Category: Finance careers

Categories
Career advice Finance careers

How to join an audit firm

[vc_row][vc_column][vc_column_text]If you are inspired to choose auditing as a career, then, as a next step, you need to find out how to join an audit firm or how to get enrolled in a Big 4 audit firm or what is the best audit firm for your career.

To become an auditor, you need to choose an audit firm. An audit firm is mandated and has a license to perform external audits of different companies for regulatory and other purposes. An audit firm would have a typical structure of some audit staff, audit managers and audit partners.

To join an external audit firm, ideally, you should be a university graduate with majors in accounting, finance or economics. There are many audit firms which hire engineers, scientists, IT professionals, architects and graduates of other disciplines. This diversity is because an audit firm will have a variety of clients and a variety of engagements. They will have clients in healthcare, engineering firms, construction, technology and financial sector. So having a workforce from a variety of backgrounds help an audit firm understand their clients closely and to assess audit risks in a better way.

 

Many audit firms also require professional accountancy qualifications like CPA, CIA, ACA and ACCA etc. They don’t expect you to have completed the studies fully, but if you have progressed somewhat towards these qualifications, it will put a good impression on the hiring manager.

Now, a vital step for you to identify the best audit firms around you and prepare a suitable strategy to approach a position in that firm. Most of the times, Big 4 audit firms are desired by aspiring auditors and accounting professionals; these include Pricewaterhouse Coopers (PwC), KPMG, Deloitte & Touche Tohmatsu and Ernst & Young. Big 4 audit firms are top four auditing and consultancy firms in the field of accounting and auditing.

 

Once you have selected which audit firm to aim for, you need to perform the following steps:

  1. Prepare your resume: Your resume should be highlighting your passion for the auditing profession. The more you express you’re interested in the field of auditing, the more likely you are to be taken seriously.
  2. The resume should also highlight advanced auditing skills which you might have learnt during your college or professional studies, including the ability to identify audit risk, business risks, control risk and inherent risks.
  3. Review job ads at LinkedIn (or other career websites) for different auditing positions and carefully go through job descriptions. Try to gain maximum understand and include some of those keywords in your resume as skills obtained as part of your studies (wherever applicable).
  4. Approach key management people of your target audit firm in your area through LinkedIn and send them personalized connection requests highlighting your potential and interest to join auditing as a career with their audit firm.
  5. Make a personal visit (and multiple, if possible) to the audit firm and try to meet with HR or audit partners or audit managers. Try to obtain their career advice on how to join a right audit firm like theirs. The more you engage them, the longer you are likely to remain on their mind. Usually, audit firms hire trainees after specific intervals. Obtain details of the next hiring cycle.
  6. Once you obtain an interview call for the position of audit associate, it’s your time to prove your best so that you can get into your dream audit firm. You may not have experience of interviews before, but try to stay calm and composed and be honest always. You do not have to try to impress them by faking or by telling lies. They will know it instantly, although they may not express it upfront.

 

 

If you get an employment offer from the audit firm, take your time to make your decision. Joining an audit firm is one of the most important decisions of your career and your life as well.  You are going to spend all of the daylight time of your life with these guys. You should be comfortable enough to take that decision.[/vc_column_text][/vc_column][/vc_row]

Categories
Career advice Finance careers

How to become a Finance Manager

[vc_row][vc_column][vc_column_text]If you are an accounting & finance student or at the early career stages of accounting & finance, then this is the right article for you. You need to read the below guidance to reach the position of Finance Manager.

Companies hire candidates mainly because of what they have done in the past. So, do proper research on the job descriptions (JDs) of Finance Managers and see what the ordinary functions of finance managers are. Once you go through some of the JDs of Finance managers, you’ll see a long list of tasks and responsibilities. However, all of them are not equal in importance. I can summarize these responsibilities in below 4 points:

  • Financial management of the organization, i.e., where to invest excess cash and how to arrange for the funding wherever required
  • Preparation of forecasts, budgets and financial models
  • Preparation of financial statements as per applicable accounting standards
  • Routine accounting functions like handling payments, collections from receivables etc.

 

 

Now, the first two points are critical. These are the points where usually candidates lack. The first point of financial management is related to the treasury side of the role. As a finance manager, you need to manage the flow of money. Money for an organization is like blood for a living body. A good finance manager knows how to manage the flow of the money and find out the ways wherever there is an issue.

Financial analysis and planning is another desired skill from Finance managers. If you can prepare financial models, prepare budgets and do business planning activities, then you are a star for your next employer. These are the skills which guide the organization on how to proceed ahead and take the right business decisions.

Another important role is related to financial reporting and consolidation; this is mainly an area of Financial Accounting but may be valuable for the position of Finance manager too. You need to learn the latest consolidation rules and master the art of group consolidation.

 

 

Now, if you don’t have good skills in investment management, treasury management, financial management, financial modelling, financial planning & analysis, budgeting, IFRS, consolidation, group reporting etc. then you need to learn these skills and apply in your current role. Once you learn these skills and use in your current position, then you’ll be able to showcase these skills of a good finance manager to prospective employers.

You can learn these skills through online courses available on various MOOC platforms (Massive Online Open Courses) like coursera.com, edx.com, khanacademy.com etc. These courses are available at quite low rates, and you can complete them at your own pace without worrying about attending formal classes.

Once you get these courses and certificates, and you apply the same in your current role, you are all set to reach the actual Finance manager position.[/vc_column_text][/vc_column][/vc_row]

Categories
Career selection Finance careers

Big 4 firms or Non-Big 4? A comparison

[vc_row][vc_column][vc_column_text]There are four audit firms in the world which are categorized as ‘Big 4’, their names are listed below:

  • KPMG
  • Ernst & Young (EY)
  • Deloitte Touche & Tohmatsu (DTT)
  • Pricewaterhouse Coopers (PwC)

These professional services firms provide different services including auditing, business advisory, taxation and related services. The rankings of these Big 4 four firms varies from year to year and depends on various measures. For example, one of these may be number one based on the highest amount of revenue, and the other may be number one based on the higher number of employees etc. But these four firms are significantly larger than the rest of the audit firms in the world.

All other firms, other than Big 4 audit firms, are non-big 4 firms. We can classify them under top 10 or top 20 or top 50 (depending upon their respective category). So, if an audit firm is in ranking from number 5 to 10, that firm will be referred to as top 10 audit firm. Although Big 4 audit firms are also among top 10 audit firms, they are not usually referred to as top 10, as they have their distinctive ranking of Big 4 firms.

Below are the audit firms in considered in top 10 generally:

  • RSM
  • Crowe Horwath
  • BDO
  • Grant Thornton
  • Baker Tilly
  • Moss Adams

 

 

If you refer to most of the job advertisements in the field of auditing, accounting and finance, you’ll notice that a significant number of ads require Big Four candidates. Job posts contain wordings like “preference will be given to Big 4 candidates”, “candidate should have Big 4 background”, “A strong preference is for the Big 4 trained”, “Experience form Big 4 audit firms is mandatory”, and “Big 4 experience will be highly valued” etc.

This kind of sentences you’ll often find in jobs, and this conveys a message, i.e., most of the large companies prefer candidates who have good experience from Big 4 audit firms.

This preference is because of the following reasons:

  1. Big 4 candidates usually have worked on large scale assignments and projects like auditing of a listed or a multinational company or a large group. Such exposure rarely happens with candidates from small audit firms. This is because small audit firms usually have small and medium enterprises as their clientele.
  2. Big 4 audit firms provide rigorous training programs to their staff regularly. These training programs widely range from the use of software(s), ethical training, IFRS updates and interpersonal skills training. Such learning and development opportunities are not usually available to the staff of small audit firms because of budget and resource constraints.
  3. Big 4 audit firms are a preferred choice of candidates. Therefore, top graduates and high performing candidates prefer to choose Big 4. These candidates deliver better in audit firms and after that in the industry as well. The class of candidates left for small audit firms is usually not of impressive profile (however, exceptions always exist).
  4. Better branding and recognition of Big 4 exerts a significant impression on clients and the overall industry. This general perception means that any company would already be impressed with the profile of the candidate even before he or she enters the interview room. While on the other hand, candidates from small audit firms have to fight to obtain their credibility and significance.
  5. Cross-border secondments and assignments is another pie of the cake available mostly to the Big 4 candidates only. Many Big 4 audit firms send their staff to their international locations for different audit and advisory assignments. This arrangement provides candidates with an excellent opportunity to witness multiple work cultures, and it enhances the personal and professional growth of the candidates. However, such opportunities are rarely available to non-big four candidates.

 

 

However, it is not always the Big 4 audit firms and their candidates who are winners all the times. There are some points which are in favor of small and medium audit firms as well.

These are listed below:

  1. The career ladder is usually shorter in small audit firms. There would not be many hierarchy levels to reach the top level. In a small audit firm, a candidate may progress to Partner level in 5 to 7 years, while in a Big 4 audit firm, it may take around 20 years on average.
  2. Learning is, for sure, faster in small audit firms as compared to their large counterparts. This difference is because usually, an individual is handling all work of a short audit assignment. This single-handed-job provides an exceptional opportunity to learn all the items of an audit process, including preparation of financial statements, drafting and present management letter and performing audit procedures. While in the case of Big 4 audit firms, you may be given limited responsibility initially.
  3. Some company prefer candidates from audit firms as they are not demanding like the candidates from Big 4 audit firms. Some companies complain that Big 4 candidates change their jobs quickly as they get multiple offers, so they are not reliable or loyal. While candidates form non-Big 4 background are likely to stay in their roles for a relatively long period.
  4. Hiring a candidate from Big 4 audit firms require more money, so here comes the factor of cost. A company which prefers to save cost would evaluate a candidate from a small audit firm, and if they find him suitable, they would prefer this candidate over someone form Big 4, due to the apparent reason of cost-saving.
  5. Some candidates prefer small audit firms because they feel valued and important there. If the same candidate was in a Big 4 audit firm, he may not be able to grab that attention and significance, considering that there would be many other similar or better team members.

 

On an overall basis, we can conclude that there is no one best fit for everything. We cannot term clearly a Big 4 candidate better than a non-big 4 candidates. It depends a lot on one’s preference, option, context and personal capabilities. Each candidate should be evaluated at his own skill set and qualifications.[/vc_column_text][/vc_column][/vc_row]

Categories
Career knowledge Finance careers

Responsibilities of a Busy Finance Manager

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What are the responsibilities of a Finance Manager? What do they keep doing the whole day? What will be your life like once you become a Finance Manager? What can you improve in your current role as Finance Manager? What makes them come home late every night? If you have any of the above questions in your mind, then this article is written for you. Stop all the distractions around you and start reading it below carefully.
By Finance Manager, we mean someone who is at a mid-career level of Accounting & Finance Profession. He/she may have a different designation that Finance Manager. This article applies to the similar titles like accounting manager, accounts manager, Finance & administration manager, financial Controller, Assistant finance manager, Treasury manager or even Senior Accountant, etc.
Firstly, it is important to realize that the life of all finance managers is NOT the same. There may be significant differences in the work routine of Finance managers depending on various factors like size of the organization, organization structure, sector/industry in which they work in, current business situation, management plans, capability and functionality of current I.T systems and many other things. However, we’ll true to cover the responsibilities of a super busy finance manager who is trying to juggle all responsibilities simultaneously:

 

Financial Reporting

This area mainly comprises the preparation of financial reports and getting them audited in coordination with external auditors. Some company may have an annual requirement for audited financials, and some may have to report quarterly results with a review report from external auditors. Financial Reporting is a crucial function and requires significant devotion and time. Preparation of financial statements and resolving auditors’ queries is an essential job and may require several late sittings during audit days. This task requires a full understanding of the accounting system and IAS/IFRS.

 

 

Management Reporting

Management reporting or internal reporting is usually a monthly job, and it may be even less than that, i.e., on a weekly or even daily basis. If you have set templates for monthly reporting, you may need to update the figures from the latest trial balance. However, a comprehensive management reporting with management commentary is also a vital task and requires significant devotion. Read our detailed article on management reporting here.

 

Regulatory compliance

For the companies which are listed on a stock exchange, then there would be regulatory reporting requirements from the stock market. For the companies in a specific industry say like, Insurance, the company will have to provide specific reports to Insurance Regulator. If the company is a member of a particular trade association, then it will have to report figures to the trade association. Similarly, a central bank is a main regulatory body for financial institutions. So, depending on the industry, regulatory reporting would affect the responsibilities of the finance manager.

 

Budgeting & Forecasting

How much money will be spent in the next year or next month on different kind of expenditures? What will be our maximum spend in the pantry? What amount can we maximum afford in the advertisement expense? Well, it is the Finance Manager who answers all these questions. Because it is usually the Finance team, who is responsible for preparing budgets and forecasts for the entity. These budgets and forecasts are prepared usually on a monthly or yearly basis to ensure financial control over the expenditures of the entity. However, we cannot ignore the input of other departments and managers in preparing budgets. We can say that the Finance manager will prepare the budget in coordination with input from other departments.

 

System changes

With the fast changing technology, all systems are becoming obsolete much faster than the original anticipation. With increased demands from the business and the management, there is a requirement of several new reports which existing systems may not be able to provide. With increased competition and for better costing mechanism, there is a requirement for more smart systems. Whenever there is a change in the system, the Finance manager has to play a pivotal role in the successful implementation of the new systems. They have to be involved in all stages of software change/upgrade like planning, expectation setting, data flow designs, implementation, testing and review after implementation.

 

 

Receivables Management

When the customers have purchased goods/services on credit, and they are not paying themselves. It is usually the Finance team who has to run after them. This chasing and following up to collect the money is a daunting task. In order to achieve this task, Finance Manager will also be looking after all the queries from customers like provision of proper invoices, generating a statement of account, reconciliations, receipts issuance, and allocations.

 

Payables Management

You may be an ethical finance manager who calls your debtors once in a week to remind them of the outstanding amount due. However, your creditors may not be preferring the same approach. A finance manager may receive calls on a daily basis from the same vendor for the outstanding payment. Payables Management may be one of the hard-hitting areas of the finance managers’ duties where he/she may have to listen or respond to unpleasant calls and emails. For all the conflicts for the account balances and the booked/un-booked invoices, finance manager has to play a critical role to sort out the issues.

 

Banking & Financial Management

Financial management is an area which exactly coincides with the word ‘Finance Manager.’ Therefore, the importance of this functionality is self-evident. In brief, in this functionality, the finance manager ensures that the finances of the company are well managed. Financial management means that money is appropriately rotated, the bank account is adequately funded, expenses are well controlled, misappropriation of the money is prohibited, revenues are timely collected, payables are suitably managed, and investments are wisely selected.

 

Product Costing

Do you know how a company decides that what should be the price of their products? Checking the price of a product in a retail market is very easy. However, calculating that price from a company’s perspective is an intricate matter. Do you want to meet the guy who plays a pivotal role in product costing (and thus in product pricing)? Yes, you guessed it right, it is the Finance Manager who is to ensure that proper methods of costing techniques are applied to reach out at the correct pricing for the product.

 

 

General ledger maintenance

This section would cover all the accounting entries being passed promptly, in the correct accounts, with correct amounts and correct descriptions. These tasks are usually done by the team under the Finance Manager. However, the Finance Manager has to ensure that the general ledger is being maintained appropriately. Whenever there is missing account code or a new account code to be created, FM has to ensure that it is created in an appropriate category and sub-category. The users of the G.L should have appropriate access rights only.

 

Team management

A finance manager may be managing a team ranging from a couple of staff to more than 50 persons, depending upon the size of the organization. Team management and people management is one of the critical success factors for a finance manager. If the responsibilities are appropriately allocated, and the resources are effectively utilized, it would be easy for the manager to fulfill its responsibilities successfully. However, if the team is not well balanced, not adequately trained or if there are unresolved conflicts among the team, it would significantly hamper the productivity and performance of the finance manager and the whole finance team.

 

Conclusion

Some organizations may split these responsibilities among different designations like credit controller, costing manager, accounting and reporting manager and finance manager (of course). However, it depends upon the organization’s structure (as stated earlier).

If you are planning to pursue a career as a Finance professional, then the above would give you a hint of how life would be in this career. I can say that a career in Finance is exciting and you’ll have some power being a financial controller of the entity.

If you have already joined the profession and are in an initial stage, the above responsibilities would help you to advance your vision and career. Try to get those responsibilities which are not in your domain yet. The more responsibilities you have, the more valuable you’ll become for the entity.

If you are an owner of an SME business and you are wondering how to hire right finance manager, then don’t base your decision on the right color matching of the tie and the shirt. Instead, try to obtain understanding from the candidates based on the above headings. Let’s know their experience in each of these areas, and this will help you choose the right candidate for the Finance Manager position. The more confident and experienced the candidate is, the better he deserves this position.

 

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