The age old question for every accounting student or young professional seeking a position in public accounting will ask: “What Line Of Business Should I Choose: Audit or Tax?” For some, the answer is simple. For others, it can be a bit more complicated. So we're here to help break down what each entails and what the pros and cons are.
Audit = Logic, evidence, reason
- You tend to work in teams.
- There are a LOT more audit positions than tax. In recent years, the audit industry has grown. Internal audit, IT Audit, and new PCAOB regulations have greatly increased the number of positions available.
- With audit you'll have limitless exit opportunities in various industries and for different types of positions in the accounting world (CFO, Valuation, Controller, IT Audit, Financial Accounting positions, Finance, etc.).
- You see the full picture of the business. In many cases, you are responsible for parts of the tax work as well as the financial statement audit.
- People will ALWAYS ask you, can you do my taxes? You can’t.
- Audit gives you the chance to be yelled at by the client starting day one!
- Being an auditor requires being skeptical and being independent. This can often times be a problem for people who want to “help” the client, or be on their team like a consultant. At the end of the day your goal is to minimize audit risk (the risk of a bad opinion).
- Tends to be quite a bit of travel involved and you almost always have to be at the client sites. While many see this as a pro, over time less people love the travel (though the hotel points are nice).
Tax = Rules, legislation, research
- They tend to pay a bit better for tax since it’s more specialized.
- If you really wish to open up your own firm, tax could be for you. Many small firms are focused on bookkeeping and taxes first! Audits tend to come as you grow.
- Food. The tax team almost always gets the best food catered to the office during busy season.
- Dual, tri, and quad monitors! As you’re always in the office, you typically get the best computer setup.
- In some cases, it may take you a year before you even meet a client.
- There is less teamwork in tax preparation. You are on your own much more than with audits.
- Many (large) firms require a Masters in Taxation.
- There are fewer positions available at larger firms than audit.
- While you want to try and make the best decision for yourself, you can always change. There are countless people who start at small and large firms in one department and move to the other.
Know the type of person you are.
If you are the type of person that enjoys analysis and the need for things to make sense, you may be more of an audit person. If you are someone who enjoys doing things by the book, spending a lot of time researching, and finding solutions to problems, you may be more of a tax person. Too often people associate audit and tax with factors like seeing more clients, working in teams, or future career paths. While these are, of course, important factors to take into consideration when deciding which area to practice, it's equally--if not more--imperative to see what is at the core for each of these fields. So make sure you're looking at both the smaller and bigger picture in your decision.
Get experience so you know which one really suits you.
However, if you're still unsure of which path to take, what we highly recommend is getting any type of experience or additional information from other professionals in the field. Network! Ask them what a typical day in the life of a tax or audit person is like and get to really know what tasks and responsibilities are. This will help when you begin the recruiting process. And audit or tax is a hugely important question that a majority of recruiters will ask you.
Know what recruiters want.
Don’t be fooled by thinking: “If I say audit or tax, I will increase my chances as they will consider me for twice the positions.” In actuality, this will have the opposite effect. The more things you know (where you want to work, when you want to start, audit/tax), the more likely you are to get hired. Firms like someone who knows what they want, has a plan, and is fully prepared.
We hope you all found this article helpful and that you make an informed decision for your future career in public accounting!