Is Accounting or Finance More Useful in Management Consulting?
Hi,
So I'm just curious, which is more useful for management/strategy consulting jobs: accounting or finance? I know that ideally I should have an engineering/math background, but I enjoy these two more, so which one would you say is better for consulting? One thing is that with a finance degree, there's also a good chance I can double major in management, and even though management is kind of a joke major (from what I hear), it might be helpful, plus my GPA will likely be higher in finance than accounting, so any advice?
Thanks
Dunno about at your school, but at mine the finance curriculum has a few accounting courses in it (4 for me) so that seems like plenty for management consulting. Then again, I've never done management consulting, so I'm going off what I've heard. Overall though accounting skills probably are more useful just because you'll probably use them more when looking at financial statements and stuff, but I guess it depends on the case you're on
Accounting will be better, but harder. For consulting, you'll be using a lot of it. Ultimately, though, you have to know how to deal with cases. Also, working on a oncampus student consulting group will look great (like if you have Compass Partners or something)
So you say to do accounting then? Also, I don't have an oncampus student consulting group, is there a way to start one? What exactly do they do in these sorts of groups because I can try pitching it to an advisor, but it will be hard to convince them if I have no idea what exactly will be done lol?
bump, I'm curious about this as well
Don't do accounting, have never met anyone with an accounting background, unless it was pre-MBA.
Accounting background for undergrad is not a desirable profile (unless you did banking to compensate), demonstrates none of the intrinsic skills looked for in analysts.
Well I'm not saying I want to work as an accountant, I just want to get a degree in it potentially. Why do you believe that accounting will be a worthless degree? I've actually heard from lots of people that finance is actually more worthless because it can be very theoretical and not very applicable.
A degree in accounting shows that you know how to understand FASB, GAAP, and track numbers according to rules. In other words, you have no original thought, demonstrated problem solving abilities, or anything of the skill sets relevant to a consulting analyst.
If you want to be an accountant, go learn accounting. But a degree in accounting is more of a strike against you than helpful, imo.
Mmmm that's a bit shortsighted, don't you think? The way I look at it, accounting is the fundamentals of business; the key to every transaction made. Having a good grasp of fundamentals, knowing how 10-Ks are constructed, where money comes from, etc. is important. Accounting is like fundamentals in basketball. You can't become Kobe Bryant without having sound fundamentals with accounting gives you. Finance is the equivalent of flashy finishes and dribbles. Its good to know and can add a new layer to your game, but unless you know accounting and are very familiar with the fundamentals, learning just the "flash" so to speak, can only take you so far. Plus, even within accounting rules, there's A LOT of subjectivity. A good accountant will create a completely different income statement from a bad one, so I don't know if its just rote memorization.
Anyone else agree/disagree? There seems to be a split on opinions regarding this
Accountant = stats keeper guy or rules committee, e.g. go keep track of the game or make some rules
Accountant /= Kobe
If you think accounting is the fundamentals of business, well, nevermind...
That's what an AccountANT does (although I'd still say that's misguided given that most CFOs nowadays have a CPA), but an AccountING major teaches you other skills that are needed, such as understanding the balance sheet and 10-Ks. Yeah, you won't have to revise entries as a consultant or audit your client, but understanding where those numbers came from, how to decipher the notes, etc. are important skills that accounting majors possess. Every finance person I've talked to said they wished that they took more accounting and recommended taking the whole intermediate series and whatever else you can possibly take besides tax.
You also completely butchered my analogy, but that may be my fault because I might not have explained it clearly enough.
Consultants don't look at balance sheets and read 10-K footnotes. Consultants solve problems using structured frameworks and research, which is not something accountants are known to do.
In my view, accounting is very useful. I'm not sure if it's worth majoring in, but it's something you should understand. It's applicability will vary, for example, if you're in Oliver Wyman FS, Big 4 CF/Tas, etc. then it's more relevant. However, if you're doing pure strategy at McKinsey you may never have to read financial statements.
Contrary to the poster above, accounting DOES teach you a lot of business fundamentals. I'm not sure how you can argue against that, but anyway..
As a consultant, you'll find yourself working with C-suite executives; it helps to talk to the CFO in his own language. Just recently I dug deep into a troubled clients financial statements and realized they would have trouble covering their short-term liabilities due to liquidity constraints. So while revising this clients strategy, I casually pitched the idea to the CFO that this may be something we need to look into. Obviously he was aware of the issue, but he appreciated the fact that I brought it up and we'll probably get a new piece of work out of it.
On the other hand, you don't want to be a labeled as an accountant, as they tend to be too numbers focused and narrow minded by nature.
PS I'm a music major who works at a top tier consulting firm, so I had no idea how to read FS statements when I first started. I only realized the importance later and taught myself. It took some time but I find it valuable, and useful, to easily understand and analyze fin. statements, FDD reports, valuations, etc.
Again, to answer the original question posed by OP, accounting is not going to be an optimal path to consulting. Just shows you are a bean counter and puts yourself at a disadvantage to getting your foot in the door. Management / strategy consultants by definition are not hired by clients to look at footnotes and finance issues, thats what the bankers and Big 4 are for.
Financial & accounting knowledge for consulting (Originally Posted: 11/29/2012)
I'm quite rusty when it comes to interpret financial statements, analyse financial ratios, read cash flow statements etc.
Do you guys know a good source to review the essential financial & accounting knowledge needed for consulting interviews?
I was wondering the same thing
If you're going for management consulting, you don't need to know any. In my interviews with 10 firms, not once was I asked an accounting related question.
Well I've interviewed with 5 management consulting firms 2 years ago for an internship, and remember these specific questions: - How does the balance sheet & income statement of a consulting firm look like? - If a property in your balance sheet has gained value and you sell it, what are the implications for income statement & cash flow?
So I think it would be really helpful to review some essential topics. Does no one know of a good source?
Yeah, from my experience not much finance/acct knowledge is necessary. many of the management consulting firms have engineering and other non-business majors, so interviews arent fin/acct focuses.
You FOR SURE need to know basic acct stuff like the break down of profit: revenues, costs and all that jazz, but nothing thats crazy.
But for sure be able to read financial statements and what not, for the most part, that information was depicted in for of graphs or data for us to interpret vs an actual financial statement. But it would be safe for u to know them.
Is finance a good major for consulting? (Originally Posted: 02/10/2013)
And what minor should I go for?
Firms like to tell people that they welcome all majors for consulting because in the end, almost anyone can do consulting (but not necessarily be extremely good at it). In fact, at my school, consulting internships are so hard to get because people with all kinds of majors are gunning for them.
With that said, I think a finance major would definitely help because then you can let firms know you have quantitative skills (very important) through your resume or cover letter. But if you have a very tough time in finance and feel absolutely miserable taking it, then do something else. You can always show your quantitative skills in others ways and network like a madman to get interviews.
But hey, I'm just an undergraduate currently in the recruiting process, so I'm just talking based on my limited experience.
I was finance major. Now I am doing risk management consulting in the OTC derivatives industry. I use the actual material I learned mostly only when working on proposals and business cases. But in my industry it definitely helps to know the jargon and I probably would have been lost if I did not know how banks and hedge funds are set up. I consulted in healthcare for a bit and finance was not as useful in that context.
i agree with learingMan, you need to show you can be quantitative and Finance major is a good way to do that. "But if you have a very tough time in finance and feel absolutely miserable taking it, then do something else." - yeah, dont get into connsulting. no matter what you do at some point you will work on prosposals and valuations and if you cannot handle numbers, connsulting is not right for you.
I also double majored in information systems and operations management. although i rearely use the materials from those classes, they really helped me build my logic skills. in other words, programming and process mapping forces you to think about problems and solutions in logical steps and also how to make associations between unrelated topics. this skill can be useful when thinking about strategies, roadmap creation, org restructuring, etc. Not to mention i learned how to code in VBasic which let me make macros in Excel - saved my life hundreds of times. While other analyst were slaving away formatting spreadsheets, i would code up a bad ass macro and go out partying.
Accounting Major to Consulting? (Originally Posted: 03/15/2016)
http://theaccountingpath.org/management-consulting/ What do you guys think? Especially in the Deloitte/Accenture consulting practices.
I think that, like any major, Accounting has pros and cons. Yes it is the "language of business" and therefore it would be helpful to being ahead of the game in some respects. However, I think upper-level Accounting courses become too specialized and don't foster the same level of critical thinking, problem-solving, or quantitative skills as majoring in STEM, econ, etc.
Long-story short, I don't think Accounting is the "perfect degree to help you become a management consultant".
Ipsa temporibus nobis sit sit. Placeat praesentium sit eum est sed illo modi.
Ipsam porro reiciendis alias aliquid. Id praesentium cum est veritatis sit quis eligendi deleniti.
Corporis voluptas necessitatibus quos magnam. Et voluptas ad recusandae et in consequatur. Voluptates adipisci aspernatur numquam eum quas. Sit aut tempore ea veniam cum iusto vero. Placeat vitae architecto facilis quasi. Numquam quia assumenda tempora laboriosam deleniti.
Excepturi ipsa eaque est aut quos. Quis inventore voluptatem consequatur eius. Ut vel distinctio tenetur. Aliquid omnis autem quod architecto aliquam consequatur aut. Hic suscipit eveniet explicabo quibusdam. Vitae rem omnis amet aliquid.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Ut est libero quasi nostrum eveniet. Voluptatem velit et pariatur labore maxime est et iste. Iusto laboriosam earum iste enim ut.
Ea quidem voluptatum illum sit nihil nesciunt. Est voluptates animi magni consequatur qui. Beatae et est recusandae odit. Ea nihil est cum dolores. Qui debitis et iure similique. Commodi minima minima id deleniti ut qui. Qui autem molestiae nam perferendis vel.