Much more than just bean-counters
People have a stereotypical view of what accountants do. In reality, there are many career options. If you want to become one, ask yourself what kind of accountant you’d like to be.
Within financial services, investment banks hire accountants, as do retail banks, hedge funds, private equity firms, insurance companies and fund managers. Companies in all other sectors also need accountants to help them tot up profits and losses.
Alternatively, you could work for an accountancy firm providing independent audit services to other companies. The best known are the Big Four – Deloitte, Ernst & Young (EY), KPMG and PricewaterhouseCoopers (PwC).
Roles and career paths
There are several options open to you in an investment bank.
Product control – keep an eye on the profits and losses made on products bought and sold on the trading floor.
Financial control – analyse the bank’s overall performance and produce regular reports.
Internal audit – responsible for checking that financial systems and controls within the organisation are being complied with.
Regulatory – ensure the bank reports its financial activity according to the legal rules of the countries it trades in.
Treasury – structure the bank’s financial affairs so that sufficient liquidity is available to meet its obligations and liabilities.
By comparison, if you start as a graduate trainee in a Big Four accountancy firm, your career will be more limited: about half of the thousands of graduates recruited every year end up in audit and assurance departments, where they handle the accounts of publicly traded companies and independently validate that a company’s accounts are correct.
Big Four firms also conduct advisory work, which can include corporate finance (see Mergers & Acquisitions on p18), reorganisation services (offering advice on everything from restructuring or insolvency to simply improving a firm’s performance), or forensic accounting (investigating improper practices). They also run consulting arms offering advice on the business case for everything from technology to economics.
There are other accountancy opportunities in industry and commerce for financial accountants as well as management accountants, namely those providing forward-looking statements for executives to base their business decisions on.
Pay and bonuses
Accountants earn more in financial services than in any other sector. Basic salaries are higher and there’s the potential to earn lucrative bonuses.
An internal auditor with more than five years’ experience working in banking and financial services in the US can expect $80-135k, according to Robert Walters, or $105-125k in the UK.
By comparison, an internal auditor in a large firm in industry or commerce earns $80-115k.
There are few occupations so reliant on qualifications as accounting, and yet the type of qualification varies from country to country. Most large accountancy firms will demand a finance-related degree, but the first few years in the job are spent earning your stripes.
In the US, for instance, if you want to work in assurance or public accounting it’s de rigueur to undertake the Certified Public Accounting (CPA) qualification, which requires a combination of study and work experience. There are also the options of Certified Internal Auditor (CIA), Certified Management Accountant (CMA) and Accredited Business Accountant (ABA) qualifications.
The qualification favoured by Big Four accountancy firms in London is that provided by the Institute of Chartered Accountants in England and Wales (ACA), something that is recognised internationally and that most investment banks in the City expect of their product controllers. Another option is the Association of Chartered Certified Accountants (ACCA) qualification, which is internationally recognised with over 320,000 members worldwide, while most management accountants tend to study the Chartered Institute of Management Accountants (CIMA) exams.
On the European continent, meanwhile, there is a host of local qualifications. In France, for instance, there is the DCG (Diplôme de Comptabilité et Gestion), equivalent to a threeyear degree, and the DSCG (Diplôme Supérieur de Comptabilité et Gestion), equivalent to a master’s degree. In Germany, accountants work towards becoming a ‘Wirtschaftspruefer’, but must first take their chartered adviser exams to qualify as a ‘Steuerberater’, and most firms also provide vocational training.
The national industry body in Australia is the Institute of Chartered Accountants in Australia, and to become a member it’s necessary to complete the Chartered Accountants Programme. Singapore has just launched the Qualification Programme (QP), which is mandatory for any chartered accountants in the country, and the Hong Kong Institute of Public Accountants runs its own CPA programme.
Jonathan Chesebrough, managing director and head of risk advisory at Royal Bank of Scotland, says: “What makes someone a great accountant is communication and strategic thinking, being able to convey complex topics in a simple and lucid manner, and ensuring others appreciate the strategic relevance.”
Everything in a Big Four firm, from audit to consulting, involves working with clients – even at a junior level – so employers look for evidence that graduate recruits have excellent communication skills and are well-rounded individuals. This means that extra-curricular activities, as well as academic achievements, are assessed during the recruitment process.
“As I liaise with a large variety of internal and external stakeholders – clients, regulators, staff and other professionals – it is important to have strong interpersonal and communication skills,” says Ivy Cheung, audit partner, KPMG China.
Even once you attain your accounting qualification, the on-the-job training continues, not least because the accounting profession is always being required to evolve, Cheung explains.
“The accounting profession faces many challenges as a result of significant changes to the global business environment. We need to ensure we meet regulatory and compliance requirements, continuously enhance our technical knowledge as well as diversify our skill sets,” she adds.