Business Valuation/M&A Question
Basically I'm at a non target state school that still has a recognized business school. Although I like accounting more than finance, I find one of the more interesting careers for CPA's is working in business valuation.
So, I have two questions really;
1.) Would someone with a CPA, say 5 years of experience at Big 4 audit, and an ABV (Accreditation in Business Valuation) work at an investment bank, a private equity firm, or either?
2.) If said person studied finance instead of accounting, and was able to get into IB right out of undergrad from state school, wouldn't it just make more sense to do that to get the same job (if it really is the same job?)
Before I get any harsh comments, I just want to add that I do have a significant interest in accounting, and I'm not just looking to make six figures right out of undergrad. And my school does place quite a few students on Wall Street considering our "rank."
Thanks,
JeremyS
Thanks guys
I've read your questions three times now and I have no clue what you are trying to ask.
Don't do a CPA if you want to work in IB. Go for CFA or Finance major instead.
2) What are you asking here?
1) My first thought is neither. If you put a gun to my head, I'd say a PE shop purely as a due diligence guy (i.e. quality of earnings), meaning you will be paid less and probably have more limited ability to move up.
I thought it was straight forward but I'll reiterate I guess.
From a CPA website, I was just looking around and it stated that "Business Valuation" was a career of its own, kind of involved in M&A.
My first question was as to where a "business valuator" would work. I would assume during a merger/acquisition, there would be CPA's on both sides of the transaction that are establishing the true value of a corporation based on it's current assets/liabilities, intangibles, and future prospects.
Second question: If there are in fact these ^ CPA's that work in IB, assuming they need years of work experience to get into that position, wouldn't it make more sense just to major in finance and go straight to IB (obviously this would be more difficult).
Basically I'm just wondering if anyone knows anything about this ABV certification and if it is worth attaining.
From what I've read since posting this, I'm seeing that these jobs really fall under the Advisory/Transaction Services departments of the Big 4 firms. I guess this is the wrong place for accounting questions.
Business valuation is not investment banking. You are simply providing companies with a valuation report/summary or verifying the valuation of a company in due diligence.
BV is quite academic whereas IB is an art. You do not need to be a CPA to work in BV, but it certainly helps, particularly b/c the reports tend to be quite mundane.
You can work for a Big 4 or regional accounting firm, a pure BV firm (i.e. Accuval), or a hybrid IB/BV firm (i.e. Duff & Phelps, SRR).
Okay thank you for the helpful info. I'll research these types of firms.
5 years is way too much time in audit. IMO tax is a better background and any type of financial analysis role (finance) is even better. You will have to start as the analyst staff/level unless you have direct experience valuing companies. 1 or 2 years will suffice but a lot of larger shops will hire ppl directly out of undergrad/grad.
Business valuation is based upon corporate finance theory but in practice has a lot of accounting, law, economics, and finance. If you enjoy audit/accounting you may not enjoy the work as there can be some grey area.
Designations mean nothing if you don't have direct experience valuing businesses.
There are different niches that you can specialize in such as: Litigation Gift & estate Fair value (purchase price allocation, impairment testing) Advisory ESOP's Fairness opinions etc. They each have there own nuances and interesting components.
Every large accounting firm basically has a valuation department and there are a lot of independent valuation shops. There really are no set exit opps for BV, definitely not PE or IB. The skill set is somewhat similar but you will have to make your own luck if you want to get into either field.
There really are no set exit ops for anything if you suck at what you do.
I have seen exits from BV into IB, PE, VC, HF, Corp Dev.
As long as you are good at what you do you will be fine.
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