Big 4 is the dream for many aspiring accountants, but this may not be an ideal job for your long term career.
Let’s take a look at the pros and cons of Big 4 vs small firm and make an intelligent decision for your accounting career.
Big 4 vs Small Firm: Specialist vs Generalist
At Big 4, you work on big clients most of the time, and are staffed on big teams. As a junior staff, you will be specialized in a specific part of the audit, e.g. fixed assets.
At a small firm, you work with smaller clients, and junior auditors can see an audit from beginning to end.
The nature of clients and staff arrangement leads to the following pros and cons:
Big 4 Accounting Pros
1. Working with the Biggest Clients
You get a great exposure in many aspect as a first-year associate in Big 4. The breadth and the quality of client base is unrivaled so you can get your hands on some complicated situations and learn how to deal with them with the help of seniors.
As you progress, you will be exposed to companies in many different industries. If you perform well and people generally like you, you can tailor your career within the firm and gradually move towards a specialized industry.
2. Good In-House Training
Big 4 have the resources to provide numerous in-house training for junior accountants. It begins with a 1-2 week national training for new hires, then regular training and online webinars on special topics afterwards. These classes are free and most helpful for your career development and for fulfilling the CPA CPE requirements.
3. Best Way to Get Your CPA Title
Speaking of the CPA qualification, Big 4 will help you get licensed quickly. The firm offers Becker for free, or reimburses another review course if you’ve purchased that already. After passing, you get the CPA bonus. You will also have no problem getting your work experience verified by your manager who by default is an actively licensed CPA.
4. Unrivalled Exit Opportunities
Whether you want to stay in Big 4 or move on to industry, this experience is seen as a seal of approval from a resume perspective. The halo continues to glow in the new company as people generally give more respect to those with previous Big 4 experience.
Big 4 Accounting Cons
1. Higher Pressure with Longer Hours
The Big 4 serve the biggest corporations in every industry. It is understandable that the clients’ demand and expectation is higher. This basically means that you, as part of the Big 4, will need to work hard to deliver the product, and extra pressure to make sure the product is among the best quality.
Many accountants find it overwhelming, but some perform better a high-pressure environment. In any case, this is an important point to consider.
2. Up or Out
Big 4 is not a place for someone looking for easy lifestyle. Staying in one level and not moving up is simply not a career choice. That’s why many Big 4 accountants end up leaving the firm despite all the attractions mentioned above.
3. Got Stuck with Single Client
Depending on the nature of clients in your office, you may spend more than 80% of your time on one single client. This client is large and high-profile, which is great if you plan to stay and move up the hierarchy in Big 4. However, if you prefer variety, you won’t like it because the large client swallows up most of your schedule and you have less exposure to other companies and industries.
4. Feeling Lost at a Large Firm
The Big 4 accounting firms have grown so big that you probably don’t know people outside of your department. Also, in terms of client servicing, given the size of the clients and the audit team, you might get stuck with mundane work for the first couple of years.
Small Firm Pros
1. Close Knit Group
Regional and local CPA firms are often smaller, so it is easier to develop a close working relationship with the partners. Also, the fact that the audit teams are much smaller so you will have more chance working directly with the partner vs Big 4 where your supervisor will be seniors and managers.
2. Steeper Learning Curve
Since you don’t have the luxury of formal training, you learn at your feet, at the client’s site. This is a steeper learning curve and can be exciting and satisfying.
3. Less Pressure
Because your clients are likely private companies, you don’t get the pressure from deadlines and complexities from the publicly listed companies that the Big 4 are getting. This usually translates to better hours and work-life balance.
4. Great Help in CPA Exam Prep
Accountants working in small firms have the chance to perform the entire audits alone, and do tax during busy season. Your practical experience covers the vast majority of FAR, AUD and REG, which is more than 75% of CPA exam content.
Small Firm Cons
1. Less Exposure
In a typical regional CPA firm, the client base is smaller and you get less chance to develop broad base of experience. This could mean frustration if you get stuck in an industry you are not interested in.
2. More Politics?
Competition to move up the ladder can be tougher/slower than in a large firm. Your assignment and promotion is decided by a handful of partners and this could be very subjective and sometimes unfair.
3. Less Pay
I guess it is safe to assume that Big 4 can afford to pay more than the smaller firms. The starting salary is typically a few thousands less, and they may not offer bonus after passing the CPA exam.
What Do People Think?
People are generally well aware of the benefits of working in Big 4 accounting firms. Therefore, I would like to highlight the opposite — how local and regional CPA firms could be attractive. Here is a testimonial from an accounting graduate started at a small firm:
Yes I think it is better to start out with a smaller firm than a larger one simply because you will get a better chance to get to know your co-workers better and nothing will be a rush. You will also get to learn more about the career you chose with the one on one rather than being thrown out in a sea of sharks.
I know because I have work[ed] for a small company with at least five other people working under me . It was better for us because we got to know each other and what was expected of each one of us without all the drama.” – Pearlene
Here is another supporter for small firms:
Joining a small firm always helps in gaining more experience faster. In the larger firms, the work is distributed into smaller chunks between more number of employees and so you get to gain experience in just one small area.
In smaller firms since they do not have the luxury of a large pool of employees more work is distributed to small number of employees. So the breadth of learning is quite high. Survival in the initial days will seem to be difficult but over a period of time, you get to learn more and handle stuff yourself.
One good way to cope up with difficult situations is to ask someone to mentor you (not train but mentor) so that you can go to them and talk about the problems you faced. They can in turn give you valuable advice in terms of managing such issues.
Another way is to network with as many seniors as possible and try to learn without eating into too much of their time. And once you gain experience, you will be surprised at how well you will be able to guide freshers.
But there is a downside to all this. Because your experience is only through field work and without proper training, sometimes the learning will be haphazard. But the pieces will fall into place in the long run. During your free time, you can also google on stuff which you were stumped about in case there is no one to help you out.” – JD
What Do You Think?
I’d love to hear your thoughts. Please share your view in the comment section below.