2.5 years in Big Four audit: Ask Me Anything

I was recommended to do an AMA thread by the good people in this thread: http://www.wallstreetoasis.com/forums/finished-bus...

While as that one was from the perspective of a first year auditor, I myself am a third year one (well 2.5 years in).

As background I work in London auditing corporate clients and am simultaneously doing the ACA exams (British chartered accountancy). As such what I say might apply more within the UK than elsewhere.

I'm on WSO as I'm looking to move into Corporate Finance as soon as possible (I do not like audit) but I do think that one can learn a thing or two from audit.

So ask away, I'm happy to answer the questions of the WSO community from whom I've learned a great deal.

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Comments (39)

Mar 21, 2015

Thank you for doing that, and good luck in your search for a CF gig. I have a few questions for you.

I've heard and even read here that having an audit background is actually better perceived in Europe, and particularly in London, than in the US.Do you agree, and how would you advise a junior auditor in making his way to CF or IB, considering such a move is feasible?
Are the PE/RE audit groups more relevant? Finally, besides the accounting knowledge you gained, what are the other transferable skills you learned that will turn to be useful in your hunt for a CF job?

Thanks!

    • 1
Mar 21, 2015
Goldenboy14:

Thank you for doing that, and good luck in your search for a CF gig. I have a few questions for you.

I've heard and even read here that having an audit background is actually better perceived in Europe, and particularly in London, than in the US.Do you agree, and how would you advise a junior auditor in making his way to CF or IB, considering such a move is feasible?

Are the PE/RE audit groups more relevant? Finally, besides the accounting knowledge you gained, what are the other transferable skills you learned that will turn to be useful in your hunt for a CF job?

Thanks!

Hi.

Never having worked in the US I can't comment as to it's relative perception there. Here in the UK it's not a bad thing to have as it does teach you the nuts and bolts of accounting which in my opinion (as well as from what I've heard based on people who have changed jobs as well as recruiters) is quite valuable in areas such as equity research or corporate finance.

If your goal is to get into CF/IB (as it is for me), then the things to do are:
- Start learning financial modelling. Take self study courses or just get your hands on a financial model and see how it works/is built.
- Get started on the CFA. I myself have done Level 1 and will be doing Level 2 as well
- Start networking with the CF departments within your firm. Jumping straight to IB/CF at a bulge bracket bank, though possible, is generally quite difficult and happens rarely. You're better off doing a lateral transfer within your firm first and then moving to a bigger shop.

I know that in PE audit a lot of the work is around the valuation of investments so yes that can be quite useful. In addition to accounting knowledge I'd say general work ethic, getting a lot of responsibility early on, having a heavily client facing job and communicating with people who don't necessarily want to see you there and leading small teams of more junior auditors (leadership!) are quite useful skills to have and are applicable elsewhere too.

    • 1
Mar 21, 2015

@"AndyLouis"

Mar 22, 2015

Are you a senior associate, given that you have 2.5 years of experience? If so, how do you like that position? I'm a first year, but from what I've seen, senior seems like a really stressful gig. You're in charge of a lot of the minutia first years are (in terms of coaching, reviewing the work, etc.) but also have more stuff on top of it and don't get some of the flexibility managers get (i.e. the ability to work from home when needed, etc.).

Additionally, if you are comfortable sharing, what types of corporate finance roles are you looking at and how easy do you think the switch will be for you to make?

    • 1
Mar 21, 2015
Lester Freamon:

Are you a senior associate, given that you have 2.5 years of experience? If so, how do you like that position? I'm a first year, but from what I've seen, senior seems like a really stressful gig. You're in charge of a lot of the minutia first years are (in terms of coaching, reviewing the work, etc.) but also have more stuff on top of it and don't get some of the flexibility managers get (i.e. the ability to work from home when needed, etc.).

Additionally, if you are comfortable sharing, what types of corporate finance roles are you looking at and how easy do you think the switch will be for you to make?

Different firms put different job titles on virtually the same role/seniority (and these titles can also vary from country to country within the same firm). So yes I guess I would be a senior associate but I could also be called "senior executive" or "assistant manager" and it wouldn't change the nature of what I do.

I don't really like my role but that's more to do with my dislike of audit in general than the specifics of this job within the realm of audit. I just see it as a stepping stone to better things later on.

The stress level depends more on the specifics of the job and the client I'd say. There are people within my department working on other clients in similar industries but doing vastly longer hours than I am and I can see how what they're doing is quite stressful. For me I've generally had it quite easy, I've worked past 8 PM maybe 10 times in the entire time I've been here (and never really worked on a weekend), as such I can't complain.

Once you're over 2 years in you generally know how things work (as you build up the knowledge quite quickly over junior years) so it isn't like you're suddenly dumped with a load of stressful responsibility. A lot of what you describe is done by managers actually, generally I do not review junior work as such. Coaching is actually quite nice and rewarding and really not that stressful in my opinion. Generally what happens is we go out to a client, get the Trial Balance and then I delegate certain balances/sections of the audit file to the juniors and let them loose. If they have any questions they'll come to me.

Working from home is not something I want to do. I prefer to get all my work done in the office, staying later if need be, but then once I'm out, audit is out of my mind.

I'm looking at M&A/Valuations/Modelling generally within CF. Internal mobility is greatly encouraged since the firm has put a lot of time and resources into training you and it would be good if they could retain that instead of just have you walk over to a competitor. Lots of people have made the switch from audit to CF/TS as there the most junior people on the team is generally a newly qualified person. They take on relatively few grads in CF. I'd say it happens regularly and if anything, the rate is increasing.

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Mar 22, 2015

What is the general sentiment around audit among your peers? Do most regret going into it and are trying to move into industry or finance?

Mar 21, 2015
jss09:

What is the general sentiment around audit among your peers? Do most regret going into it and are trying to move into industry or finance?

Well I've spoken to a lot of people both within my department (to different yeargroups) as well as other departments and even people at the other Big Four but views are generally similar: people don't really like audit.

Of course it varies from person to person. There are the occasional few who do enjoy it and they are the ones who stay to become managers and beyond. But they are in the minority.

A few have even dropped out of the grad scheme to go do something completely different. Most however are somewhere in between. I wouldn't say people regret going into it, definitely not. But most are looking to get out to do something else as fast as possible. A lot of who stick around do so not because they love the job but because they don't know what else they want to do.

Mar 23, 2015

thanks for doing this - just added it to the frontpage

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Mar 23, 2015

What is the trade off between effort put into the work vs skills gained? (I want to start my own business in the future) I recall that some other members prefer to skate by at the bare minimum, but I'm wondering if they get less out of the experience because they put in less effort although working smart in way. Thanks

    • 1
Mar 21, 2015
HunteR23:

What is the trade off between effort put into the work vs skills gained? (I want to start my own business in the future) I recall that some other members prefer to skate by at the bare minimum, but I'm wondering if they get less out of the experience because they put in less effort although working smart in way. Thanks

That's an interesting question and has made me think. I'm not sure many people think about these kinds of things when working.

There is no easy answer to it. The thing about audit is that there is not much of a variable component to the job: it is largely about getting the accounts signed. As such putting in more or less effort has limited tangible outcome to it.
I suppose one could proactively ask for more challenging parts of the audit and that I suppose is where you could gain a bit more knowledge/skills/experience. This would be useful probably if you want to advance in audit or perhaps go into accountancy. For other career choices post audit I don't know if it helps that much, but I wouldn't deny it either.

Most people generally do float by by doing only what is required of them and not really going too far above and beyond the call of duty, yet can still go on to have great careers elsewhere or go up the ranks of audit. If you know your future lies elsewhere, it's hard to force yourself to work hard for something you're not really that interested in and I wouldn't say that would be too much of a detriment later on.

Mar 23, 2015

How old are you if you don't mind answering?

Mar 21, 2015
TommyGunn:

How old are you if you don't mind answering?

Mid 20s. I'd rather keep some personal details a bit vague since if someone I knew were to read this, they could start piecing together my identity and I'd prefer to remain anonymous on the internet.

Mar 24, 2015

lol 3rd year auditor in London in your mid-20's.. that narrows it down a fair bit. brb figuring out your true identity so I can email ur boss and tell him how naughty you've been leaking information on the interwebs..

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Mar 24, 2015

how could one leverage working in big 4 (financial services) into say ECM/DCM role? cheers

Mar 21, 2015
ggmanhax:

how could one leverage working in big 4 (financial services) into say ECM/DCM role? cheers

As I've not yet made the transfer myself, take what I say with a grain of salt. (I have seen other people transfer though)

I'd say that the detailed accounting knowledge is very useful since if you're giving a company financial advice, then you must know how the nuts and bolts of accounting work. I also suppose that working under pressure/deadlines, having a lot of client facing time and getting the experience of leading junior staff.

However one thing I would not do is try to get into financial services (FS) audit. Unlike in corporates audit where you see an entire company through and go through all it's accounts, in FS it's much more about testing processes and as these financial institutions are huge, you'll be a tiny cog in a big machine. You don't get to see as many financial statements as you would auditing a corporate entity.
If anything, unless you see yourself going into a FIG division at a bank, I'd say working in corporates audit gives you much better experience than FS audit but that's just my opinion.

Plus in FS audit you're working banking hours for audit pay- not really something you want to be doing.

Mar 24, 2015

Hey, thanks for volunteering your time!

I understand that in Canada and the UK, having a CA designation is beneficial.

I work in the accounting department of a mid-tier firm (GT/BDO) - mostly preparing financial statements and some review engagements. Would you recommend transferring into audit for an eventual transfer into finance? The people in audit that I have spoken to tell me it's not worth the hours, and how mindless the work is.

Also, in audit, is public auditing recommended over auditing privately owned businesses?

Thanks!

Mar 21, 2015
Bay Street Fool:

Hey, thanks for volunteering your time!

I understand that in Canada and the UK, having a CA designation is beneficial.

I work in the accounting department of a mid-tier firm (GT/BDO) - mostly preparing financial statements and some review engagements. Would you recommend transferring into audit for an eventual transfer into finance? The people in audit that I have spoken to tell me it's not worth the hours, and how mindless the work is.

Also, in audit, is public auditing recommended over auditing privately owned businesses?

Thanks!

Yes being an ACA/CA (or whatever you call it) is quite useful when working in finance/accountancy in the UK. A lot of investment banking jobs specify the ACA as an advantage on their ads.

What area of finance are you trying to get into? It's a broad field. If you were transferring internally and want to get into finance then go for corporate finance/Transaction Services instead. Much more applicable than audit which is simply what you're doing already but from a different angle.
The hours can vary wall to wall depending on the client. The work can indeed be very mindless and boring, though people do see it in different lights.

By public auditing do you mean auditing a publicly listed company vs an unlisted client? Well I'd say that some 90% of work in corporates audit is auditing some subsidiary of a publicly listed firm and it is only really the top company in the Group that is public. Usually that is just a holding company/HQ function and doesn't carry out any of the trading as such itself. Auditing that is largely looking at consolidations and disclosures while as doing a trading entity you see the actual business that is done.

I can't really recommend one over the other, though in general Group audit teams work longer hours than subsidiary ones.

Mar 24, 2015

Hey, thanks for the insight, and all the best with the move to corporate finance!

Would love to hear about your experience once you transition over .

Mar 25, 2015

Do you have any advice on recruiting as an experienced hire?
What are some day to day "habits" or things you do that you think make you more effective in your job?

Thanks in advance OP! Much appreciated.

Mar 21, 2015
chase_s:

Do you have any advice on recruiting as an experienced hire?

What are some day to day "habits" or things you do that you think make you more effective in your job?

Thanks in advance OP! Much appreciated.

What level of an experienced hire are we talking about here? That can make quite a bit of difference. Due to high staff turnover, then experienced hires are a welcome sight. As I came in as a graduate recruit and my career trajectory is to get out of audit, then I'm afraid I don't know what else to recommend.

Things that make one an effective auditor? I'd say:
- Strong technical accounting knowledge
- Knowledge of auditing techniques/approaches/procedures.
- Ability to stay organized and multitask as you'll often have several clients going on simultaneously. Writing to do lists.
- Being able to delegate work and portion it out to more junior staff
- Know your Excel. Though you won't be building any models in audit, having a decent grasp of Excel will speed up your work.
- Attention to detail and having a questioning mind

Mar 28, 2015

I was a senior associate in one of the big 4s in an African country and recently interviewed for Audit in charge position in the same firm but in US.

Recruiting manager:
tell me about yourself plus follow up questions
Resume walk through (what industries, how big were the clients, what responsibility, tell me about the last client you audited)
Other experiences in the resume?
What is your expected salary?
Ability to reallocate?
Asked questions about what I was doing at the moment?
Why I wanted to leave?

Interviewed by 3 partners
What kind of procedures have you done before?
How many people were you supervising?
Any experience with US GAAP since you have been practicing in IFRS?
Are you willing to do US-CPA?
How is ACCA structured? (Because that's what I have, not recognized in US by the way)
How big were your clients?
Whats the difference between test of details and substantive procedures? Which one do you normally use?
We know after MBA, there are many other opportunities you could pursue, Why coming back to audit?
Why this XXX city? what do you like about XXX
Which industries have you audited before? Some follow up questions here like comparable examples, how many such clients, a little bit about revenue recognition testing but it came as a part of a conversation.
How do you solve problems. . . example the client does not want to give you some information you requested?
What coaching approach do you take with less experienced associates?
Audit planning (in short) ( Started with understanding of the client. . . . )
What are significant risks etc.
Test of controls. . . your experience?
How does tests of controls affect the rest of the audit?
What are your development areas say if you start working here? (Which I answered truthful, I even thought I screwed up the interview mostly some technical areas I thought I needed to learn and the US GAAP thing)
What are your strengths?
Did you use the new audit approach? ( I answered yes and pointed out some few key differences between the new and the old audit approach)
Most challenging audit? What was most challenging about it? (I answered the first audit I supervised with examples of the challenging bits)
Ability to travel?
(Some questions were repeated by all partners) If I remember other questions I will add them here
Good luck with audit experienced hire interview

Mar 28, 2015

I was a senior associate in one of the big 4s in an African country and recently interviewed for Audit in charge position in the same firm but in US.
Recruiting manager:
tell me about yourself plus follow up questions
Resume walk through (what industries, how big were the clients, what responsibility, tell me about the last client you audited)
Other experiences in the resume?
What is your expected salary?
Ability to reallocate?
Asked questions about what I was doing at the moment?
Why I wanted to leave?
Interviewed by 3 partners
What kind of procedures have you done before?
How many people were you supervising?
Any experience with US GAAP since you have been practicing in IFRS?
Are you willing to do US-CPA?
How is ACCA structured? (Because that's what I have, not recognized in US by the way)
How big were your clients?
Whats the difference between test of details and substantive procedures? Which one do you normally use?
We know after MBA, there are many other opportunities you could pursue, Why coming back to audit?
Why this XXX city? what do you like about XXX
Which industries have you audited before? Some follow up questions here like comparable examples, how many such clients, a little bit about revenue recognition testing but it came as a part of a conversation.
How do you solve problems. . . example the client does not want to give you some information you requested?
What coaching approach do you take with less experienced associates?
Audit planning (in short) ( Started with understanding of the client. . . . )
What are significant risks etc.
Test of controls. . . your experience?
How does tests of controls affect the rest of the audit?
What are your development areas say if you start working here? (Which I answered truthful, I even thought I screwed up the interview mostly some technical areas I thought I needed to learn and the US GAAP thing)
What are your strengths?
Did you use the new audit approach? ( I answered yes and pointed out some few key differences between the new and the old audit approach)
Most challenging audit? What was most challenging about it? (I answered the first audit I supervised with examples of the challenging bits)
Ability to travel?
(Some questions were repeated by all partners) If I remember other questions I will add them here
Good luck with audit experienced hire interview

Mar 25, 2015

Hello, thank you for making this thread. I have a couple of simple questions for you: How is your lifestyle adjusting to the workload in the Big 4? I've heard people in Big 4 sometimes hit 80-100 hours/week or more! Are you happy with your job or do you plan on branching out to something else, if so what and why?

    • 1
Mar 21, 2015
Kreed93:

Hello, thank you for making this thread. I have a couple of simple questions for you: How is your lifestyle adjusting to the workload in the Big 4? I've heard people in Big 4 sometimes hit 80-100 hours/week or more! Are you happy with your job or do you plan on branching out to something else, if so what and why?

The workload isn't actually that bad for me but it does vary massively from department to department (with Financial services audit, particularly banking, being the worst) as well as different parts of the same client (longer hours on the Group team on a large multinational audit, easier hours on the subsidiary teams).

I've personally never worked a weekend, stayed in the office past 8PM perhaps 10 times during the time I've been here and the latest I've ever worked is 10. Most days I'm in at 8-8:30 and pack up at 5.30-6PM.
However my example might be a bit of an exception as I do know there are others who occasionally work longer than I do.

Leading on from that: as I wish to get out of audit as soon as possible, I have little motivation to put in silly hours. I do not enjoy my job, it is in fact for the most part mind numbingly dull. I thought that I'd be analyzing numbers and writing up all sorts of cool formulas in Excel but audit is nothing like that: 95% of the work is just documentation.

I want to get into CF internally and then ultimately investment banking/private equity/equity research from there. Hopefully I'm making the internal jump in a few months and then see how things go from there.

Mar 25, 2015

Thanks for the thread. I am wondering what is a safe GPA to break into audit considering that I am like most, coming from a state school.

Mar 21, 2015
Benzilo:

Thanks for the thread. I am wondering what is a safe GPA to break into audit considering that I am like most, coming from a state school.

I'm afraid I have absolutely no idea about that as I'm in the UK and the entry requirements are different to what they are in the US. I'd expect the graduate recruitment website to specify what academics they expect to see from you.

Mar 24, 2015

Having been through the recruiting process myself, allow me to offer my experience. We usually had networking events and workshops where accounting firms came in. This is your chance to make contacts. I've seen people with 2.7 GPAs get into audit because they clicked with the reps from the firms. I think a safe GPA around 3.3 coupled with solid EC's. The most beneficial EC hands down is being president of your school's accounting association. That way, you'll be rubbing shoulders with reps from all the firms. Attend as many networking events as possible.

After the event, I have seen the big 4 reps go through the business cards received from students and separate them into, presumably, 'interview' and 'no interview' piles.

The firm reps never gave a sold answer in regards to the minimum cutoff, so it's better to have them remember your name when they're sorting through the resumes.

    • 1
Mar 28, 2015

1) How steep is the learning curve? Meaning, how long did it take until you knew everything there is to know about conducting a basic audit and could do an audit in your sleep? Or are you still learning new things every day?

2) What is preventing you from breaking into IB/PE/ER right away? Why are you convinced that you need to first do some corporate finance?

    • 1
Mar 21, 2015
miamiwadecounty:

1) How steep is the learning curve? Meaning, how long did it take until you knew everything there is to know about conducting a basic audit and could do an audit in your sleep? Or are you still learning new things every day?

2) What is preventing you from breaking into IB/PE/ER right away? Why are you convinced that you need to first do some corporate finance?

1)
There is always a learning curve, it continues up into the more senior ranks as well. You can never truly know how to do 100% everything but you can gain enough experience to be able to handle the majority of situations that can come up within an audit.

I'd say at the very beginning everyone is quite lost but once you go through your first busy season (say about 6 months in- start in October and busy season comes to a close in March) then you'll have seen an audit from end to end. After that you'll see how things/processes start repeating themselves, how you're testing revenue/expenses/accruals/PPE/whatever at another client and can utilize the knowledge you gained from working on a previous one.
So 6 months is the steepest learning curve, then it gets easier. Everyone is still learning new bits here and there since the nature of audit is that you progress up in responsibility quite quickly, hence exposing you to new challenges.

2)
Nothing as such and people have done it successfully before. However direct from audit for IB you aren't going to easily jump into a 2-3rd year analyst/associate role at Morgan Stanley that easily. Generally you'll be able to get into a mid tier firm more easily. For ER it's a bit easier as I've seen people go to top of the line buy and sell side roles straight from audit.

I'm pursuing both avenues into CF in parallel: both the internal and external route. If I can get a good external role, I'll go for it but if not, my default is to start off within my firm and then off of that go for a better external role. I've spoken to recruiters both in recruitment firms and at banks and they confirm that although I could get in straight from audit, it'll be easier for me if I have some more relevant experience in the form of working within my own firm's CF function.

I think it's a case of claiming something on paper vs having actually done it. I can say on paper that I know how to build a financial model but that will be weaker evidence than having some actual experience working on some.

Mar 28, 2015

Thank you, that's very helpful!

Mar 28, 2015

Hi, williamthesnake,
I am due for a Partner interview for an Audit Grad role with one of the Big4 in London, similar program to what you are on the verge of finishing from what I understand. However, I am also due to attend a last stage assessment centre with a marginally smaller auditor for their Advisory grad scheme. I would prefer to do Advisory from the start, but some negative feedback I have heard about the internal culture of the smaller company + the scale and prestige of the Big4 have got me thinking about going about it much in the same way as you are.
From your point of view, would it be worth going through the accreditation stage in Advisory with a smaller company or try to transfer after/during the Audit scheme? Thanks.

Mar 21, 2015
skunk:

Hi, williamthesnake,

I am due for a Partner interview for an Audit Grad role with one of the Big4 in London, similar program to what you are on the verge of finishing from what I understand. However, I am also due to attend a last stage assessment centre with a marginally smaller auditor for their Advisory grad scheme. I would prefer to do Advisory from the start, but some negative feedback I have heard about the internal culture of the smaller company + the scale and prestige of the Big4 have got me thinking about going about it much in the same way as you are.

From your point of view, would it be worth going through the accreditation stage in Advisory with a smaller company or try to transfer after/during the Audit scheme? Thanks.

This is an interesting situation and I'm not 100% sure of what to recommend. Advisory is a big world, what part of it are you applying for? If it's Corporate Finance/Transaction Services then those 'marginally smaller' firms such as Grant Thornton, BDO and Baker Tilly might actually be decent places to work at since in terms of deal count, they are at the top of UK M&A league tables: http://www.experian.co.uk/assets/business-informat... (though their focus is more on the small to mid tier work, not really the headlines of the FT).
Alternatively you could start your ACA training at a Big Four and you should be able to transfer quite easily to Advisory once you qualify, but that will mean dragging it out in audit for quite a while.

I don't have any "do this" type of advice for you. Where do you ultimately want to end up?

Mar 28, 2015

I'll PM you with some details, thanks so much.

    • 1
Mar 21, 2015

Thought I'd resurrect my old thread: my audit saga has come to an end as I've secured a role in the transaction advisory department of my firm.

In case any other auditors are thinking of internal moves then go for them: speak directly to the department you're interested in and network your way in.

May 7, 2015

Thanks for this, william. Is the comp at Transaction advisory different from that at Audit within the big 4?

    • 1
Mar 21, 2015
Camomile:

Thanks for this, william. Is the comp at Transaction advisory different from that at Audit within the big 4?

Yes, it is higher and I've heard this from several sources.

Specific examples (applicable to UK only):
- Friend of mine started a grad job in CF at a Big Four, starting salary 20% more than in audit
- Newly qualified person moved from audit to TS, salary increased by PS6K
- Job ads: I've seen an ad for a TS manager role advertising a salary 10k above what an audit manager would make and an ad for a Deal Advisory role (so M&A) another 10k above that.

Bonuses hard to say, but apparently it is in TS/CF where more discretionary bonuses are paid. Some even said of 20-40% of base during the good times before the financial crisis but these claims are unverified. I don't have any changes to my salary confirmed as of yet.

Aug 27, 2015

Hi,

I am a future joiner in Big 4 about to start in Risk, which is more internal audit and performance improvement. However, I have been provided the option to do the ACA. Do you recommend me doing the ACA even though I am not in external audit?

Additionally, what are my chances of moving from internal audit to CF or IB? I am also looking at moving to CF or IB after a while in Big 4.

Thanks!

Sep 12, 2016