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Is the big 4 experience overrated?

It is amazing how much companies and recruiters value the big 4 experience. The multitude of calls and emails telling us about job openings and public and private companies is proof of this. They're constantly telling us that these companies are looking for auditors with 3-5+ years of business experience. Why is this the case? Well, I think it's analagous to the hiring at private equity firms and investment banks, they primarily hire people either from other private equity firms, investment banks, or ivy league colleges. There is still a ton of equally talented and smart individuals from other colleges or companies, but the private equity firms and investment banks are primary comprised of ivy leaguers and bankers, so they tend to show preferential treatment to individuals with similar backgrounds since they already know the type of experience these individuals had. The accounting groups at public companies are primarily headed up by people with public accounting experience, so they like going for individuals who went through the similar brutal work experience through their first few years at the big 4 firms. Accountants at companies hate dealing with auditors, but they understand that auditors work their tail off. Strong work ethic is one of the biggest reasons why the head of the accounting group loves hiring auditors. Don't get me wrong - it's not because we inherently have a strong work ethic, it's because we were forced to develop a strong work ethic. I recently spoke to the head of an accounting group who hired somebody from the big 4 last year, and he told me that their recruiter was advised to hire exclusively from the big 4. When the interviewers came in though, they all wanted a work-life balance (nothing wrong with that, except they implicitly stated that they preferred 9-5). So the company took a while to find that one auditor who realized that it might not be the be ideal expressing that 9-5 was imperative. Companies are not hiring from the big 4 if they're easy jobs that anyone can do, they want people who can work their tail off when it matters. Another reason is the ability to research effectively. Companies always run into issues and need to learn how to account for the issues, and auditors have been trained to research and figure out how to interpret the complex accounting guidance, which can be vague at times. Deadlines are another reason. We're so used to short-term deadlines, our work pace has been trained to finish whole audits in weeks. So when alums get projects and 3 month deadlines, they're usually done in weeks and are ready for the next one. Communication is another big asset we develop, we're always talking to clients and dealing with different personnel, and you really get to hone your communication skills. Leadership is another tenet they look for. Seniors are already leading teams 3 years out of college. When you quit and join another company, you shouldn't have any problem leading teams of 2-3 people. Wow I just rattled off all the kool-aid points right there. All this being said, this is just from their perspective. Are there worthy people out there who don't work in the big 4 who should be getting these offers? Absolutely. Are there people in the big 4 who are not deserving of these jobs and only getting it because of the big 4 name? Definitely. Good thing is, unlike the investment banks, non big 4 accountants have a decent chance to get different jobs out there, so it's definitely not the only way thankfully. So in the end, is the big 4 experience overrated? There's no yes and no answer. I think recruiters over-value big 4 experience, but there's definitely some added value to hiring them. Now that being said, if I start a company and had to hire a controller, I'd go for someone who has big 4 experience, not going to lie. This is only because I know what I'm buying. There are gems who don't work in the big 4, but sadly it's the familiarity bias playing out.

Comments

Anonymous said…
Thanks for the info, and coming back...I found your blog probably 4 blog posts ago and I find it very interesting and informative. Just FYI I am a senior accounting major at state. I got an internship at a investment firm, Ill be an investment analysis intern (was considering doing a minor in finance with an accounting major, put that on my resume and had an awesome interview) anyway I still do want to be an accountant most likely audit.

How will having that on my resume be viewed when I apply for accounting positions??

Thanks
Anonymous said…
GREAT post! To the OP: what would you say is the MOST common exit route from the Big 4? Asst/Controller, Accounting Managers? How about pay and hours speaking in a very general sense? $80-100k 60hrs a week ish?
Anonymous said…
I would stick with finance after doing your internship at an investment firm. You will end up making a lot more money in finance than you will in accounting. I work at a big 4 firm in NYC and most of my friend work in banking. I work way more than anyone I know, and their bonuses are more than my entire salary!
itauditsecurity said…
I don't think big4 experience is overrated. I've worked with excellent and terrible big4 folks, but most of them are competent or at least better managed. Unfortunately, that increases the cost to the client.

Overall, I think hiring someone with big4 experience makes it more likely you'll get a quality candidate.

p.s. For readability, can you break your longer posts into more paragraphs? Thanks!
notfordisplay said…
To the first commenter, It'll help, any kind of work experience as an intern helps to land a full time job. It's not going to help as much as an internship in auditing, but it'll be viewed positively regardless. Be prepared to answer why you don't want to go into investment banking down the road - that might be an interviewer question. Hell, I've asked that before.
Anonymous said…
great post..!
Anonymous said…
Good post. I think most auditors in big 4 are competent as mentioned by the other posters. Also i think the idea is that by working in a big 4 you are exposed to a lot of issues. For example if you work on a major banking client in the Big 4 and say your on the wholesale team. Spend 2-3 years on this team and your understanding if derivatives and financial instruments will be so good, that you will likely be able to understand 95% of all products int he marketplace.

The same cannot be said for other people who work in smaller firms. Not becaus they do not work hard (they do!), but the odds of them working on a wide variety of issues is lower.

Having said that i think the Big 4 experience is not overrated. On the other hand i think what non-Big 4 candidates bring to the table is also great. its just a matter of what the potential employer is looking for.
Anonymous said…
I wish I had "Big 4" experience but I don't. Big 4 is definitely not overrated because everybody I work with has 4+ years with the Big 4 (and they are all managers as I am not-but I am 4-5 years younger than everybody). But, just because you do not have Big 4 experience does not mean you should use that as an excuse that you will never find a management level position. I started out as a regular accountant with a company I work for, worked my tail off, and now I am working just under the Financial Reporting Manager just after a year. Hopefully in 5 years, I will be able to compete for a managament level in position (i.e Financial or SEC Reporting Manager)-but I want to hear from some of you to let me know what my chances are.
Anonymous said…
As an auditor with 8 years experience (plus senior management experience prior to that) and working almost exclusively in IT I have found most of the Big 4 auditors that come in for an IT auditing job are clueless about IT in general. Unless I assign them to a compliance area they are familiar with they have no idea about a single technical audit.

They may have wide industry experience, but all they might know is SOX. While someone from an internal division private or government knows more than one compliance area.

While they have some very good compliance knowledge, I have found better and more broad knowledge in individuals from private corporations and government.

As far as work ethic and ability to lead and manage, many of the non big 4 auditors have spent time managing departments and not 3-4 people on an audit team. My last time around working with our external Big 4 auditors on SOX, I had to call them back in because they had read all the IT data wrong and passed a control that actually had a 30% fail rate.

Maybe in finance I would feel more comfortable with the big 4, but with the auditors they assigned to the IT side, most have no idea what they are doing other than following audit steps because they are not IT dedicated.
Anonymous said…
From the perspective of a recruiting firm, resumes with big 4experience stand out more but we do take the time to seek out candidates with smaller firm experience. Working for a big 4 firm shows you have a strong work ethic and that you are career driven. This is not taking away from indivduals at non big 4 firms as we have found great candidates from smaller companies as well.
memciekun said…
I was really thinking about quitting my job as an auditor -yes, big 4-

it's sucking the life out of me.

but when i think of all those years during college studying my ass off, i think i'll stay a little bit more.
R.J. W said…
This comment has been removed by the author.
R.J. W said…
Hi,

I am a former Big 4 Auditor and I've been a recruiter in both agency and corporate for exclusively professionals with big 4 and large regional experience in their backgrounds.

No, Big 4 experience is far from overrated. In fact, if at all possible stay in Big 4 (audit/assurance/tax) for at least 2 if not 3 years. Keep in mind, I'm talking about the audit and tax disciplines.

Big 4 experience is ALWAYS in demand. ALWAYS.

I have been a recruiter for almost 15 years and I have not and still cannot present candidates WITHOUT Big 4 or Large Regional accounting experience to almost EVERY SINGLE ONE of the finance and corporate accounting positions I've worked. And that is not an exaggeration.

Now, if you are looking to go into investment banking, that is a bit different. But really only then.

Rashod Welch
Anonymous said…
I am do not have a big 4 experience. I have had a senior position in a medium private company and now work with a corporate team in a public company. As a rule of thumb, we should not generalize when it comes to experience, I have had external auditors/consultants from a national accounting firm working on my previous company financials who we deemed quite average and did not add much value. At the end of the day, it becomes a branding and marketing issue. Is Big 4 experience heavy one paper? Yes.. Does that mean more competence, not necessarily
R.J. W said…
"Does that mean more competence, not necessarily"

Of course, but this is true of every endeavor in every walk of life...

I'm sure we both know people who went to small state universities who can out-think a Harvard grad without breaking a sweat.

There are kids in an inner city public school who are more driven and when given the opportunity, outperform kids who attend the best private schools in the country.

So, it goes without saying that competency is not solely the property of the Big 4.

But the OP was not asking about competency. He was asking about marketability.

And speaking strictly from a marketability standpoint, NO. Big Four experience is NOT overrated.

It's not even close enough to warrant debate. I'm not saying that it's right or that it's fair. That's moot, frankly.

It simply is what it is.
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Habibah Adeeb said…
Prudent Chartered Accountants is a leading provider of accounting, auditing and management consultancy in the Dubai, UAE. We provide accountancy and auditing services through Middle East. Our professional and qualified team has a wealth of knowledge and experience in areas such as taxation, corporate finance, litigation support, audit assurance and accounting.

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