What Size Accounting Firm Should You Work For?

Kevin Ryan


What Size Accounting Firm Should You Work For?


            Each year, approximately one in four accounting majors enter the field of public accounting. A key decision facing these individuals is whether to work for a local or national accounting firm. This is an important decision since, according to one 2004 AICPA study, national accounting firms experience nearly twice the annual employee turnover as their local counterparts (20% versus 11%). In light of these statistics, it is important for prospective accounting employees to spend some time researching their different employment options. The factors of a working environment that should be researched before accepting a job include such issues as hours worked per week, competition and criteria for promotion, variety and scope of work, growth opportunities, and job satisfaction. A proper understanding of these factors should assist public accountants and increase the opportunities for job satisfaction and promotion.

           Smaller, local firms are generally managed by two or more CPA’s along with several staff accountants and offer a more informal work environment then their larger counterparts. Staff accountants in smaller firms typically work alone, with little direct supervision. Additionally, accountants at smaller firms typically spend most of their time in the office and coordinate most of their work through the owner of the accounting firm rather than with the client. Staff accountants at local firms are routinely involved with many of the day to day accounting issues faced by clients such as auditing, write-up work, payroll, tax, and management advisory services. It is common for staff at a local firm to obtain a broader perspective and a better understanding of the daily accounting activities affecting a business.

            Larger, national accounting firms are much more structured and management is generally composed of many partners, directors and managers. These national firms tend to serve larger, corporate clients and staff accountants will spend the bulk of their time out of the office and at the client. Staff at these larger firms will work as part of a team consisting of seniors and other staff. These teams are assembled as needed in order to complete specific tasks. As a result, new staff at these firms tend to have very little contact with upper management. Additionally, there is a very narrow scope to the work they perform which generally consists of highly specialized tasks. The downside of all this specialization is that the average staff accountant at a national firm will not get a view of the client’s operations as a whole.

            Stress and quality of life are often key decisions in any individual’s career choices. Competition at large firms can be stiff and turnover of new staff is high. There is a lot of competition for promotions at these firms and many staff view each other as competition instead of co-workers. In a national firm, a staff accountant’s success is based upon his or her ability to rise through the ranks. Promotions at the national firms are based on not only technical ability but also an individual’s ability to manage and motivate a group. Seniors have to be able to deal with highly successful and demanding partners and managers, as well as maintain a high level of technical competency and supervise the staff under them. In a recent AICPA study, only 2% of individuals entering the accounting profession ended up being promoted to the partner level.

            Advancement opportunities at smaller firms are more limited than at their national counterparts and promotions are generally based on different criteria. In smaller firms, technical competency is stressed much more than managerial abilities when promoting staff. Individuals who prefer a quiet work environment and are less team oriented would probably be best in a smaller, local firm.

            Employees at national firms also tend to put in longer hours, frequently between 50 to 60 hours weekly throughout most of the year. Additionally, that number increases as an individual is promoted. Although this may seem discouraging to some, the work becomes increasingly more interesting and less mundane as an individual’s career progresses. In fact, partners at large firms tend to have a higher job satisfaction than those working fewer hours because of the variety of and independence in their work.

            When entering the accounting profession, an individual will have to decide between a local or national firm. There is no objective answer and each person has to decide which one serves them best based on their own personality, ability and goals. The decision should not be made lightly, where you work will have a dramatic impact on your career.

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