Public Accounting Myths

While in college and even during early years of my professional career, public accounting myths followed me and guided my strong and blind desire to only consider working for one of the big public accounting firms. I was not the exception as my classmates and I lined up for hours to interview with the firms that showed up on our college campus to hire the smartest and brightest of us all. There was a sense of competition amongst my classmates to be hired by the top accounting firms (there were six or seven at the time) to pursue a public accounting career; auditing, tax or consulting. The public accounting myths followed us everywhere and we neither considered nor accepted any other accounting career option or path and this handicap limited our career choices as I discover now. Competition for a glamorous accounting related job was particularly intense in my senior year as graduating students were aggressively looking for the perfect accounting job with the top-notch accounting companies. The distressed job market of early 90s didn’t particularly help to ease the competitive job environment and the top accounting firms knew it. The firms interviewed select students who had dressed up and lined up for hours to get the chance of a lifetime to prove why they’re the best. I was one of them and that was my first encounter with the Big 6 public accounting firms. Due to the competitive environment for the reasons that I just described, students were only allowed to interview with a handful of the companies, so I interviewed with one of the big 6 accounting firms but did not secure a job. I admit, I liked accounting but wasn’t one of the smartest accounting students. Actually, I was one of the brightest in my audit classes. Around my graduation year, the job market was so bad that a friend of mine, who had graduated from a MBA program with concentration in Finance, even begged a currency exchange to work for free and build his resume. He was rejected out of respect for his dignity I guess.

Upon gradation and unknowingly escaping the public accounting myths, I went on to work for a credit card company as an internal auditor and that’s how I started my professional career. While starting my internal audit career at the credit card company, I was fortunate to work with and learn from bright people who had left the public accounting career to join the industry. Is it possible the same public accounting myths followed them even longer than they followed me? Maybe they joined the firms because of the same public accounting myths and stayed there for as long as they thought it was the best and only option for them at the time.

Let’s now talk about the public accounting myths that followed me in the past and analyze today's realities:

Myth #1 - I need public accounting audit hours to get certified – In the past, accounting graduates who wanted to become a Certified Public Accountant or CPA, had to pass a 2-day test in a large crammed space and provide required number of audit experience hours with the public accounting firms to become a CPA. Today, accounting graduates no longer need to join a public accounting firm to gain the experience required for becoming a CPA. Today, the required experience hours can be obtained from the private industry as an internal auditor and the test can be taken on line. Unless accounting graduates really and only wanted to become a CPA, they had other career choices such as becoming a Certified Internal Auditor or Certified Information Systems Auditor. You can see some of the other choices under my professional career. But we didn’t see these other opportunities and choices because of the public accounting myths. The accounting firms loved the fact that the accounting graduates had to work for them for two years in order to get their CPA. In essence, they controlled the CPA supply to the market and they had the luxury to select only the brightest accountants who wanted to become CPAs. Today, they no longer have that privilege and must compete for the best talent with Internal Audit Department of major companies. Personally, I didn’t know exactly why we all wanted to work for the accounting firms although some of us never wanted to become CPAs nor had the desire or talent for it but thinking back and knowing what I know today, I’m sure we were brainwashed by the public accounting myths and rarely considered other career choices.

Myth #2 - Public accounting life is glamorous – Although working for a public accounting firm appeared very glamorous at the time, I don’t know any one today who has worked for the public accounting firms and believes that their life is or was glamorous regardless of whether they’re staff, managers or partners within the firm. The public accounting myths including glamorous life was only a perception until graduates actually started working for the firms as some may also call the “audit sweatshops”. As I mentioned, the accounting firms knew that the accounting graduates needed to work for them to get certified and they abused that power to some extent. Although, accounting graduates no longer need to work for them to get certified and public accounting firms have somewhat balanced the work and life ratio for their employees, the perception of “sweatshop” continues to float around to this day and works against the firms.

Myth #3 – Public accounting pays well – While considering public accounting firms as potential employers in the past, we all had the impression that it paid well to work for them. This was yet another public accounting myth as I found out years after graduation. In fact, due to their competitive advantage in the past, the accounting firms didn’t have to pay premium salaries to recruit the accounting graduates although some of the partners were highly compensated in the millions of dollars. Today, as the firms have to compete with major companies for accounting and other related talents, they have increased the salaries for staff and managers while reducing the partners’ total compensation for balanced budgets.

Myth #4 - Training is great – There is some truth to this public accounting myth as the firms have established methodologies, adequate budgets, formal procedures, guidelines, and internal knowledge databases, but so do many of the best companies in the world. For example, whether you select accounting, audit or information security as a career, chances are these corporate functions have adequate training budgets, tools and expert management teams to train new recruits, with a few exceptions. However, the few exceptions are not or should not be included in the list of “best companies to work for”.

Myth # 5 – Working for a public accounting firm helps me build my resume – So does working for a fortune 100 company. For example, whether you are an accountant, security consultant or internal auditor, by working for a large well-known company, you get to build a great resume. The trick is to stay with a great company long enough to build a solid resume but the quality of the experience is the same whether you work for a large and well known company or a big accounting firm.

Myth #6 – Public accounting firms are creative – Actually, I think it’s exactly the opposite. Similar to the jungle where smaller animals have more flexibility and speed for changing direction when chasing their prays, smaller companies in a specialized niche can adapt faster in a rapidly changing business environment. The public accounting firms similar to large companies and consulting firms are the giant gorillas that can’t adapt fast enough to changes and their managers and staff can’t deviate much from their established policies, procedures and hierarchy to be as creative as they can be. However, once the change of direction is made to fill a market need, smaller companies should watch out for the giant gorilla catching up from behind. Once a market need is established or created such as SOX 404 compliance, smaller companies have more flexibility and speed to serve that market demand initially and should take advantage of their strength. Creative individuals have a better chance of expressing themselves in a smaller business environment, which is less bureaucratic, has flat organization, and is eager to compete.

Myth #7 - Public accounting staff are experts. This public accounting myth was certainly viewed as such in the past and there are some excellent internal controls and audit experts within the public accounting firms today, however, if I'm personally looking for a subject matter expert such as a technical information security expert, I will most likely consider a well know technical firm that specializes in information security. Specialists within a technical firm that only deal with any unique subject matter whether it's tax or information security without the pressure of selling have more direct and in depth experience in their day to day jobs. In addition, just like in any other organization, there are also unqualified and non-performing individuals also known as fists in a bucket of water within the public accounting firms.

Myth #8 - Public accounting firms are credible - Well, this public accounting myth was certainly true before the accounting scandals and the collapse of Arthur Andersen, the largest public accounting firm at the time, which destroyed most of the public accounting firms' credibility. Sarbanes Oxley was created to rebuild public trust which will take many years, however, while the public accounting firms continue to be allowed to perform audits and sell consulting services, another public accounting scandal is inevitable.

Aside from the past public accounting myths, there are good reasons to join their forces. For example, if you want to be exposed to diverse industries and projects before selecting a career, it’s a good idea to join a big well-known consulting firm before deciding to select a particular career such as information security in a particular industry such as healthcare. Therefore, your career moves should be based on research of your interests, your talents, market demand, market supply and future business environment changes. For example, I predict that regulatory changes in the healthcare industry will further scrutinize the information security and privacy controls of the health insurers and providers in the coming years, thus creating a huge market demand for external support similar to the SOX 404 compliance efforts. Based on my analysis, it’s not difficult to guess where I recommend the future career growth will be for interested information technology auditors, and information security experts. It’s up to you to decide if you have the interest and talent to be part of this growth or whether your consulting company has the aptitude to serve this increasing market demand.

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