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Pursuing accounting and finance as a career can be difficult but rewarding. I'm here to share how you can succeed and grow in an ever-changing industry.
Stephanie Ng, CPA, CFO, and Finance & Accounting Expert
Types of Accounting Firms
In searching for the perfect career path, you should start with the basics. So ask yourself: whatt kind of firm sounds the most appealing to you? There are pros and cons to all the major types of accounting firms. But I'll cover these more at length on the site. For now, use this handy summarized guide to learn which types of accounting firms you can choose from.
Regional Accounting Firms
If you like working in a smaller office environment or are going to be living in a less populated area, working in a regional accounting firm may be your best choice.
Regional accounting firms are generally smaller and are frequently located in areas where there isn't enough demand for a large accounting firm. Consequently, they typically provide fewer services than a big 4 firm as well. While regional firms may have several offices across a geographic region, their footprint is generally small in comparison.
Regional accounting firms are known for paying less than mid-tier and big 4 firms. However, a lower GPA and little-to-no networking may let you still land a job, whereas this would be much more difficult in a mid-tier or big 4 firm.
Mid-Tier Accounting Firms
Unsurprisingly, mid-tier firms are larger than regional firms yet smaller than big 4 firms. Some notable examples are Grant Thornton, BDO, and RSM.
In contrast with big 4 firms, mid-tier firms have a smaller number of clients . Similar to the big 4, they may still have an international presence and offer large training opportunities.
Mid-tier firms sometimes compete with the big 4 firms for the same qualified accounting majors. And while mid-tier firms generally pay a bit less than big 4, candidates may elect to bypass the big 4 route altogether as job happiness is generally higher in mid-tier accounting firms. Also, mid-tier firms are important for big 4 candidates to consider as a potential option during the job-seeking process. This is because it can be difficult to land a big 4 job unless you have some impressive credentials and networking skills.
Big 4 Accounting Firms
The big 4 accounting firms (KPMG, Ernst & Young (EY), Deloitte and PricewaterhouseCoopers (PwC)) are the four biggest professional services networks in the world. They offer auditing, assurance services, taxation, advisory services, management consulting, corporate finance, and legal services.
However, audit is the core service line of the big 4. What does an audit team actually do? In general, the audit team reviews the financial statements of their clients and determines whether their financials are presented fairly and accurately. This is a very import part of any business and most large organizations outsource this to firms like those in the network of the big 4.
Combined, big 4 accounting firms perform more than 80 % of the public company audits in the U.S. and gross more than $100 billion in revenues annually. Therefore, it's easy to see why so many accountants want to work for them. Working for a big 4 will boost your reputation and your skills as an accountant. Furthermore, these jobs generally come with perks that you may not get at other firms, especially if you're just starting out in your career.
Before we talk more about how you can work for one of these big 4 accounting firms, let's look a little more into who they are. The first thing to know is that they are not actually individual firms themselves, but rather a network of member firms with locations all over the world. This is sometimes called a professional services network.
KMPG is a multinational professional services network, and part of the big 4. They are a global network of professional firms that provide audit, tax, and advisory services. As of 2018, they had over 200,000 employees.
KMPG stands for Klynveld Peat Marwick Goerdeler and it was chosen back in 1987 when KMG (Klynveld Main Goerdeler) merged with Peat Marwick. As you can see, they have been around for a long time. If you trace their history way back, you will find that it actually spans three centuries, under different names. You can learn more about their insights, industries, services they provide, client stories, and even their philosophy from their website.
EY (Ernst and Young)
EY, short for Ernst and Young, is headquartered in London, England. As of 2018, they reported over 270,000 employees. They were founded in 1989 in London and now have locations all over the globe. They were known by their iconic name, Ernst and Young for many years until they shortened it to just EY in 2013. Supposedly the reason for the rebrand was, “Shortening our name will provide consistency and ease of use for EY practices and clients around the world.”
They have some very famous clients such as tech giants Amazon, Apple, Google, and Snapchat. Furthermore, they also have engagements with General Motors, among other big names. Additionally, EY worked with the Pope to review Vatican City State's finances.
Deloitte Touche Tohmatsu Limited, commonly referred to as Deloitte, is another of the big 4 accounting firms. Again, they provide the same services - auditing consulting, tax ation, and more. In 2018, they reported over 285,000 employees. Many recent graduates choose Deloitte because it's one of the big 4, and they offer nice benefits, an opportunity for growth, and international opportunities .
It's hard to get hired at any big 4 firm but Deloitte reportedly has over 500,000 applications a year and only hires 4% of them. They have some big-name clients like Berkshire Hathaway, Microsoft, GM, Procter & Gamble, and Boeing.
You can stand to make a lot of money with Deloitte, with the average Analyst salary coming in at $76,239, but it's the prestige that comes with being a member of the firm that really gets people interested. You could get a job pretty much anywhere you want once you have a Deloitte on your resume.
PwC stands for PricewaterhouseCoopers, the last of the big 4, and another global network with firms all over the world. They were founded in 1998, making them one of the newer big 4 firms, and they reported over 250,930 employees as of 2018. They were voted Forbes #5 in American's Largest Private Companies of 2018 and in the top 100 for Best Employers for Women 2018 .
How to Become a Big 4 Accountant
If you want to work for one of these big 4 accounting firms, you need to know how to become a big 4 accountant. Obviously, you first have to be an accountant. You also need to earn an accounting certification, and the CPA is preferred. Some candidates worry that they must have a high GPA. However, a high GPA is not the only important factor big 4 firms look for in a qualified candidate. Subsequently, your CPA Exam status, networking skills, volunteering and work history are important too. Plus, your accounting club participation and membership is another differientation factor that could help you stand out with a lower GPA.
1. Start the Process to Become a CPA
First, pass the CPA Exam. (I recommend sitting for the CPA Exam under a state board that will allow you to sit for the exam with only 120 credit hours. This way, you'll be far more qualified than others who wait until they graduate to sit for the CPA Exam.)
2. Get Your Master's Degree
During or after you pass the CPA Exam, get your master's degree. This is going to set you apart from other CPAs and CPA candidates who have not taken that extra step .
3. Become a Big 4 Accounting Firm Intern
Next, you can try for an internship at one of the big 4. While big 4 internships are highly sought after and can also be difficult to get, it will give you a much higher chance of being brought in as a regular hire. Basically, the big 4 internship helps you get the foot in the door.
All major accounting firms hire additional help during the busy months. But, you'll actually need to apply for a big 4 internship as far in advance as 2 years before your expected graduation date. Then, when you get there: impress them, show them you know your stuff, and have a great attitude throughout. An internship is also a great way to find out if working for a big 4 firm is really for you.
Some people like the idea of working for a big 4 accounting firm because of the perks and prestige, but upon trying it, they may find out it's not really for them. Think of your internship like a "test drive" and a chance to learn a lot of things hands-on.
Now that you know more about the types of accounting firms, you can make your own decision about working for one. And if you decide to, it's never too early to start planning your career path. While this site mainly focuses on big 4 firms, I also cover all the other accounting types firms too.