The U.S. Bureau of Labor Statistics estimates that the median pay for accountants and auditors is $77,250 per year. But if you’re working at a top accounting firm, you’ll make much more. From trendsetting to improved career growth, there are many benefits to working for a Big 4 firm.
Who are the Big 4 Accounting Firms?
The Big 4 are considered the top accounting firms in the world and include names like:
- PricewaterhouseCoopers (PwC)
With headquarters in New York City, New York, PwC has amassed $50.3 billion in revenue, nearly 300,000 employees, and is located in over 155 countries. PricewaterhouseCoopers merged with Coopers & Lybrand in 1998.
Founded in 1845, Deloitte is the oldest still-existing accounting firm on the list. In 2022, they earned a global revenue of $59.3 billion, employ 330,000 people, and are located in over 150 countries. You can find their headquarters in New York City, NY.
When Arthur Young & Co. and Ernest & Whitney merged in 1989, Ernst & Young was born. Similar to PwC and Deloitte, their headquarters are in NY. They boast a revenue of $45.4 billion, 300,000 employees, and locations in 150 countries.
Formed through a merger in 1987, KPMG is the only Big 4 bank located in Culver City, California. KPMG is located in over 155 countries, has 227,000 employees, and has a 2022 revenue of $34.6 billion. They are the least popular of the Big 4.
While the Big 4 offer many of the same accounting and auditing services as other banks, what sets them apart from other businesses in their field is their power in the sector. Not only do they employ the highest number of financial professionals, but they also earn record-number profits.
Before the 80s, the Big 4 were the Big 8, but through merges, only 4 remain. Together, the Big 4 firms make almost $200 billion a year, proving their massive wealth and influence.
5 Things Everyone Should Know About the Top Accounting Firms
For most accountants, the Big 4 accounting firms don’t need an introduction. But if you’re a new graduate who’s interested in applying to one of these companies, here’s what you should know.
#1 - Top Accounting Firms are Known for Long Hours
Large accounting firms are known for their grueling hours. While this was true in the past, the work environment in these firms has improved, and they’re taking strides to be even better in the future. No one should put up with poor work conditions, even for a decent career boost.
#2 - Top Accounting Firms Expedite Career Paths
In the past, many accountants felt that the harsh work conditions were worth it because working at a Big 4 firm proves credibility. At a Big 4 firm, accountants gain experience faster and can network with high-profile clients. This can make it easier for them to find other employment.
#3 - Top Accounting Firms Only Except The Most Qualified
To get hired at a top accounting firm, you need to have a degree from an accredited program. They prefer to choose people with an AACSB accreditation, which is only available at certain schools. They may also request a master’s degree (MBA) and a CPA or CFA certification.
#4 - Top Accounting Firms Offer Professional Development
Top accounting firms intend to hire and train the best of the best, but that doesn’t stop after the employee is onboarded. The Big 4 will offer plenty of additional courses and seminars that help keep their staff up-to-date. These firms put a lot of investment into their employees.
#5 - Top Accounting Firms Offer Sky-High Salaries
All of the schooling and experience you had to obtain is more than worth it in the end if you get hired at a Big 4 company. Even associates get paid $53,000 a year at the minimum, but as you move up the ladder, you’ll earn 6-figures. Partners make a quarter of a million a year or more.
In Conclusion…
Top accounting firms PricewaterhouseCoopers, Deloitte, Ernst & Young, and KPMG are the most prestigious firms in the United States. With that status comes a high salary, plenty of connections, and impressive career growth if you manage to land a job inside their walls.
Steve Cox, Head of Accountancy at IRIS Software Group, shares his thoughts on MTD and its implications with Finance Monthly.
HMRC’s prompt decision to delay the next phase of the making tax digital (MTD) rollout in 2020 due to the coronavirus was a welcome move. This now means any businesses who were expected to put digital links in place last year must have this done by the rapidly approaching deadline of April 2021.
Added to this, from April 2022, all VAT-registered businesses will be expected to file their tax returns digitally regardless of their turnover - which was a limitation in the previous phase. For many businesses, this requires a substantial amount of work if the bookkeeping is done manually, on paper records or even not at all, adding to their already full plates as they look to rebuild following the on-going challenges borne from the pandemic last year.
Accountants naturally have a critical role to play in supporting businesses through this next phase of MTD. So, it’s important to have a clear understanding of what needs to be done right now and how to make the transition as simple as possible for clients.
Actions to take now to meet MTD
The first port of call is to evaluate all clients who must comply with MTD before the phase 2 deadline, and review the MTD template built for the first phase. This will help establish a clear strategy of what each client needs to do. Accountants should then begin the transition preparation - communicating with clients about their exact financial positioning, workflow, filing and how to approach switching to digital records.
The first port of call is to evaluate all clients who must comply with MTD before the phase 2 deadline, and review the MTD template built for the first phase.
This is where it is important for accountants to think smart as MTD is a volume play - in both clients and data - when it comes rolling out across a large portion of their client base. One tool that is incredibly valuable and available from software providers, including IRIS, is record digitisation which enables anyone who needs to track receipts, capture photos and digitally process receipts, invoices, purchase orders and bank statements. The physical data automatically becomes a digital record and uploaded to a cloud-based platform, ready for accountants to review and compile VAT returns as required in their process. Such automation tools dramatically increases client efficiency and process productivity, while making life less stressful for accountants and business owners.
Through automation, such systems eliminate the time-consuming everyday chores, ensuring accountants can act smart and get more done. The majority of small business owners end up spending their personal time compiling their records from the week (or month) and would love to get this time back thanks to automation tools. In return, time saved chasing and reconciling client data frees up accountants to focus on client relationships and higher-value advisory services. It also rapidly improves communication speeds, transforming how accountants engage and connect with clients and prospects, ultimately helping them to retain and attract new clients.
Once accountants have successfully evaluated and prepared their clients for MTD and established a clear, proactive plan of action, they then need to make sure all clients have registered for an HMRC Agent Services Account, although proactive accountants could do this ahead of client evaluation. Once this is done, certain HMRC online services, including the MTD, VAT and income tax pilots can be accessed so business owners and accountants can work together to manage the transition efficiently; making it as simple as possible for both parties involved.
By using technology to gain instant access to accurate, real-time data well ahead of this year’s MTD deadline, accountants and business owners can be sure they’re in the best position possible to move forward with confidence.
Future-proofing for challenges ahead
Every client is different and will have their own way of managing their tax - some will have been using paper-based processes for years on end. So, it’s important to frame MTD in a way that isn’t complicated or confusing. Given the rapid digitisation of UK businesses over the last year to survive - and in some cases thrive - during the pandemic, businesses are more likely to be open to a digital records conversation than ever before.
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Yes, the practical side of what’s required and expected with regards to MTD is essential to get right. But MTD is about more than mere compliance, it’s about looking to help future-proof businesses. This is a real opportunity to build relationships with clients on a personal level and move into that trusted advisory role.
Working with clients to lay out a clear roadmap of steps they should be taking ahead of the 2021 MTD deadline - as well as the April 2022 VAT rollout - will enable accountants to help their clients on a real-time basis. And ultimately be of more support to business owners looking to recuperate from the impact of the last year.
By digitising now and creating great efficiencies across the client’s business, accountants can take advantage of improved workflows, increasing productivity and working smarter and help their clients future-proof their business for good. Harnessing technology to streamline tax management and create a single view of the data for all financial records, means accountants will put their clients in the best position to move forward with confidence.
Auditors have become punching bags for governments that have struggled to respond to the aftermaths of the financial crisis. Anger and distrust remains in the public domain. There is little sense of accountability for misconduct for executives or their intermediaries. The few trials against individuals have resulted in little to no jail time. Intermediaries such as bankers have gone largely unscathed.
The weaknesses in capitalism have never been felt with such intensity, so raw and painful. We are wrestling with issues of inequality, with dwindling expectations or hopes for more shared prosperity. Capitalism is rightfully under attack for delivering uneven prosperity and leaving so many behind. There are important voices in business such as Warren Buffett and Larry Fink who have been calling for more responsible leadership and investing to address the shortcomings. Amidst these daunting challenges, auditors present an easy target for governments to signal accountability and reform.
We must resist following myopic and uninformed views. Reforms are needed to make capitalism more effective. Audit reforms won’t prevent bad judgements in business or avoid governance and business collapses. The failure rates in auditing are extremely low in comparison to the number of audit opinions issued every day. That is not to say that processes within audit firms could not be improved, as identified from various reviews. But true audit failures – those where audit opinions missed material frauds and such failures led to business collapses – are exceptionally rare. Simply put, material accounting frauds are rare events and this has not changed in the last decade.
The weaknesses in capitalism have never been felt with such intensity, so raw and painful.
The limitations of financial reporting will inevitably remain and therefore the probability of future business failures occurring may not necessarily change by altering the audit market. Specifically, accounting is reliant on the historical cost convention and mark-to-market adjustments, based on rules set internationally. Additionally, the ‘expectation’ gap for auditors to be guardians against fraud will largely remain. When management and third-party collusion is involved, fraud, corruption, and money laundering will remain increasingly difficult to detect for an organisation’s internal controls and the best auditors.
The work ahead
Although questions remain about how to best implement reforms, it is clear that there are valid trust and credibility issues affecting the accounting profession that need to be studied and addressed. There is legitimate public anger and frustration from corporate failures. It is correct to demand that executives involved in misconduct (or who are wilfully blind to it) are held personally accountable and face prosecution. The same should apply to those that facilitate misconduct as intermediaries or gatekeepers.
Business and auditing failures have contributed to the erosion of trust and it is incumbent on all of us to restore trust in both business and its gatekeepers. The profession can and should take further steps to improve audit quality.
To find effective solutions, it is important to apply a more holistic approach and analyse concerns, issues and solutions in the context of the entire business and reporting ecosystem. Using auditors as punching bags today is distracting from the important reform work ahead to address the shortcomings of our current form of capitalism.
About the author:
José Hernandez is the CEO of Ortus Strategies and the author of the new book Broken Business: Seven Steps to Reform Good Companies Gone Bad (published by Wiley), which is available now in hardback and ebook.
Website: http://www.ortusstrategies.com/
Using Google and O*NET data from the past 10 years for typical finance roles, Reed Finance developed the interactive online tool on stateofskills.reedglobal.com. It found that written and verbal communication is prized by employers of finance professionals, with ‘oral comprehension’ (an understanding of what people are trying to say) and ‘written comprehension’ (understanding written ideas and information) ranked as the most valued skills. This is in comparison to traditionally assumed skills such as ‘economics and accounting’ and ‘deductive reasoning’ which are ranked as the fourth and 10th most important.
Reed Finance suggests that this is due to the future strategies of companies wishing to see finance executives take on leadership roles which entail not only technical soundness, but also an ability to inspire and work as a leader of teams – with ‘active listening’ and ‘oral comprehension’ some of the most important skills for a CFO to have.
Firms value ‘human skills’ such as communication over technical accounting skillset.
As such, ‘human’ skills are prominent in successful candidates for roles such as management accounting and FP&A management. This may suggest that these workers have the skillset to take upon more senior roles.
Securing the right talent
Reed Finance found that the level of interest from candidates for the majority of roles in accountancy and finance had been consistent over the past decade, but there are some notable exceptions.
Interest in CFOs peaked in April 2013, higher by 111% in comparison to January 2012. The trend is even starker for finance business partners. From only modest interest in October 2009 popularity has continued to increase rapidly over the decade hitting a peak in July 2018 that is almost 2500% higher. The stark rise reflects a change in the industry towards finance professionals with strong communication skills informing and guiding the business.
Interest in finance business partners has increased from near non-existence in October 2009 by 2333% to a peak in July 2018.
Rob Russell, director at Reed Finance, says: “Businesses are in direct competition for employees that can bring ‘human’ skills to the table, not just technical accounting and number crunching. The influx of AI in the workplace is helping to enhance the numerical skillsets within these teams, so there will be greater time for high-level creativity. Companies want candidates that can communicate, secure business wins and manage teams so that they perform to the best of their ability. These changes to a more fluid, creative workplace are creating great opportunities for those within the finance sector.”
Software use is essential to success but becomes less important with greater seniority
The research conducted also investigated the tools that must be mastered for success in these roles, encouraging businesses to upgrade their software where necessary.
Rob Russell continues: “Every day working with businesses we find that tech is there to enhance the performance of individuals. While candidates should endeavour to keep up with the latest accounting tools on the market, businesses are increasingly looking for those that can win new business and demonstrate a return on investment.
“For candidates, developing the ability to take complex finance information they deal with on a daily basis and using it to answer the question, ‘what does this mean for the business?’ will set them aside from colleagues. This, coupled with commercial nous, has always been an advantage, but now it seems it is even more sought after as business leaders search for the candidates that can secure the future of their business.”
(Source: www.reedglobal.com/finance)
With the enforcement of IFRS 16 ahead of us, as of January 2019, Nick Turner, Country Manager UK & Ireland at Anaplan, discusses with Finance Monthly the potential opportunities therein.
There’s nothing quite like ringing in the new year. Along with the promises of fresh starts and renewed perspectives, it’s that time of the year that we can set—and dare not forget—lofty goals to achieve in the 365-days ahead.
Effective 1st January 2019, IFRS 16 marks one of the first significant changes to lease accounting standards in 40 years.
The new year represents more than an annual reset button and it ushers in more than new beginnings. It also brings deadlines. This rings especially true for corporate finance teams this year, as the IFRS 16 deadline looms.
Effective 1st January 2019, IFRS 16 marks one of the first significant changes to lease accounting standards in 40 years. If they haven’t already made the adjustments, businesses now have a very limited time to ensure that future accounting processes will meet compliance.
Unfortunately, for companies addressing these changes through spreadsheets and aging technology, time might be ticking even faster because these manual tools can turn such operations into a lengthy, burdensome, and complex undertaking.
What IFRS 16 means for businesses
Beginning on the first day of the year, new standard IFRS 16 will be implemented by the Financial Accounting Standards Board (FASB) and the International Accounting Standard Board (IASB). This standard will impact company balance sheets and how many businesses that rent or lease will operate in the future.
The changes are designed to make it easier for outsiders to compare the performance of different companies.
The new IFRS 16 requirements will eliminate nearly all off-balance-sheet accounting for lessees. Further, it will impact commonly used metrics such as EBITDA and gearing ratios. Why? The changes are designed to make it easier for outsiders to compare the performance of different companies.
Although the changes in performance metrics will make it easier to compare and contrast, they may also affect credit ratings, borrowing costs, and even stakeholders’ perception of a company. This makes it vital that companies understand and prepare for the effects of this new leasing standard.
Technology that turns arduous into effortless
Even though time is winding down on the IFRS 16 deadline, businesses still have an opportunity to implement a solution that can quickly fulfill its requirements—and many are turning to cloud-based, Connected Planning solutions.
Adhering to the new standard with spreadsheets and legacy tools quickly turns burdensome; in contrast, Connected Planning technology supports rapid implementation, easily interfaces with existing enterprise resource planning (ERP) databases, and calculates large volumes of data in real time. Connected Planning gives decision makers instant insight into how to optimise their company’s lease management strategy in context of the new regulations.
The deadline for IFRS 16 approaches and businesses have to determine the best way to comply with the new leasing standard soon. Connected Planning technology offers a way to tackle the complexity of the standard with ease.
Recent research by Reckon, the software developer, says that financial management is the biggest concern of small business owners across the country.
59% of small businesses owners in the Reckon study said they asked are concerned about financial management and demonstrate the real importance of financial literacy as a key skill for business owners, as well as the need for more support and advice for small businesses.
This has implications for business owners at the end of the financial year, when they will face huge pressure to whip their financial records into shape for tax purposes. Doing so without the necessary expertise or knowledge, however, makes the task even more difficult.
Business plan
First things first: a business plan which indicates the long-term strategy of your business – including financial targets, budgets, and profit and loss forecasts – can help you to get a handle on the potential cash flow your business will deal with.
Not sure how to create one? There are some questions you need to be asking to enable a solid plan and here are our top three:
Have you got a robust book-keeping practice?
It goes without saying, but good record keeping is incredibly important.
Money is the lifeblood of any business, and knowing how much of it has gone and where, will give you a clearer understanding of your financial position.
While tracking expenses and outlay is often a dull task, doing so will give you an understanding of your finances and a degree of control. And it’s just as important to regularly review your finances – don’t think that just because they’re in place, they’re looking after themselves.
This is particularly important when it comes to self-assessment tax. When it comes to tax, you want to be positive that you’re submitting accurate and detailed records. Good bookkeeping practice is the only way to guarantee this.
With the rise in popularity of digital accounting software, there are a number of options available to small business owners. Make sure to choose one which is suitable for the needs and requirements of your business.
Do you really understand your cash flow?
This will stem naturally from good bookkeeping practices, but having an insight into the financial trends of your business will give you certainty and clarity about what you can afford and when.
Different industries will have different cash flows.
In retail, knowing how much of your equity is tied up in stock will be important; for other services with a cash-on-delivery arrangement, being able to tide your business over between contracts is important.
Being familiar with your cash flow will help you to understand the natural peaks and troughs of your business.
When and how to seek professional help?
If you’re uncomfortable with doing the number crunching by yourself, then you need to enlist the help of a trained professional to help manage your money. Small business owners can seek advice from accountants, banks, and Independent Financial Advisers.
Accountants can offer a basic service which will reduce the workload of any business owner. This will range from helping you to file your tax forms correctly and on time, to helping you reduce to reduce your tax bill through legal means.
Banks can offer advice to their customers. However, while they will be able to identify the needs of your business, any product or service they offer will not necessarily be the best one on the market, as of course they aren’t independent.
On the other hand, an Independent Financial Adviser (or IFA) can offer tailored advice on your financial position, identifying the unique needs of your business and guiding you to the most appropriate solutions.
From business insurance through to long-term planning for retirement, IFAs are able to examine your business and help you to understand your finances and offer impartial advice on who can offer you and your business the best solutions.
While outsourcing financial management to a professional can be costly, it may represent the best value over the long-term. Professional financial advisers are able to offer specialist expert advice, tailored to the unique needs and requirements of your business. Ultimately, consulting a professional can give you confidence when it comes to your financial management.
(Source: Reckon)
