A Counting School - Hardcore Chartered Accountancy

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Big firms versus smaller firms - which should you choose? When do you leave? Should you?

Much ink has been spilled, and electrons zapped, discussing the merits of working at a Big Four firm versus smaller firms. To get started, check out a post by the esteemed Steve McIntyre-Smith who writes about the upsides of working in a smaller firm.

To brutally paraphrase his argument, if you want to be an accountant who helps small and mid-sized businesses with their numbers, it's the way to go to get experience doing the nitty gritty technical experience that they'll find indispensable.

His post is aimed not at students, though, but rather at CAs who are looking to sell themselves to smart students looking for work. As a result, he of course doesn't spend much time on the Big Four side's arguments, because to those with experience they're well known.

For the sake of my many readers who are still in school or about to start their first big time jobs, in a nutshell the upside to the Big Four side boils down to the fact that you deal with Big Audits, and the associated prestige that comes with that. Travel is more common, and the resources you have to support you (from in-house UFE prep programs, to related training) are much stronger. Plus, large firms mean big groups of people your own age, since a few hundred people get hired every year at your own rank - so if you lost touch with your university friends, you won't have trouble meeting new people. Don't overlook that "Big Audits" reference, either. That refers to audits of big huge multinationals. If you'd like to work for one of those one day, this is a good way to get started down that path.

 

Conversely if you hate large groups - some compare the experience to high school, except with smarter and more mature people - then a smaller firm may be just what you want. You may be the only new kid, or one of less than a dozen depending on how small, exactly, your smaller firm is.

Because smaller firms deal with local clients, travel is less frequent, and to less distant locations. Depending on your preferences, this can either be a Good Thing or a Bad Thing.

If this were a UFE case I would make a complete, neat list of arguments and point in one direction or another, and make a conclusion. In that spirit, all else held equal, go for the Big Firm.

Why?

It is generally a little tougher to get into them, and they still have excellent reputations that'll take you far. And if you decide you prefer pure "accounting" over "audit", which is where they specialize more heavily, you can always apply to work for smaller firms, who will invariably be very pleased to have you join them. Or if neither of those directions appeals to you, the Big Firms have many specialized departments that you can consider picking from.

Keep in mind that upon transferring you'll have to learn a whole bunch of new things that you never did at the Big Firm or didn't have to do at the Smaller Firm, just due to the nature of the client mix and size of the audits.

Switching: easier than passing the UFE

I will say, however, that you shouldn't stress out too much over whether you end up here or there. With a few years of experience under your belt, you'll hear from people. If you want to switch, having your CA - or having successfully written your exams, anyway - will make it easier for you to find a new job in a different company.

I've seen people leave both big and small firms, to try out the "other side". Some stuck around and were pleased with their new arrangements.

Others decided what they really wanted was to go into "industry" - lingo for any non-CA-firm job.

So remember the first trick is to get yourself hired. Be as picky as you can afford to be - i.e., decide which type of company you'd like to first try. If it works out, wonderful. If not, Steve argues that it may be tricky to come back from industry to "the profession." I will defer to his wisdom - he's been around a lot longer than I have, so it may in fact be tricky to make a complete shift back. But I've seen people do it as well, so although it may be difficult, it's not impossible.

Steve has only written a few articles on his site, but they're filled with some interesting ideas - worth checking out. He's also had some writings published, including this article published in the Bottom Line on the topic of staying versus going.

Worth a read, especially when recruiters start calling you and you need help deciding what to do. The example is a little "too perfect", though Steve doesn't apologize for the scenario, given that he strongly favours the Profession.

One of the more interesting hidden points linked with his argument that you'll do better in The Profession than in Industry is the subtle statistic showing the inflation in salaries over the past ten years.

What he cites as decent pay for someone with a mere three years experience a decade ago, is now considered average starting pay.

Not bad.

Though it makes you wonder what the true inflation rate in the general economy has been through all these past few years.

Comments

Lorac said:

Do you know when the new rules of ISA is to come into effect? There are alot of articles about the high cost of these changes, if each company have guidelines to follow to implement these new changes, why are the companies incurring so much cost? The companies already have to follow guidelines (GAAS)anyways, what is the big deal to change the rules alittle bit?

# July 31, 2008 2:19 PM

Krupo said:

Depends on which country you're asking about, Lorac.

The cost of changes involves converting your business processes and supporting computer systems to follow the new rules.

This can either be straightforward, or a wicked-horrible headache.

# July 31, 2008 9:38 PM