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FYI,
* Learning Perspective *
I definitely recommend working at a small- to medium-sized firm when you are working towards your designation. Not to offend people from the Big 4s but I found people from smaller firms have better technical skills and a breadth of accounting knowledge. All my friends with similar backgrounds agree with me. At small firms, I got to do everything from inputting the trial balance to bookeeping for the clients (ie Notices to Readers) to making adjusting entries to tax returns preparation. At the Big 4, all I did was auditting, writing memos, and doing zillion checklists.
Just to give you an example. At small firms, we always look at the meals and allowance GL a/c, as for tax purposes, such expenses are only 50% deductible and some expenses are disallowed. People from the Big 4 won’t catch anything like this, as tax is handled by the Tax department, so the Audit staff don’t have a concept to look for such a possible error.
A lot of times when I asked my coworkers at the Big 4 how to account for a transaction (ie what’s the Debit and Credit), they couldn’t tell me. Whereas my coworkers at small firms could tell me right away.
The clients at Big 4 are so big that they are too knowledgeable. They know everything, so they would have a schedule supporting every calculation. As such, it boils down to referencing exercises for the auditing staff. Whereas at small firms, sometimes the client’s records are so messy that you will make 20+ adjusting entries for them. By doing so, you consolidate your technicals and grasp the concepts much better.
The clients at Big 4s are so big that you only get to do certain sections of the file (doing the Cash section can take you a week!), whereas at small firms, you have a way better big picture, as you get to do a lot more sections — especially if the audit team is small meaning you need to split up the whole file between you and the senior.
When I worked as a senior at the Big 4, I felt really bad assigning sections to the juniors, as they only got to do stupid stuff like tieing the F/S, downadding the leadsheets prepared by client, cash reconciliations, control testing, etc. I totally couldn’t see myself spending 30 mths (to get my designation) working 60+ hours for at least 5 months in the year to do stupid stuff like these, which any non-accounting people could do.
* working hours *
No doubt the hours will be way better at small firms. You only need to hit 55+ hours during the personal tax season, which spans from Mar to Apr. At Big 4, you have no life. No kidding!!! The latest I had ever worked was 12 midnight but my friends made a record of working till 2am and 7 days a week.
stress *
In terms of stress level, it’s hard to say. Accounting in general is stressful. Too bad you have already gotten you MAcc ‘coz I’ve been telling people it’s a wrong profession to get into
— long hours with low pay! Anyway, at small firms, the assignments are small and usually take a few days to a max of 2-3 weeks. No surprises, clients are never ready, so you got to clear outstanding (o/s) items on the previous jobs after you have moved onto new jobs. I remember having 4 files o/s at one time! At the Big 4, it’s not so much about overlapping but it’s the high turnover, short-staffed, and tight deadline combo. High turnover means for every job I worked on, the staff who did it last year were gone, so if I had questions, I would be stuck and felt very frustrated. I remember for one client, it’s so ridiculous that everyone from the junior level to senior (ie myself) to senior manager and even the partner is all new! When I approached the senior manager (it’s so short-staffed that we didn’t have a manager on the job ~sigh) for questions, she replied, “I don’t know, as I’m new to the job. Go ask the client.” The client was very annoyed, complaining how they had to explain the same things over and over every year. You get my point? Honestly, I caught a lot of errors made in previous year’s audits when I worked at the Big 4 (guess that’s how Enron came around ). I couldn’t blame anyone, as there’s no magic… the quality of work deteriorates given time constraint and massive volume of work. I myself was giving up my perfectionist trait after working there for over a year. You really do get sick of work and develop a “who cares” attitude! Imagine you coming in fresh taking up my file after I left the firm, I’m sure you will be cursing me doing a poor job last year .* office politics *
No doubt office politics is something you have to expect when entering the workforce, especially in the business field. But this is VERY prevailing at the Big 4. If you aren’t a good player, you may hate the environment. For sure, being a bad player won’t affect whether you get promoted or not (I mean at levels below managers) ‘coz they need people! But if you don’t suck up, then you would get an average rating, so your pay would fall behind the good players at your level (there’s a salary range for each level, depending on your job performance/rating) and you would possibly be given unfavourable jobs.
At small firms, it’s hard to be promoted when the people more senior than you stayed. That’s what happened to me. When I got my designation, I wasn’t promoted to a senior because my employer told me there’s no room for growth.
* pay *
Small firms could actually pay more than the Big 4s at levels up to senior manager (talking about a $10K difference). But if you were determinated enough to become a partner, so doubt you will earn a whole lot more at the Big 4s.
To me, what’s important is not the gross pay but the hourly rate. Even if you get paid more at the Big 4s, the hourly rate could be close to minimum wage or not even
.Career Advancement – the Big name & networking myth*
Don’t get me wrong, there are definitely pros working at the Big 4s. First off, I wouldn’t get my current job if I didn’t work at a Big 4, as my current job requires control testing skills, which small firms won’t provide. This is because the clients at small firms always have segregation of duties issues which preclude us from relying on internal controls and hence, a substantive approach is used. Secondly, I’m in the financial field right now, which is an industry only the Big 4s would cover.
No doubt the big name has caught the employers’ eyes but it’s not a necessity, at least not this year. There’s a great demand for CAs in the economy this year. In less robust years, having a big name would definitely increase your market value. Some of the job postings specifically ask for candidates from the Big 4s.
BUT don’t rely on getting connections with clients, as independence rules preclude us from working for clients that we have audited in the past year. Who knows what’s going to happen several years down the road? I’m assuming you are still working towards your professional designation. By the time you are ready to head out to the industry, the rule may become two years or more. One can argue you can still work for a client after a year but who would remember you a year from now?
* Big 4 Restrictions *
Another factor to consider is your investmenting/financial plan. Working at the Big 4s, you will face a lot of restrictions as to what you can invest. I couldn’t buy some products for my RRSP plan ‘coz those are my firm’s clients. A coworker was pulled out of a job because his wife had a loan with the bank that he’s auditing. In this situation, if you really want to be on the audit, you would need to pay off the loan, which may not be feasible.
* Freedom & work environment*
I found working at a Big 4 gave me more freedom in the sense that you can come in at 10am without anyone knowing. What’s important is you get your work done.
You can be late without being noticed because people just come and go all the time… in and out of meetings, going for coffee breaks, sitting on a different floor when your own floor is full (yup, there’s no fixed desk at the Big 4s, as opposed to working at small firms)… There are so many people on the floor and so many new faces due to the high turnover that I was asked if I was a new hired after I was there for half a year. It’s not uncommon at the Big 4s that you will be out of the office for several months, so you only get to know people who have worked with you. The partners hardly know your name. This is a complete opposite of working at a small firm. I remember I needed to call in from the client sites and tell the receptionist that I’m going out for coffee breaks/lunch…
Last words *
In summary, I would definitely recommend working for a smaller firm when you are getting your charter and work for a year or so before heading out to industry.
I’m currently working with someone who was raised at a Big 4. I’m one level below him though we are of the same age. The reason being he has more financial audit experiences than I do. I would imagine we are around $10K apart. But I didn’t regret taking my path. For the “life” he had sacrificed in the past, he certainly deserves it. Coming from small firms, with a 15-month stay at a Big 4, got me to a position similar to someone with 45-month Big 4 “no life” experiences, I don’t see a point torturing myself right from the beginning.
One thing to remember is there is no right or wrong answer. What’s important is not to compare with others but to choose something you really like and will not regret. Think long term and don’t lose sight.
If you are after money, stay in a Big 4. If you want to move out to the industry later, go for small firms now and move into Big 4s when you are ready to move out. When you are with a Big 4, don’t quit after a short stay no matter how unbearable life becomes, as it doesn’t look good to be a grasshopper. You need to remind yourself your hard work will pay off in the near future.