CPA in Banking

Anonymous Monkey's picture
Rank: Chimp | 0

How do you view the CPA certification in banking (useless, a feather in the cap, valuable, etc.)? How will a CPA affect the banker who has earned it throughout his career? Please include your position level (analyst, associate, etc.).

Comments (31)

Dec 19, 2007

It shows that you have an interest in business/accounting/finance (though "interest in business" could be debated...) and that you either did some independent study or work experience or both in the field.

While this is always good to see, it doesn't give you a big advantage when applying to banking jobs. Going to a top 10 university, having a finance internship, or even having some really good leadership-oriented extracurricular will make far more of a difference than getting a CPA.

In summary: feather in the cap.

Dec 20, 2007

I agree with DOSK17. In the end it doesn't help, it doesn't hurt, but it wont distinguish you in any way. I will tell you that in an interview your good accting background will be helpful... going forward it will be helpful, but still interviewers just don't care. Now if you will allow me to explain the flip.... If you don't get it and are capable of doing so, interviewers will call you out. I know from experience. You need a good story to that, meaning you need a good story as to why you didn't get the CPA when you had the op.

Dec 19, 2007

A CPA designation is hardly a feather in a cap. Banks are increasingly interested in people with a deep understanding of accounting ESPECIALLY MM and boutique banks. It's obviously not a golden ticket to banking, but it is valuable.

That said, you shouldn't get a CPA just because you want to be a banker. Becoming a CPA is no cake walk with all the tests, work experience, and educational requirements. If you're not at least interested in a career in accounting/auditing then you'll probably never make it through the whole process anyway. But, if you already have a CPA and would like to move into banking, the title will serve you well.

In summary: if you already have it; GREAT! if you don't and just want it to beef up your resume; you're dreaming

Dec 20, 2007

anyone else? I'm interested in this topic as well.

Dec 20, 2007

well the amount of work for a cpa really doesn't justify going out of your way to get one.

i'm going to have to take the cpa in a year or so, and the amount of prep is significant and (for my state at least) there is a time limit on the exam. you need to finish the exam (4 parts, 14hours) within 18 months i think, and failing to do so means that you will most likely be studying new material all over again. since laws and procedures change every so often.

Learn More

7,548 questions across 469 investment banks. The WSO Investment Banking Interview Prep Course has everything you'll ever need to start your career on Wall Street. Technical, Behavioral and Networking Courses + 2 Bonus Modules. Learn more.

Dec 20, 2007

Agree with Eat... I am not an accountant and not an accounting major but my school is known for accounting and my father is an accountant. The tests, from what I know and have heard, are probably the most rigorous with the exception maybe of the MCATS. If you got a CPA for banking you would certainly be taking the road less traveled.

Dec 20, 2007

As a CPA who is now an equity research hopeful, I would say that Schumacher is spot on given what I've heard from people.

The accounting skill is useful, but I'd suggest going with a more efficient route to ibd/finance if that's what you want. That means obtaining the finance experience, and probably an MBA if need be.

I'm doing the CFA b/c that seems to be more applicable to research, but for IBD i've been told that valuation exp and an MBA are basically what you would need.

Hope that helps and good luck!

Dec 20, 2007

CPA and auditing backgrounds can help alot if your looking to join dd teams, otherwise, not so much.

CRE NERD

Learn More

7,548 questions across 469 investment banks. The WSO Investment Banking Interview Prep Course has everything you'll ever need to start your career on Wall Street. Technical, Behavioral and Networking Courses + 2 Bonus Modules. Learn more.

Dec 20, 2007

Why would you go through all of the trouble getting your CPA if you don't even want to be an accountant? I guarantee you that you'll get this question if you try to transfer to banking. Banking isn't rocket science. You don't need to be an accounting master to be an analyst.

Dec 20, 2007

A few points as I was licensed this year:
1. Unless you want to work in internal audit at bank, you can't get the CPA in banking.
2. As an analyst most of the MD's I have talked to its worthless. The knowledge and experience become more helpful at the associate level and higher.
3. Most likely you will need to go for the top tier MBA, and the license does help with admissions.
4. The tests are not easy. I passed all 4 the first time in a two month window. Most of the kids I know take pretty much the entire 18 months to pass all 4 and even then some take longer. It is a rigorous test and really makes sure you know alot of esoteric accounting like pensions, which from what I have heard is not all that useful in the day to day work of an analyst.
5. If you know you want to do banking, do banking. When I graduated I didn't really think about it too much. I really wanted to live and work in the caymans or bermuda for a Big 4 firm. Having done something similar, I realized I would probably lose my mind from boredom wtih that route so I am looking to go back for the MBA and go home to NY.

If you have any question send me a PM.

RBS is better than YOUR BS, and that's not saying much

Dec 20, 2007

I agree with the previous posters that the CPA is not very valuable in banking. There is one exception. If you're very interested in tax accounting, there are advisory positions available in corporate solutions groups. These groups help corporations set up M&A and other transactions in the most tax-efficient way. One of the associates in that group at my bank started off as an analyst in a coverage group, got his CPA and then returned as an associate in the corporate solutions group.

If you like to combine tax accounting and banking, this is one opportunity. However, don't get your CPA in hopes that it will give you an edge in analyst recruitment.

    • 1
Dec 20, 2007

One important thing to point out that I for some reason didn't mention in my previous post is the amount of time it takes in terms of experience. Another factor in whether or not it is worth getting the CPA, is that similar to the CFA, there is a specifically defined set of qualifying experience set by the state licensing board. If you have an approved undergrad business degree or enough qualifying accounting credits it takes two years of 'audit and attest' experience under a currently licensed CPA. The other option is the 150 hour rule which is almost all states now require 5 years of undergrad or undergrad plus an mba or ma acct to sit for the exams. They do reduce the experience by 1 year, but if you then want to move to banking, you would have to have a story. Even more so what would you do after 2 years as an analyst? Go back for another grad degree in an mba?

The real question becomes if you want to do banking and know it, why would you subject yourself to a relatively low paying audit job and 4 tough exams for some letters after your name?

Just my opinion. I just got my CPA this year and these are alot of the questiosn I have come across recently in trying to make a move to banking.

RBS is better than YOUR BS, and that's not saying much

Dec 21, 2007

Was in a similar situation. Not worth taking the CPA. I'm assuming you're going to be in NY, but you need close to a years worth of audit related work to get certified. Banking doesn't count for it and it will really only come up on your resume as - "passed the CPA." Look into taking the CFA if you really want to take something.

Dec 20, 2007

i'm in a similar situation... went to ucb (haas), got cpa, worked at a big four (audit), sitting for CFA this weekend (yeah i probably shouldn't be wasting time on this right now), but can't even get an interview right now... it's tough, but i guess all i can say is keep trying... afterall what do we have to lose?

side question: how is it that you went to an Ivy League but sat for your CPA? i thought most ivies dont have enough accounting courses to enable you to sit?

Dec 21, 2007

Similar situation again...got my CPA and landed a job with an IB Finance team. My CPA was very highly valued through the interview process and getting the job wasn't difficult. I haven't accepted the position just yet, mainly because it still isn't clear to me whether or not this is an ops position. I'm told that ops positions in general have a bleak future and can be a major road block in getting an FO/MO type role. I've applied to numerous FO/MO analyst positions in the past and haven't had any luck thus far. I don't know if that helps you in any way but I certainly hope you have more luck than I did.

Dec 21, 2007

I am curious about this partnership track, could you say a little more about it? What is the typical accounting career progression? What are the prospects? Mobility (like...CFO or whatever else)? Compensation?

Dec 20, 2007

Wharton and Cornell are the only two ivies to have undergrad business programs with accounting concentrations. I was able to sit in a 120 hour state with my Cornell degree since the coursework is what matters not the degree per se.

Also plenty of Wharton kids sit for the CPA after working in Public and most that I know are workign at Big 4 firms with eyes on the partnership track, which although a solid career choice is not for me. For the most part I think Wharton accounting majors don't stray far from the East Coast though between NYC, Boston, DC, and Philly. Cornell is up and coming in undergrad business and from what I hear working getting more accounting and finance since the undergrad business program only started graduating students in '04 and it is a relatively small program with about 100-120 students graduating a year.

RBS is better than YOUR BS, and that's not saying much

  • mschutzy
  •  Dec 21, 2007

I don't think you'll ever find IBanks encouraging their analysts to sit for the CPA, but it is definitely an advantage in getting a job and is well-respected. Everyone in banking knows finance, but I've found that even associates and up often have relatively weak accounting knowledge. You can take comfort in the knowledge that you will never get bogged down in the accounting when modeling, and expect your co-workers to come to you when they have accounting questions.

I expect your best route to banking would be to go to a tier 1 grad school and interview for an associate position. Good luck!

Dec 21, 2007

completely agree with mschutzy. you can be successful as an associate knowing only the basics (A=L+SE) but the more accounting you know the easier it will be. I've generally found that ex-CPAs do well as associates. now, if you can get an analyst job at a decent ibank then do it but it's likely going to be tough in this market. if not, start thinking about b-school.

Dec 20, 2007

Again I worked for a Global 500 company, not a public accounting firm, but what I will give it a shot. Feel free to correct me if someone else sees it differently. Also this is only on the Audit/Assurance. TAS and TAX are different animals and I don't have a good idea of the progression.

In Audit typically the path from school for Big 4 goes like this: Associate/Staff (0-2yrs), Experienced Associate (2-3yrs), Senior Associate (3-7yrs), CPA Licenses is generally 99.9999999% of the time required beyond this point, Manager/Senior Manager (5-10yrs), Partner (8+yrs).

The higher on the scale you get before you leave the better the outside prospects. My company has hired several senior managers and partners from the likes of E&Y, PwC, and KPMG for controller, divisional/segment financial officers, financial reporting, SOX compliance. From there our global treasurer, CFO, Chief Audit Officer, and Chief Accounting Office all came out of Big 4.

RBS is better than YOUR BS, and that's not saying much

Dec 21, 2007

Having the CPA can certainly help in certain circumstances...when I was interviewing for an analyst position in investment banking...at the time, the bank was looking for someone with a strong accounting background (as well as finance of course, but specifically accounting as well)...they may test your accounting background, as well, due to you having the CPA...all I got was stuff like what does convertible bonds and restricted stock due with applying the treasury method, how does 50mm of depreciation with 40% tax affect the financial statements, etc.

Having the CFA is, in general, more recognized from my experienced than the CPA, but it depends on the situation....

Dec 21, 2007

your best chance would be to go to business school, network, and try to get in as an associate. unless you know people in the industry, in which case you could just start networking now and hope to get some interview in the FT process.

Dec 21, 2007

Agree. Bschool is your best shot. You won't get hired as an analyst because you are over qualified with work experience and under qualified in terms of your pedigree. Maybe if you had contacts at a small regional boutique you could net work you way in. However, if you can get into a decent bschool top 15 or so, you would probably be able to get a associate job especially if you crafted a good story about why you wanted to switch. If you do go the bschool route and can get into a top program make sure to really refine your story as to why banking and why the switch.

Dec 21, 2007

Look at MM M&A jobs online. Tax is a niche area, I'm sure you know that. And the fact that you could bring that to M&A groups is looked highly upon, granted after time you might want to move away from tax M&A advisory towards other areas, but you should also go back to school if your interviews (if you get invited) don't go so well. Post your resume once it's updated and the group will help you out.

Dec 21, 2007

One of our VPs came from an accounting background. He took the BSchool route. It's hard to get in any other way to a Bulge Bracket

Dec 21, 2007
Comment