What's wrong with the Big 4?
I am not in the finance industry, I am in education, but enjoy reading WSO. As I read on here some people say some schools are only good for working at the Big 4 accounting firms. My question is, what's wrong with that? Don't accountants make good money and have decent hours?
IMO you do not get the same out of what you put into audit/accounting as you do in IB. You're not compensated nearly as much and the work you're doing doesn't really add value in the same way IB does. Companies calling in auditors seems like a necessary routine chore. A lot of people on WSO complain about how awful the grunt work can be, but working closely with a company's management to close a deal can be a really rewarding experience (even at the analyst level).
There's also the aspect of prestige associated with IB. I don't want to get into an argument about why individuals should think about prestige when thinking about jobs out of college, but I will say that you're less likely to see an audit/accounting background at a top b-school (probably for the reasons I mentioned about the nature of the work).
There's nothing inherently "wrong" with it - to some people it satisfies as an end goal because it's realistic and achievable. If you're an overachiever, you wouldn't settle for Big 4 as it's simply nonsensical. You end up working 80% of the hours for 1/3 to 1/2 the pay and 20% of the respect. This isn't hyperbole.
I have never in my life heard or read about someone who willingly chose the Big 4 route over Investment Banking, had they been fully aware of both. The same people who "settle" end up being those who can't hack even the 60-70 hour week busy seasons, and that's why Big 4 has an ever greater churn rate than banking.
Having worked at both a big 4 (transaction team tho, not audit) and IB, I fully second the comments above, it really depends what your goal is. Here's how I would put it from my experience:
Cons: 1) pay is nowhere near what an ib will pay you, 2) there are just so many people working at big 4s which implies: a/ you can be surrounded by smart ppl but also very stupid/useless people which is frustrating when you're a top performer, working your ass off but you get more or less the same pay at the end of the day. b/ say you're a senior con, there's going to be an army of managers, senior managers, directors, partners sitting above you, meaning your responsibilities are more limited on a transaction than if you were working at an IB with less ppl and only 2 ranks above you
The honest answer is that WSO monkeys are bigger suckers for money and "prestige" than actual monkeys are for bananas. Hell, I think half the guys here would probably sell their souls in exchange for being an MD/Partner at GS/McKinsey. I think a lot of that comes of the fact that a lot of the people here aren't even out of school yet, and haven't actually been through the gauntlet. Grind through a few all-nighters and IBD really starts to lose its shine. Yeah, there are plenty of people who are in or have been in IBD and still wouldn't give it up for the world, but I assure you that it's a much smaller proportion of the population than WSO would make you think it is.
Is the money much better in IB than in audit? You bet. Is the work more interesting? Sure, I think most people would say so. Does that mean audit's for suckers? Certainly not.
In audit you get a few years of no life and crappy pay, but after that the workload peters off quite a bit and you get paid decently. You'll never catch up to what your friends in IB are making, but you'll actually be able to have a social life. The real sweet deal, IMO, comes when you're comparing the senior-level guys. If you're good enough to make it to an equity partnership at one of the Big 4, you're set. You get paid like 500k-1m+, and you only ever have to do a little bit of selling. Land one or two big clients and you're set for 5-10 YEARS of 40-hour work weeks, as long as you don't fuck up. Wanna make money as an IB MD, and you're gonna have to constantly be selling and always be on the road.
If I could stomach audit work for that long, I'd totally do it. Couldn't hack it.
TL;DR: Nothing wrong w/ Big 4, has pros and cons. Depends on your goals.
As someone who spent 3 years in Big 4 audit, I agree with all the posters here. I am from the west coast (duh) and was not even aware of IB in college as very few took that route. From my experience:
Pros -Much easier to get into compared to IB. Due to size of firms and churn rate, there are so many opportunities to come in as an intern/1st year associate. Since there are Big 4 offices in every city, firms recruit from almost every campus (unlike IB) -Depending on office/industry, you get exposure to client management at an early stage. Within my first two years, I was dealing with client managers, VPs, and CFOs 1 on 1. Granted, the scope of my discussions were limited, but having exposure this early is beneficial. -As a poster mentioned above, your work with a wide variety of individuals. I was lucky enough to work with some extremely smart and ambitious people during my time at the firm. -Depending on your client and office, you can be working on significant areas early in your career. Smaller clients/teams force responsibility on you and give you exposure to complex areas. Gives you a good base understanding of financial statements and how transactions affect them. However, you could be on BoA and do only cash testing for your first 15 months.
Cons -Pay to hours worked ratio: Very poor. Come out of school making $50K with a 4% bonus (maybe) working 60-90 hours 4 months a year and 50 the rest. Compared to your private accounting peers your pay increases rapidly, but compared to IB it's a joke. -Easy to get pigeon holed into accounting only careers. Great for those who want to move into a controller type career, but if you really need to work to break the accounting typecast, especially the longer you stay. -Significance of work: this is one point that disillusioned me and eventually directly influenced my exit. Consulting helps strategy, IB helps creating value, hell even tax saves companies money, but audits are such a dirty word and we are for the most part treated as such. We are an expense line item, a check the box, an SEC forced regulation. Sometimes I felt the client valued my opinion and enjoyed having me there, but the vast majority of the time I could feel them counting down the days until we left.
Overall, I am glad I did my 3 years and made it until senior. I was lucky enough to move into a real estate role (non-accounting) after my 3rd busy season, and will be attending B school this fall. It seems BIg4 are a dime a dozen at Top 10-20 schools (disclaimer: doesn't seem like the best route to go M7/Top 10), but I believe Big 4 won't discount you for this tier.
I would highly recommend Big 4 to those not interested in IB/consulting. Make sure you have an exit strategy in mind. Whether it is FP&A, transitioning to TS, or moving forward with the controller route, just have a plan. It's crazy how many people I see that just stick around forever because they don't know what they want to do and get stuck in the Senior Manager role for years because they aren't partner material but couldn't figure anything else out earlier.
If anyone has any Big 4 questions feel free to PM me.
Okay, I said I was in education. What is M7/top 10? What is FP&A and what is TS?
-M7/Top 10 refers to MBA program rankings. A general top tier of business schools that includes Harvard, Stanford, UPenn, U of Chicago, Northwestern, Columbia, MIT and a few other schools. -FP&A is Financial Planning & Analysis. A route a lot of Big 4 alums take if they are trying to move out of accounting as it contains more finance aspects but having an accounting background is helpful to break into it. -TS is transaction services, a part of the Big 4 Advisory division. Moving from audit -> TS -> other finance job or B School is another popular route for those trying to break the accounting stigma.
Very informative. Thank you so much.
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