500 your network will be mostly confined to one company, and most of those people will not be on the fast track and so as contacts will probably not be as valuable to you later on in life.
My bottom line would be to ask about your goals - there are plenty of situations where I would advise F500 over Big 4. However, in general, unless you are getting into a renowned FDLP program like GE, J&J, etc., Big 4 is the hands down winner.
^That makes a ton of sense. There definitely is a wide variety of FLDPs and even within FLDPs, you could luck out and get placed into corp dev rotations or get stuck in corporate accounting and only be doing month-end closes and ad-hoc projects.
Maybe we can compare typical tasks/skill-sets from each other then? I honestly don't fully understand what Big 4 auditors do typically.Obviously, they verify accounts (usually one particular one account if working on a huge multinational), but what does it mean to audit a company? That's something I honestly don't fully understand. For example, in FP&A, you would do some NPV/IRR analysis in order to analyze projects or be creating reports/memos for ad-hoc projects, so the job duties seem clear to me, but I don't think I fully understand what auditors do and why those skills carry over to corporate FP&A and CFO duties so well. If anyone has info on that, I'd really appreciate it.
The purpose of an audit is to provide reasonable assurance that an company's financials are free from material misstatement. The three general steps are as follows:
(1) Scoping. Sometimes, entire financial statement line items aren't material. So, the first thing you do is to calculate a level of materiality based on some metric - revenue, assets, etc., depending on the type of business. You will then use that materiality level (e.g. $100MM) to calculate what line items (or parts of line items) you need to test.
(2) Test the company's controls. For public issuers, you have to state an opinion on a company's controls as well as its numbers. To test the controls, you walk through all of the company's important processes and make sure that those processes are working by talking to people and reviewing the trail of documents that those processes leave behind.
(3) Test the company's numbers. This may can consist of tracing transactions to source documents (e.g. testing revenue by picking one sale and obtaining the purchase order, invoice, bill of lading, and cash receipt resulting from that sales process). Alternatively, you may perform an analytic instead - this is basically the auditor's equivalent of financial modeling. You construct a model to predict what you think the end balance or activity of an account should have been, then compare that prediction to the actual to see if there is anything unusual going on. For example, you might test a net pension liability by building a model that factors in average pay increases, market returns, etc.
These are very general explanations, and not necessary correct in a technical sense, but it gives you a general idea. The key to your question is this: in order to audit a financial statement line item, so have to first have a very detailed and thorough understanding of what happens in that account. You might think that revenue is a simple concept (you give someone a product, they give you money), but you don't realize that the company operates under contract terms with embedded derivatives that were cancelled by force majeure 7/16 of the way through the year, or that the joint venture LLP subsidiary splits its revenues by a different percentage based on the shares of each limited partner in their respective geographical region... you get the point. A detailed understanding of the operation of a business and the relationship between financial statement accounts is the result of audit experience.
Add to that detailed comprehension of all the financial statement line items from a variety of industries: a universally recognized and respected name, on the job training which always ranks higher than any investment bank or management consulting firm, a work ethic built by long busy season hours, excellent project management skills, and a network formed by working alongside very bright people every day. Hopefully that makes it easier to understand why Big 4 people are so popular with FP&A groups, and why the Big 4 generally trump an FLDP/FA opportunity.
Awesome post! Well deserving of my last silver banana! I got one more question. Is accounting work purely retrospective in scope or is there a some forward looking analysis? For me, my issue is that I know that I hate "public markets" and I'm not really cut out for the hours and culture of i-banking, but I really like some of the financial modeling/technical work they do and want to do something where I'm modeling future investments (not in securities but rather what projects to undertake, whether to expand into a new market. what equipment should be replaced/facilities should be expanded, etc.) and determining their impact.
I know FP&A deals a lot with the type of work I'm describing, but it seems like having a CPA is a virtual requirement to get anywhere and an MBA helps as well. That's why I'm pursuing my maters in accounting, and I don't even hate accounting. I just dislike being the person who creates reports but never gets to do much analysis or gains much understanding of how a business works. Based on what you wrote, the only thing that seemed like it required a lot of knowledge about understanding a business model and then creating an analytical framework for it was testing, but even within that, the work could also be just finding original documents and then verifying/entering the information into databases. I do a lot of that right now in my current job and I know I hate it.
I really wnat to do something where I can understand how a business work and help aid in the decision-making processes, which would involve more forward-looking analysis. Could public accounting still be a good fit for someone with this goal, or would i mostly need to look at the Big 4 stint as a means to an end?
THanks for all your help!
Honestly, almost all audit work is retrospective. Everyone in audit feels the same way you do, but they are sticking it out for a while because they know the experience and knowledge they gain will put them leagues beyond their peers who started in industry with no public accounting experience. The first couple years you are going to have to pay your dues, but it gets better eventually.
I would just warn you that FP&A will probably not be what you're imagining. Most if not all entry-level positions are just creating the financial documents (AP reconciliations and other boring stuff) that the auditors review, which is even more boring. If you're the auditor at least you're already reviewing, not compiling the data yourself.
You, like pretty much every other ambitious accounting major, chose accounting because it will teach you how a business communicates and how a business is run. You want to be on the strategy side of things, but so does everyone else, so you're going to have to fight for it. The best and fastest way to get there is usually Big 4. You have to grind it out for a couple years, but those years give you the experience and talents you will need to get to where you want to be.
Well, to be honest, accounting wasn't my first choice major. I did my undergrad in finance but I realized a couple of things:
Accounting knowledge is very useful for corporate stuff (honestly, my finance classes were only useful if I wanted to do trading/asset management. Very useless for corporate finance)
To get the sexy jobs in industry, I'd either have be an ivy league rockstar who kicked butt in i-banking/consulting (which I'm not) or would need a CPA and some experience at the big 4 and transition from FP&A => corp dev/strategic finance roles (longer road, but not everyone can be that ivy league rock star sadly)
It's not like I hate accounting, and i actually found a lot of my intermediate financial accounting class interesting, but I felt that a masters in accounting versus finance would give me a good risk:reward ratio in terms of giving me a wider pool of jobs to apply to and building skills (a masters in finance would pretty much be more of the same as undergrad and wouldn't help me re-brand for a more prestigious job unless I got into Princeton/MIT/CMC, etc.). That, plus the fact that I got into a top-tier public for my masters, which will give me a better network to draw from, made it the best option I had. I'm just trying to make sure that having a CPA background won't preclude me from the strategic finance type of jobs I would want in the future, even if I don't supplement it with an MBA. I've only met 1 person who did corp dev from an accounting background (no MBA either), but I'm wondering if that's more a function of it being a tough field to break into than a function of it being a field that accountants can't really break into.
You're definitely right about FP&A not being any more interesting at the entry-level, however, when you say that "FP&A will probably not be what [I'm] imagining", did you mean from an entry-level perspective or is that true even at the upper-levels? I figured that an FP&A manager, CFO of a division/region, VP of Finance, etc. would have a fair amount big-picture work and would hand some of the uninteresting stuff to the underlings, but am I mistaken?
The masters in accounting will make you a great candidate for Big 4, assuming your grades are high and you have some extracurriculars and internships. Your end goals are definitely achievable from that starting point. Corp dev roles are usually filled by IB/management consulting types just because of the nature of the work, but people frequently go from accounting to upper FP&A to strategy roles. One of my friends actually moved from VP Finance to VP of Strategy just last month. He had 7 years' experience in Big 4.
You are correct about FP&A at the higher levels. It's the first couple levels that do most of the grunt work, so if you can skip those levels by sticking it out in Big 4, that would be ideal.
Alright great. That's definitely a huge load off of my shoulders. Everyone on here is so negative about the Big 4/Accounting that I was literally beginning to stress about ever getting into a position I want. I know the Big 4 isn't as glamorous as high finance, but for relatively simple-minded folk like me who are type A enough to want a solid job that pays well (to me "well" is at least 6 figs, but hopefully in the higher 1XX,XXX range as I get more experience) with enough time to enjoy life/not be stuck in NYC, it really doesn't seem like that bad of a gig to start out at. Although restructuring/turnaround stuff sounds kind of cool, PE/HFs just aren't really my kind of bad because of how bad the hours are (plus I'd basically be forced to live in NYC or other overpriced metro), so I wonder if people are mostly down on the Big 4 because they're mostly interested in the high finance stuff.
Thanks for your help and I'll definitely focus on the Big 4 for the next few months. My school places 75-80% of the class in a big 4 firm and around 3% or so go to TAS, so hopefully audit at the very least ends up working out.
I guess one last question: do you know if it would hurt to apply to both TAS and Audit jobs or would that get me dinged from both? As I mentioned, my school does place into TAS and I have an interest in their restructuring group potentially, but I don't want to jeopardize striking out in a solid starting point like audit because I went for the lower percentage grand slam. I did that with i-banking in undergrad where I went all out for that versus applying to corp fin jobs/majoring in accounting and keeping the big 4 door open and got burned badly and I don't want to repeat that mistake.
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