Q&A:Big 4 Audit to Boutique M&A Shop

Amazing story, and congrats! Happy that your hard work paid off, mate!

I would be surprised if they gave you a look if you just had a tax background. There are almost no transferable skills (you aren't going to be the one figuring out the tax nuances on M&A deals as a banker, that'll be the Big 4 tax M&A guys).

My situation is pretty different. I'm a sophomore working full time at a big 4, so id be the same age if not younger than others competing for SA positions. Do you see Big 4 client facing experience as an advantage over others who have no work experience?

Usually for TAS you need at least 2 years of audit experience, they only hire Senior Associates. For IB, the less time in an audit role the better. Pass your CPA asap though as it will be looked at favorably.

Thanks a lot. I wouldn't worry about time as much as I would worry about learning what banking entails, basic valuation, basic modeling, and hammering down accounting concepts. While you're doing the aforementioned stuff, I would network constantly and start doing so asap. By the the time you get the IB position, you'll already be a significant amount of time in, and even if it isn't significant, that just works out better for you. Don't be afraid to have those conversations with people early but make sure you're still performing at a high level with whatever is currently on your plate.

If I were you, I would try for both TAS and IB positions. Why restrict yourself in your search? I know one guy in particular that left my Big 4 about 5 months in for an elite boutique and one guy to another boutique in 1.4 years as well. To my knowledge, vacancies tend to be highest at banks post bonus period and right before 1st year FT analysts start training which I think is in the early summer as there may be a handful spots that are open for some reason or another. I would target my efforts around these times and be opportunistic during the off season. I myself caught my gig simply due to turnover as the individual resigned for personal reasons.

If you can source openings and connect with the right people, convey your story/pitch, and demonstrate that you have the ability and desire to do banking, whether you stay in audit for 2 months or 2 years makes no difference. Lastly, don't take any crap from fellow colleagues, seniors, and head hunters who try to feed you nonsense about why you should stay for x amount of time or until you hit your senior associate year. All that is bullshit and is irrelevant and will work against you.

Hope this helps. Feel free to reach out here again or pm me.

I'm not op, but I've talked to several professionals in the field. The CFA really relates to Asset Management careers and not really for banking jobs. I guess if your'e not form an accounting/finance background it shows your competence/desire for the industry but it's not that common in banking. Doesn't hurt to do it if you got the time.

Thanks a lot.

I took L1 because my firm sponsored me, my hours were good, my CPA helped exponentially, and I was an accounting major in college, not finance. Based on the aforementioned reasons, I only spent about 2.5 months studying in total for L1 while networking/learning, so not a major time commitment for me.

I never looked at the CFA as my ticket into IB. All the stars sort of aligned, I was opportunistic, and to a certain degree, I was looking at it from a learning perspective as well. To a banker, passing a level or the entire exam and obtaining the charter essentially means that you cant take a test, you're a hard worker, and you manage your time well. Outside of those qualitative factors, the technical translation to banking is minimal at best. Whenever I'd interview or pitch my story to anyone, passing L1 was never the main topic of discussion but more of a side comment I'd throw into conversation primarily to add credibility to myself. For banking, the exam or progression through the exam adds a differentiation element to your profile at best which isn't a bad thing but should be weighed against the opportunity cost of your time. If you're fine with this reasoning, then I would go ahead with the exam.

If you're goal is indeed an IB analyst, I'd do what I've said in earlier posts. Learn/Research, source openings, and network constantly.

Hope this helps. Feel free to reach out again here or pm me.

I think you should start having those conversations as soon as your comfortable walking people through basic valuation techniques including dcf, comps, precedent transactions, etc. You're in a fortunate position because you don't have to sell anyone on the fact that you understand valuation. Your primary job is/will be valuation and the fact that you're at a big 4 validates it further. On the other hand , I'm not sure how solid your understanding of accounting is so maybe that's something worth putting a little time into. If someone asked you the affects a decrease in amortization would have on all three of the main financials at a specified tax rate, you should be able to answer that and walk them through that thought process fairly simply.

Overall, as long as you know what you're talking about from both a valuation and accounting perspective, tenure at any one firm is irrelevant. If you want me to quantify it and based on the assumption that this your first job out college and you're well prepared, 1 year to 1.5 years is the most likely scenario. One thing I've learned is preparation and overall readiness is key in landing the job as you never know when a position will open up. If a spot opens up and you're still scrambling to understand basic stuff, odds are you're too late. On the flip side, if you're on your game, the transition can be made in months. As I've previously alluded to on this thread, I knew one guy that did it within 5 months with a formal audit background, not even valuation. At the end of the day, if youre well prepared and can pitch your story professionally, the bank won't care about age or tenure. If anything, they'll be happier you're younger so they can mold you however they want to.

Haven't officially started yet as I'm in my 2 weeker. From talking to the firm, they said I can expect to get out anywhere from 9 to 1am everyday. Deal-flow has been solid there with a couple more mandates on deck, so I'm assuming I'll be busy right when I start.

Right now, I'm thinking I want to go PE or HF as my end goal but all that can change. I'm going to a very lean boutique with potential promotions in the medium term if I perform well, they like me, deal-flow is good, etc. I'm going into this with an open mindset, and I don't want to cross long-term banking off the list for good prematurely.

Thanks a lot.

1) So from what you've said, it seems like you have a process in place that's working for you, and so, I'd keep going with that. The fact that you've made it to two final rounds says a lot which is good. If I were you, I'd try to review both interview processes in my head and really see what I could have improved on. If the firms you're corresponding with were really keen on hiring deal guys, they wouldn't have pushed you to final rounds. To me, it seems like you may have gotten passed over for more intangible reasons than actual technical skill, but again, just my perspective and reasoning. I think it's overall very important to understand you what bring to the table especially when you come from an audit background. You're not going to be the financial modeling guru or the valuation guy right off the bat, but demonstrated learning/understanding will help here and you need to express that in your interviews/conversations. You're the financial statement guy that can synthesize information from the financials quicker and smarter than anyone else which is evident by your Big 4 experience and CPA. Overall, I really think you should continue your process. Whichever firms you had final rounds with, I'm assuming you have contact info from all the people you interviewed with. I would try and kindle a connection there, so they keep you in mind for future openings. You've already gone through their respective processes, so it could be efficient/beneficial for both parties going forward. It also shows that you're hungry, that you want that specific firm, and you know how to manage relationships even after facing rejection.

2) I think any sort of valuation position will greatly increase your chances with IB firms. TAS is a solid option at another Big 4 which I've heard isn't as terrible a transition as there is a high chance of politics within your own Big 4. I can't really comment on corporate or commercial banking as I have never really looked into it too much, and I don't want to potentially lead you astray. What I will say is that it would depend on the work you're doing. If you're in corporate banking which I'm assuming is corporate finance, then yes I think it would be a solid move as you'll be involved in transaction work and modeling. I think audit is good for 2 years, max 3 years. Outside of that, you will get pigeonholed and it will be very hard to diversify. If you get a TAS, valuation, or corporate finance job, I'd leave immediately. If you're in busy season when you get the offer, I'd try to tell your future employer that you'd like to come on board post busy season as you don't want to burn a bridge. More often than not, they're conducive to it and actually appreciate it as it speaks to your character. At the end of the day, they are somewhat reassured that if/when you leave them in the future, you'll give them the same respect.

3) I have done all of what you've said except cold-emailing or calling. I have found that it was simply a poor return on my time, but then again, I'm sure it has worked for some people. I think it's helpful to have some sort of connection to the person. The best part about that is that the connection can more or less be anything including high school alum, college alum, Big 4 alum, 2nd connections on linkedin, etc. I got a lot of good perspective from my high school alum and college alum. I landed my banking gig through a linkedin job posting, but the numerous conversations I have had with people all across my network from alums to colleagues of friends in IB have been fruitful. At the end of the day, more people know exactly what I want which only helps and grows the network. Overall, you need to show that you're hungry and that you're dead focused on IB. Don't get distracted by other Big 4 people and head hunters as they're relatively useless in your path to IB but try stay on good terms with them. Lastly and importantly, don't forget people who have helped you. Keep your network updated as to what you're doing, what moves you're making, etc. At the end of the day, when you do land your banking gig, make sure to thank everyone that has helped you in any way, shape, or form. I have found that it's these little things that people remember about you than anything else.

Hope this helps. Feel free to reach out here again or pm me.

Also, I'm assuming you went to Vanderbilt. Your school has more of a presence in IB than my school hands down and probably by a significant margin. Definitely make use of this as it will make your life a lot easier connecting with people.

Thank you.

You have to understand how the financial statements work in regards to how the three main financials (BS, IS, CF) are linked. You have to understand how changes in one account on one statement affects another account on another statement. No one is going to ask you about consolidation accounting, IFRS vs GAAP nuances, pension adjustments, journal entries, etc.

I have found the best way to approach accounting techincals for banking interviews is to assess them as I prep for banking technicals. By banking technicals, I'm referring to the infamous "walk me through a DCF" question. If you understand how a DCF works, there's tons of accounting technicals they can throw at your from free cash flow questions to wacc questions to enterprise value questions. Some examples include:

Financial Statement - How would an increase in depreciation at a certain tax rate affects a company's cash account? Free cash flow - How do increases and decreases in networking capital affect FCF?
WACC - Assume a capital structure of 25% debt to equity. What are the percentage components of debt and equity when calculating WACC? Enterprise Value - How do you get to equity value from enterprise value?

As you can see, the aforementioned questions aren't by any means advanced but do require a solid understanding of accounting. More often than not, your response to questions will be followed up another question inquiring of your logic or reasoning. At the end of the day, even if you don't get the right answer, your thought process is equally if not more vital, so think out loud and have be able to intelligently justify your responses. Remember, they're not looking for geniuses; they're just looking for hard-working people that are well grounded in the basics.

Hope this helps. Feel free to message here again or pm me.

are you serious lol

Thank you. Happy to provide an update. I have been at my firm for a little over a year, and I feel like I have learned exponentially and continue to do so. In regards to deal flow, two of my deals have signed (one buyside and one sellside). Currently, I have one sellside deal that should be signing by Jan 31st along with three other projects that I am working on (one buyside and two sellside). I feel fortunate to spend less than 2% of my time working on pitches with most if not all my time dedicated to live deal work. Hours are typical banking. I'm in between 9-9:30 and I'm out between 10:30 and 11. An early night would constitute leaving at 9pm and I have the sporadic 1, 2, 3 and a handful of 4ams.

In regards to exits, I have headhunters reaching out for PE, HF, Corp Dev., so I have gotten looks despite not coming from the Goldmans of the world. I was early promoted to Associate very recently, so I've been soaking that in and feel fortunate for this to have happened. Granted, the promotions here are not as structured as a bigger institution, it's always nice to get paid more :)

I think most people (myself included) come into banking with the pre-conceived notion of leaving in two years to the "promise lands", but I have to say, I've really been enjoying the work. I think a function of it is due to the fact that I'm with a boutique, so I work hand in hand with the MDs and get to see my analysis/deliverables all the way through to the client. I also really appreciate the exposure I've gotten and the deal-work that I have been lucky to have been staffed on. Feels good to know that a CFO is comfortable enough to shoot me a text if he has a question or concern. While I have considered testing PE recruiting waters, I don't feel an immediate need to leave just yet. I feel a true ownership of my work and I enjoy the advisor aspect of IB.

Ofcourse. I'm in NYC.