Public Accounting and the Indiana University Student

Public Accounting and the Public Accounting and the Indiana University StudentIndiana University Student

September 23, 2004

Indiana University

BKD, LLP

OverviewOverview

I. Public vs. Private Accounting

II. Regional vs. Big Four Accounting Firms

III. What Recruiters Look For In College Recruiting Candidates

IV. Typical First Year Responsibilities

Public vs. Private Accounting

• Public Accountants – Perform a broad range of accounting, audit, tax, and consulting activities for corporations, governments, nonprofit organizations, and individuals.

• Private Accountants – Record and analyze the financial information of the companies for which they work.

• First Job Statistics: (CPA Journal)

– 55.8% Public Accounting– 30.1% Private Industry– 8.2% Governmental and Not-for-Profit Accounting– 5.9% Other Accounting

Public vs. Private Accounting

• Public Accounting– Assurance

– Tax

– Consulting

• Ease of moving from public accounting to private accounting• Occupational mobility• Variety in:

– Type of work

– People you interact with• External• Internal

Public Accounting Career Track

 Partner

Staff ConsultantStaff

Senior ConsultantSenior

Supervising ConsultantSupervisor

Managing ConsultantManager

Senior Managing ConsultantSenior Manager

ConsultingAudit & Tax

Public vs. Private Accounting

• Private Accounting• Financial Reporting

– Corporate Finance• Treasurer

• CFO

• Controller

• Managerial Reporting– Cost Accounting– Internal Audit– Business Development

Regional vs. Big Four Accounting Firms

• Regional Accounting Firms– Client Base:

• 95% medium to small

• 5% large (most SEC)

– Many jobs that are shorter in duration– Wide variety in types of clients– Travel is limited, but available if desired – Making Partner

• Average length of time is 12 years

• Chances are 1 out of 20

Regional vs. Big Four Accounting Firms

• Big Four Accounting Firms– Client Base:

• 85% large corporations (most SEC)

• 15% medium to small

– Fewer jobs that are longer in duration– Less opportunity for exposure to wide variety of clients– Significant travel – Making Partner

• Average length of time is 18 years

• Chances are significantly lower

• Upper level partner’s compensation (Equity and Non-Equity)

Regional vs. Big Four Accounting Firms

Current Issues: Sarbanes-Oxley• Big Four:

– Focus centering on large SEC Clients– Divesting in consulting services to middle market

• Regional Firms – Gaining client relationships in middle market– Providing resources to meet SOX 404 standards

Public Accounting Report’s Top 10 for 2004

U.S.

Net Revenue Number Number Revenue Split

Firm (in millions) of Partnersof

Offices A&A Tax MCS

1 Deloitte & Touche 6,511.0 2,618 91 36 21 34

2 Ernst & Young 5,300.0 2,118 86 59 38 0

3 PricewaterhouseCoopers 4,668.0 2,027 102 59 29 9

4 KPMG 3,511.0 1,622 94 63 37 0

5 RSM McGladrey 586.0 468 92 42 35 20

6 Grant Thornton 484.8 326 51 52 33 15

7 BDO Seidman 353.0 281 37 41 41 18

8 Crowe Group 286.2 111 19 29 19 35

9 BKD 230.6 197 27 44 35 21

10 Plante & Moran 198.6 161 16 46 31 23

What Accounting Recruiters Look For In Candidates

• Communication skills• Enthusiasm• Creativity• Problem solving ability• Teamwork skills • Highly motivated• Excited about the firm

Typical First Year Responsibilities

• Audit– Observe inventory test counts– Perform tests of internal controls– Draft financial statements and auditor’s reports– Develop recommendations for improving client productivity – In-charge some smaller engagements

• Tax– Prepare individual, corporate, partnership, estate, trust, and tax-

exempt entity returns– Draft responses to federal, state, and city notices from taxing

authorities– Research tax issues– Prepare tax projections under multiple income and deduction

scenarios

Any Questions?Any Questions?

Tony Gerdt [email protected]

Mike Summers [email protected]

Thank you!