Big 4 to Equity research..

Maherj1's picture
Rank: Orangutan | 310

...what are some possible routes?

Im only a 2nd year in big 4 audit so I know manager in big4->Mba->ER might beone route but I cannot stick the job anymore....No way I am sticking around until manager.

So what are some alternatives? Im willing to start from the beginning (e.g. internship).

Comments (52)

Feb 25, 2011

Have you tried to switch to TAS first? (I'm not sure how possible that is)...

Feb 25, 2011

Yeas, I am actively trying for TAS.

Would TAS trainee->TAS manager->MBA be a realistic route?

How hard is it to get into a good MBA programme with just Big 4 experience?

Feb 25, 2011

TAS makes good sense for banking but I'm less sure how valuable it would be for ER. Specific sector-focused auditing experience might be a more natural path. My perspective is that you should move as soon as possible to a finance job if you want to do finance as little of what you do in audit is truly transferable.

Big 4 place pretty well into MBA programs, especially if you take advantage of their internal opportunities like secondments to foreign offices etc.

Based on your spelling of programme I'm guessing you're outside the US, so this advice may be slightly off.

Feb 25, 2011

I've definitely seen it. Two of my interviewers this fall went Big 4 -> boutique ER -> BB ER.

Not sure what role they were at the Big 4 though. They were both CPA though, so presumably audit?

So it can be done. I would try to find some people on LinkedIn and reach out to them.

Feb 25, 2011

I've always heard that its difficult to make the switch but most (8/10) of the new hires at my banks come from Big 4.

There's hope!

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Feb 26, 2011
KarateBoy:

I've always heard that its difficult to make the switch but most (8/10) of the new hires at my banks come from Big 4.

There's hope!

80% come from big 4? That seems high.

Also, if previous poster is "very wrong" and there are not many transferable skills - why does your bank hire 8/10 new people from Big 4?

Feb 25, 2011
JBGH:
KarateBoy:

I've always heard that its difficult to make the switch but most (8/10) of the new hires at my banks come from Big 4.

There's hope!

80% come from big 4? That seems high.

Also, if previous poster is "very wrong" and there are not many transferable skills - why does your bank hire 8/10 new people from Big 4?

Yea, we've recently went on a hiring binge from the Big 4. I personally wish we hired more people from industry but its not my call.

The Big 4 is a good place to find people who know how to read the income statement and are willing to work. HOWEVER, when I said read I mean that they know what the line items mean and how the statement are connected. We still need to teach them how to discern trends from those statements.

I agree 100% with the poster above me, What-to-do.

Feb 26, 2011

People really fail to see how close audit is to ER..

Audit--> testing of controls or substantive testing (majority of the work.. very boring)... verifying financial reports.. interviewing management on certain issues and numbers... getting direct knowledge of the operations of a business. Retrospective.

ER--> examining financial reports.. interviewing management on certain issues and numbers.. strategic examination of industry.. lacks direct knowledge of operations of a business. Forward thinking.

the 'finance' work in ER is just the modelling. ER tracks closer to accounting imo.

Audit at a big4 is the ugly cousin of ER but is still related none the less. Learn to sell your skills and you can do it.

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Feb 26, 2011
Wannabedude:

People really fail to see how close audit is to ER..

Audit--> testing of controls or substantive testing (majority of the work.. very boring)... verifying financial reports.. interviewing management on certain issues and numbers... getting direct knowledge of the operations of a business. Retrospective.

ER--> examining financial reports.. interviewing management on certain issues and numbers.. strategic examination of industry.. lacks direct knowledge of operations of a business. Forward thinking.

the 'finance' work in ER is just the modelling. ER tracks closer to accounting imo.

Audit at a big4 is the ugly cousin of ER but is still related none the less. Learn to sell your skills and you can do it.

This is very wrong, unless ER on the sell side is completely different from ER on the buyside.

Interestingly, one of the portfolio managers my group work for comes from a big-4 audit background, and he is one of the biggest opponent of hiring Big 4 laterals unless they are willing to start at the 1st year entry level. He transitioned into ER as a 1st year research associate after 4 years of experience at big-4, worked around 10 years in ER and transitioned into a PM role. He feels that besides being able to read financial statements, there's NOTHING ELSE transferable from audit/accounting, and nothing that warrants crediting any of their experience and putting them above any other entry level candidates out of undergrad.

He is a pretty big shot PM so if you know who I am talking about please don't out him here, because I don't want to reveal where I work on the forum. Thanks

Feb 25, 2011

Wannabedude is very wrong.

We recently hired a former audit manager from PwC to work in our coverage team. The only transferable skill is being able to read financial statements and "attention to detail." That's the bare minimum for anyone looking to work in ER.

Sending out bank reconciliations, testing for materiality, and debating whether something is an administrative expense or selling expensive is worthless in ER.

Feb 26, 2011

lol.

You guys make it seem audit and ER are worlds apart.. yes some aspects of audit don't apply.. but really? you make it seem the interpretation of financial reports is such a small aspect of ER. Auditors, if they are astute, would know exactly how to pick apart any financial statement better than any analyst. I think audit would be a good start to ER.

Feb 25, 2011
Wannabedude:

lol.

You guys make it seem audit and ER are worlds apart.. yes some aspects of audit don't apply.. but really? you make it seem the interpretation of financial reports is such a small aspect of ER. Auditors, if they are astute, would know exactly how to pick apart any financial statement better than any analyst. I think audit would be a good start to ER.

Have you actually worked as an auditor?

Feb 26, 2011
Kenny_Powers_CFA:
Wannabedude:

lol.

You guys make it seem audit and ER are worlds apart.. yes some aspects of audit don't apply.. but really? you make it seem the interpretation of financial reports is such a small aspect of ER. Auditors, if they are astute, would know exactly how to pick apart any financial statement better than any analyst. I think audit would be a good start to ER.

Have you actually worked as an auditor?

he is just a fresh grad going to start at morningstar in the future who thinks he knows everything

Feb 25, 2011

I'm glad to hear that you feel that you know more about the role of an analyst than the two individuals in this thread that are in the industry.

Feb 26, 2011

Different shops different philosophies I guess.

Feb 26, 2011
Wannabedude:

Different shops different philosophies I guess.

No. You can't say that because you haven't even been at a shop.
Funny how someone who has never worked in the industry thinks he knows everything.

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Feb 28, 2011

I can't get over how people with 0 experience tell others on here "how things are".... A skill you need for ER, ability to listen and definitely do not speak on something you're not 100% confident of.

Feb 28, 2011

same background as OP

I think it is going to take luck and the perfect situation to make any jump before getting your CPA. also think it would be a waste to pursue an MBA after making manager unless you really can't stand accounting.

there is hope. I was able to land an interview with HLHZ in their FAS practice. Actually got passed the phone interview, but decided to turn down the 2nd round office interview to pursue other opportunities within my firm.

goodluck.

Feb 26, 2011

I worked in audit man.

Feb 25, 2011

That explains it :P

Mar 2, 2011

Im an undergrad but it seems to me that audit might be a decent segway to ER, financial statements are the bread and butter right?

Feb 25, 2011

No, they're not.

Great financial statement analysis does not make a great sell-side analyst. The value is having connections with private company.

Moreover, you won't become a great analyst of financial statement in audit.

LIKE I SAID EARLIER- sending out bank confirmation or counting inventory does NOT teach you how to predict future earnings.

Mar 2, 2011
KarateBoy:

No, they're not.

Great financial statement analysis does not make a great sell-side analyst. The value is having connections with private company.

Moreover, you won't become a great analyst of financial statement in audit.

LIKE I SAID EARLIER- sending out bank confirmation or counting inventory does NOT teach you how to predict future earnings.

Interesting, thanks

Feb 25, 2011

I'll second what KarateBoy said here:
The skill-set of an audit associate at the Big 4 a) is not conducive to learning to analyze the entire picture presented by a set of financial statements and b) usually includes little or no valuation experience.

One thing auditors do tend to know very well is how to read and interpret the disclosures companies make in the footnotes.

Mar 2, 2011

The valuation practices at the Big 4 firms would be better than audit.

Feb 25, 2011

@ Steve Mallory.

Most of the valuation work @ Big 4 is goodwill impairment testing. Meh....

May 30, 2011

Only the incompetent staff send out confirms and go on inventory counts after the first six months, i.e. the people no one wants to pick up for their jobs. Beyond that, there isn't much difference between an associate and a senior associate other than the face time they are given with the client and increased administrative duties (mentoring/coaching). I sat down with the CFO and Controller of a public company within the first year to discuss the financials. We were practically writing them, so you do get good experience with how they work. It probably just depends on the caliber of the auditor and whether they actually care about trends. One of our biggest tasks (time-wise) when conducting a review is trend analysis to determine whether the financials make sense. Most of the kids who don't have finance experience in undergrad struggle with this because of the level of precision and understanding necessary but a lot of us do have the skill set. Wouldn't that be transferable?

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Feb 26, 2011

Nah man, ER is TOTALLY different from audit.

Feb 26, 2011

You might as well not even ask anything about audit on this site. No matter how relevant your point / question people are just going to bash you.

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Jun 3, 2011

i personally moved from audit to research. you can pm me if you have any specific questions.

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Jun 4, 2011
Jun 5, 2011
D M:

http://blair.net-apply.com/opportunity_.asp?oid=WB...

Looks like you pretty much set that argument straight, thanks for the clarification.

Feb 26, 2011

NO MAN.

NOTHING LIKE AUDIT AT ALL.

Jun 4, 2011

The problem is there are so many different paths, and especially on this board, people are going to lean more towards the traditional path because it's the best answer for the majority of people. That and most people here haven't been/aren't going the accounting/big4 route of college.

OP: Look at job descriptions at places you want to work. Check back once a month or so for new descriptions and over time you will get an idea of what those employers look for. Also, make sure to look at descriptions for all positions and not just entry-level jobs. You'll notice some of them may say 8-10 years experience in accounting or something. While that particular job may not be what you're looking for, it also lets you know that that firm respects and hires accountants.

Jun 6, 2011

I know someone who went from big4 accounting to SIG equity research, got in through a HH. But he went to a target.

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Jun 6, 2011

If you don't mind me piggybacking on this guy's question, are there any transferable skills coming out of audit specifically? Would someone whose time in the Big 4 was in tax be at an even greater disadvantage?

Jun 6, 2011

I can tell you that Audit is most definitely better than Tax when it comes to exit opps in unrelated or tangentially related fields, primarily because you'll have exposure to a wider variety of stuff.

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Jun 6, 2011

anyone else on the transition from audit to AM?

"Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid"

Jun 6, 2011

Bumb,

I am also interested

Jun 6, 2011

I am also trying to make that move soon, so I am trying to get some solid advice. I am at Big 4 audit with some TAS rotation, looking to move to ER and eventually Hedge funds. Any advice?

Nov 7, 2017

If you're in Canada by any chance, the Big 5 banks are littered with CPA's. You can find them easily on LinkedIn, it's worth reaching out to them. The few people I know at Credit Suisse are also CPA's.

Someone way up mentioned "sending out bank reconciliation's", although I'm assuming he meant bank confirmations (ie. he has absolutely no idea what he's talking about). I have no idea what CPA's do south of the border, but if you have a Senior Accountant sending out bank confirms, while billing out $300, god bless you guys.

At the end of the day, you're very competitive in interviews. You literally create the financial statements of the company from top to bottom. The amount of documentation you make within the file is essentially a research paper in itself.

Just reach out to people and ask to go for coffee, that's how I got my initial interview for ER.

Nov 6, 2017

Add $ISIG $MJOG $KERX $MYO

Nov 7, 2017

OMG! career change from BIG 4 is a common topic here so please do yourself a favor and use the search button. OMG!OMG!

No one would remember the Good Samaritan if he'd only had good intentions; he had money as well.

Nov 7, 2017

Sorry. I read those posts but they had an audit background which is slightly differently from the service line that I am in. It seems like for audit...the typical path is audit> ts/valuation > ... but my question is...given what I have been doing at big 4, is it still worth taking the cfa level 1?
I am definitely learning a lot and enjoy studying for the exam but I would like to know if it's worth the opportunity cost in terms of helping me change my career path. Thanks again.

Nov 7, 2017

Try and talk to the people you'd be working for. Tell them you've applied, and ask if they'd like to see the analysis you've done up. More importantly, ask them "for advice about working at the endowment". For whatever reason, the collective neurosis of this industry disallows people from talking straight, so you can't just ask anyone for anything. Fucking weird, right? Anyway, moving along. Go to them seeking advice, and they'll tell you how to get a job at their firm, that's the logic. People in industry refer to this as "building a relationship". Again...fucking weird right? But that's how this game is played.

Frankly, HR is borderline useless at best. At some firms, they're very good, but I just haven't experienced good HR, ever, no matter where I've been. More likely they'll cock block you because you don't have the requisite experience of 10+ years as Goldman Sachs CEO and multiple ivy league post docs. Heavy sarcasm, but IMO, HR are best kept to taking your fingerprints and filing your U4, not involving themselves with actually running a business.

Think of it this way: if you're running a business, do you want to vet talent yourself, or do you want some some peon with no concept of the big picture making the judegement call on who you're going to work with. Do coaches typically hand pick their lineup, or do they delegate it to the groundskeepers? Think along those lines. The coach (the person running the group) has ALL the power, especially with new hires, so go straight to them.

Good luck. I'm considering doing the big4/CPA route to establish a good plan B, and then move back to finance. Sounds weird, but I've never seen a decent accountant who couldn't find work....meanwhile, loads of otherwise qualified finance folks are unemployed. Not much of a consideration when you're young, but I'm trying to plan for long term contingencies. If you'd be willing to talk about this, let me know, I'd love to pick your brain.

Nov 7, 2017

Thanks for the response. I have a contact there who is a senior analyst (basically friend of a friend) who was nice enough to talk to me over the phone about her experiences there, but that's basically as far as we got. The conversation was helpful, but not in the sense that it'd get me noticed. You are correct though, and I hadn't thought of going straight to the senior/PM type role in the dept I'm applying, so maybe that is a route I'll look into. At this point I just know that I can bring more than my resume necessarily portrays, so I'm looking for a way to stand out - i.e. hand delivering a research report/cover letter/resume or getting in contact with others who work there.

As far as your last paragraph, you are both right and wrong. You are correct in the fact that big4/CPA route will keep you employed in a good job with probably the best job security in all of business. As long as you are competent, you will *not* be jobless for long. However, once you move into the accounting role, you will soon figure out that moving "back into finance" means going to back office. Because I'm only 1 year out of school I'm taking my chances now to start afresh in something that that really gets me up in the morning. Accounting is interesting/challenging, but I've really had that moment where I've decided this is not what I want to do for the rest of my life (although I could if I wanted...). If you want to discuss further feel free to PM me. Thanks!

Nov 7, 2017
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