[Anonymous]

I need some advice for my current situation. I have been working as a senior Financial Analyst in a mid-size public traded company for one year now. I was a controller for a small private company for 5 years. They are both manufacture type companies. I had to quit my old job because my husband relocated with his job. When I interviewed with the current job, my boss told me that public traded companies have more to offer compare to private companies, so I have a lot to learn here. I was excited about all new stuff that I could learn. However, the reality is my job is not challenging at all. In this company, things are not handled in effective ways. Most people only care about their personal responsibilities (no team work). It’s hard to give upper level management recommendations too. No one likes changes here.

Right now there are two senior managers quitting their jobs after 10+ years working here. I thought it’s a good opportunity for me to move up. However, the CFO only want people who have audit background because he came from big four. Although I have CPA/CMA/MBA and very strong background of cost accounting, I don’t see myself moving up the ladder soon here. I wonder if I need to get audit experience in order to move up in all public traded companies. I am about to have a baby in May, so I don’t know if I can work as an auditor any time soon due to overtime and travel requirement. Should I go back to private companies after this year? I am very passionate about cost accounting. My goal is the controller position for a large public traded manufacturer. Do I have any chance to achieve this goal without having big four/audit experience? Many thanks!!!

[pg2324]

I honestly believe that audit experience is overrated. By overrated, I only mean that the actual technical knowledge/skills you gain from performing audits is overrated. Especially if you’re some 23 y/o kid who did their 1-1.5 years @ Big 4 and then left for private after they got licensed. How much experience can you get in your first year when you are just out of college with no real prior experience and mostly make it through by following PY workpapers?

One of my co-workers worked at Big 4 for about 2 years. All he did for his entire first year was bank reconciliations. He would hop from engagement to engagement JUST to do the bank recs and then move on. In his second year, I think he worked mainly with AR or AP. We work together at a small public accounting firm now and I can tell you without a doubt that he doesn't possess any greater accounting skills or knowledge than I do and I have never worked at Big 4 or top 10 firm.

If people want to say that working at Big 4 shows you have a strong work ethic, ok, I'll definitely give you that. But again, most people I have spoken with and read about on this forum seem as though they were completely lost in their 1st year at Big 4. The work you do as a 1st or 2nd year associate, like tracing, sending out confirms, going through disclosure checklists, SALY….doesn't have much relevance in private, IMO.

If you work on several audit engagements for a particular industry and then you go to work in that industry in private, I can see an advantage there.

So yes, audit experience absolutely DOES help immensely as far as perception is concerned (which is really all that matters, unfortunately). Even though I believe it to be overrated, most of the people doing the hiring don’t. I see a ton of job postings for controller, accounting manager, even senior accountant positions that require (or prefer) experience in public accounting. I’ve seen some listings that say public experience required, but ‘CPA a plus.’

[fuzyfro89]

If you have 5+ years of experience, it probably will NOT be helpful to start over in audit (which you will have to do, since people without audit experience typically start as staff 1/2 level.

Don't take what your boss says as if it's gospel. There are many bosses in both public/private who think differently.
“I don’t see myself moving up the ladder soon here. I wonder if I need to get audit experience in order to move up in all public traded companies.”

You may not move up, but that doesn't mean you should not put your resume out at new companies (both public and private). There is nothing inherently better about a public/private company. There are large private companies that operate similarly to public companies (in terms of controls, structure, reporting, etc.), and many public companies which are so small and run like a startup (or just a non-sophisticated approach to accounting/finance).

Find the right place for your personal/work life fit, career goals, and everything will fall into place. Many people will say “no” to you in your career. Don't believe all of them.

A Sr Mgr at my former big 4 firm told me it wouldn't be possible to get onto a restructuring project… I reached out to the partner and he got me on it.

That same Sr Mgr told me I shouldn't expect more than a 8% raise for my promotion to senior, and that I couldn't get much more if I left the firm. I left and got into internal audit for a 30%+ raise.

Many people told me auditors could not switch to a financial analyst role due to lack of finance experience… I passed level 1 of the CFA and networked my butt off to move internally and got a promotion to boot.

In my short 4 years, there was someone saying “no” at every turn, but don't let that stop you.

[Anonymous]

thank you pg2324 and fuzyfro89. I kind of feel the same way about overrating audit experience. I did tons of hands on duties in AR/AP/Payroll/Purchasing/inventory control/redesign cost module in my old job. I learned so much through actually performing the work and making mistakes too. I don't see auditors go that deep to solve accounting and management process problems, don't mention about people management skills. I shouldn't lose my confidence yet. thanks again!

[acamp]

“One of my co-workers worked at Big 4 for about 2 years. All he did for his entire first year was bank reconciliations.”

This probably speaks more to the person's skill set within the firm. Me as a first year, nor any of my staff currently do this limited amount of work. Most first year's are doing, Cash, AP, Inventory (if no significant reserve testing), Prepaids, PP&E, Operating Expenses, Basic Revenue, etc. Doing nothing but bank recs and bouncing around a lot is definitely not the norm.

While you can certainly develop your skill sets without public accounting experience, there tends to be a better understanding of what the auditors are trying to accomplish when the controller comes from a public accounting background (in my opinion). Saying things like “I don't see auditors go that deep to solve accounting and management process problems, don't mention about people management skills” highlights the fact that you have not seen what goes on behind the scenes. Nearly all complex accounting considerations are reviewed and considered by the audit senior, manager, partner and reviewing partner and might even involve consultations with the office practice leader or the firm's national office. In terms of people management skills, I think this varies from engagement to engagement, depending on who is running the job, the amount of personnel turnover, scheduling conflicts, etc; it might not be something to bag on the auditors over as it can be an inherent difficulty in public accounting.

With all that said, I'm not trying to give career advice, just bringing up some counterpoints to the ongoing discussion 🙂

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[Anonymous]

@acamp. That's a good point that I might have ignored the problem solving process behind the scenes. Do entry level auditors get the chance to get involved in this process or they only hand the tough questions to higher level people like senior managers and partners? I think if I apply audit jobs in big four, I might have to start from entry level.

[acamp]

Well it depends. So lets say you go into public and start as a first year. You likely won't be given terribly complex topics to begin with. That said, given your background you'll have a leg up on your peers and if its within your capacity can raise your hand to work on more complex areas.

There may be a disconnect though between your current skill set and what it needed to audit these more complex areas. Take an inventory reserve as an examples. As someone from industry you could probably develop a good model to create an allowance for inventory. Say for slow moving inventory you reserve 50% of all product on hand that exceeds 2 years worth of inventory (Inventory on hand divided by current period sales). You base this on historical trends from your Company. Now the audit perspective:

While historical trends are great:
-Is a blanket 50% reasonable, should they be reserving 25%? 75%? 100% of all slow moving inventory, or differing by product class?
-Is a 2-year threshold reasonable? Should it be 1 year, 3 years, etc?
-Are there other considerations that might impact this analysis; technological, consumer trends, upcoming replacement products or other factors that might result the inventory selling faster or slower?

My point is nitpicky audit perspective will likely be a new skillset for you which might prevent you from taking on super complex audit areas in your first year lol

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[fuzyfro89]

“Do entry level auditors get the chance to get involved in this process or they only hand the tough questions to higher level people like senior managers and partners?”

Audit CAN help you, but I've seen just as many people leave audit who can't really solve problems. They can regurgitate information (accounting treatment, code sections, etc.) but can't really think critically and make structured arguments (written and oral). That is the true POTENTIAL benefit of audit… learning how to structure your thinking and think through risks. The work itself is very basic once the strategy is set (matching purchase order, requisition, and receiving docs), but risk identification and process understanding is where it takes a higher level of thinking.

Working in public is just as much about learning some of these things as it is about PERCEPTION. Some people (not all) perceive former big 4 auditors as superior (right or wrong is an irrelevant discussion), but at the end of the day, if you have the skills, the only gap is for you to learn how to sell yourself and get noticed by the right recruiters and hiring managers.

If your current company doesn't value your expertise, that's fine. Find a place that does. It may not be easy, but can certainly be done.

The questions you should really ask yourself:
– Do I understand controls (both testing and also how to design them in a new process)
– Do I understand accounting/process risks
– Do I understand the basics of financial accounting

If you answered “yes” above, then your gap is not audit experience, but finding a place that will value your skills and give you the chance to demonstrate. So, get to networking and interviewing!

[Anonymous]

@ fuzyfro89: “The questions you should really ask yourself:
– Do I understand controls (both testing and also how to design them in a new process)
– Do I understand accounting/process risks
– Do I understand the basics of financial accounting”

My current job duties actually include internal control testing (SOX test) twice a year, fix control problems, update US and international accounting policies and procedures. However I do have a template from internal control department to follow when I do control test. I assume external auditors do more analysis on their test? Our PwC auditors told me that they actually have some type of template too based on the client types. But you are right, I should talk to some good recruiters and network more. There should be some good opportunities fit people like me 🙂

[pg2324]

@acamp: “Nearly all complex accounting considerations are reviewed and considered by the audit senior, manager, partner and reviewing partner and might even involve consultations with the office practice leader or the firm's national office.”

I have no doubt that as a manager or partner you gain a great amount of experience involving complex accounting issues. My entire point was solely geared towards the people that only reach 1-2 years in public, which just happens to be a very large percentage. As you stated, managers & partners are the ones who plan the audit, determine materiality, discuss complex issues with management, determine level of testing and what gets tested -1st & 2nd year associates do not (I've never worked in Big 4, just going off of stories from other people).

And since the majority of people who work in public leave within 1-3 years, most of these Big 4 workers going into private did not perform the complex work you described. I have seen plenty of people here on this forum who did their ~1 year at Big 4 and left for private. Just that ONE year will still make a huge impression on employers, an impression that I personally believe to be exaggerated. If you stay 4-6 years and make manager, that is a different story, IMO.

Either way, I just prefer GL accounting over audit. I feel like a lot of the audit work I do (small clients) is just checking other peoples work when really I'd just rather be the one doing the work in the first place…..not the one testing it. Anybody else feel this way?

[Anonymous]

I was going to quote the same line pg2324 did, and says probably about the same thing. The reason I never thought seriously about going into audit is that from what I could tell, it was the manager, partner, etc., who did all the “fun stuff” – the thinking through, analyzing, and solving problems. Until you put in a few years, the work was just fairly menial. So, when I see job postings that say “2 years audit experience required”, and when all I hear of the first 2 years of audit is that you looked at a list of AP invoices and made sure the check name matched the invoice name, or looked at a bunch of bank recs and made sure they balanced, then if they balanced just handed them to a senior person and went on to the next thing, I kinda go “OK, and 2 years of that is required because…?” To prefer experience above that level – at the level (whatever exactly it is – manager or senior, depending on the firm, from what I've gathered) where analysis and decision making are done, where audit planning is done, etc. – makes sense to me. But to just want the Big 4 sticker for someone who did nothing but say “Uhhhh does 1 = 1? Oh, yeah, it does, OK on to the next thing” never made sense to me.

I'd rather have someone with 1 year of experience from a small audit firm where the whole audit team might be 5 people, so they've seen all types of audits, and they've been one of 5 people total on all those audits, so they've at least heard most of the discussions and picked something up. 😐

I like the concept of audit work at the higher levels. If I realized when I was a new grad what I do now about how different audit could be in a small firm compared to what I hear about from the big firms, then maybe I would have given it a try in a small firm to see if maybe as part of a small team I could've done more than just boring work in the first 2-3 years. But, it would have never been my long-term plan (more travel than I prefer), so something that required 5 years before the work would be interesting wasn't something I wanted to get involved in….and since most auditors work for large firms where, from what I can tell, it takes several years to be work that I would find interesting, I just skipped audit altogether.

For the OP – audit experience is preferred for Controllers for a lot of public companies. Is it absolutely required for all? No, but it is preferred by many. It's less preferred in private companies. If you're set on working in public, than having gotten some audit experience when you were first entering your career would have been very helpful, but I really don't think it would be worth going back to be an entry-level auditor now just to get it. I'd just keep my eyes peeled for an opportunity for advancement without the public experience. It might take longer to find, but it's out there. Also know that some that say they require public won't really require it for the right applicant, so there's no harm in applying to them anyway. Your current boss may be hung up on it, but that doesn't mean all of them are. I've also seen some bosses use some official requirement as an excuse when in reality they just don't want to promote you for some other reason. I was in one situation where I was a sub-manager and a person quasi-under me really wanted a job that was a step up, and the upper manager refused to let her have it, citing an official requirement for the position which she didn't fulfill. Truthfully the upper manager wouldn't give her the job anyway, cause the manager didn't think she could do it, but never was the employee told that. I think this is a very unfair way to treat employees, but unfortunately I couldn't do anything about it (and eventually, she got the job and did it wonderfully, so the upper manager was wrong about her ability anyway). However, it could be that even your current boss isn't really hung up on the audit experience, but just has a chip on his shoulder and for some reason doesn't want to put you in that job, so can use the audit experience as a convenient excuse.

[JEQueen]

Hello,

I have worked for both private companies and publicly traded companies and from my perspective I think every CFO/person that has a strong influence on who will move up will have some sort of preference that you may or may not fulfill. In other words if it is not audit experience with the big 4, it's experience with some huge consulting company like Boston Consulting Group because they worked there and love the perspective people bring. Or the person could go as far as preferring people with at least a certain number of years in a certain industry for whatever reason.

Either way, based on how you described the environment, it sounds like you are not happy there. You sound like you want more of a challenge. While public companies do offer different challenges that private companies may not have, you can still find a meaningful and fulfilling career elsewhere. I honestly believe you would be better off looking somewhere else because with your experience and credentials, there is no reason to set yourself short in an environment that lacks the encouragement and challenge you need to succeed and be happy. I have yet to meet more than a couple of people that actually enjoy cost accounting so with an attitude like yours, I think you deserve better .

Good Luck!!!!!

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BEC-70,70,73
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AUD-1/9/2016

[acamp]

My points address two different topics and should not be combined:

1. A first year doing nothing but cash is well outside the norm (which pg2324 brought up)

and

2. That significant accounting issues are not adequately scrutinized (which cleverfairy brought up).

As you'll see, I note the chain of review as beginning with senior which suggests that someone in their first couple years would not be involved. I agree that in one's early years, it is less likely for them to be involved with significantly complex topics.

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[Author]

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