Should you work in tax or audit?
If you're near graduation, you may wonder, "Which is best for me? Tax or audit?”
In this article, I provide questions and facts for you to consider as you decide. This decision is one of the most important ones you'll make in your career.
Tax and Audit Career Decision
Here are some thoughts about that decision:
1. Do you like subjectivity or objectivity? Audits tend to have more subjective elements like risk assessment. Tax, on the other hand, tends to be more objective (it's compliance-oriented).
2. Are you willing to work long hours for four months each year? Tax season is an annual marathon. Auditing also has busy seasons, depending on the industries your firm services, but you can more easily distribute your workload in audits.
3. Do you like to travel? Audits usually involve some travel. Tax CPAs spend most of their time in the office, though not all.
4. Do you like accounting? If you work in public accounting, you must understand accounting well to do audits (and other A&A work). You also need to understand accounting for tax purposes, but tax work is more compliance-oriented.
5. Do you like saving individuals and companies money? Tax allows you to have a direct impact on taxes paid (and your clients will love you if you can save them money).
6. Do you like short-term or long-term projects? Tax work tends to be short-term, and audit work tends to be long-term. For instance, you might complete a tax return in four or five hours (sometimes less). Audits can take several hundred hours.
7. Do you like technology? Audits can involve technology more than tax work, though this is a generalization. With audits, you might, for example, use data mining software or Excel for advanced purposes.
Tax and Audit Compensation
You may be wondering which field offers the more significant compensation opportunities. I've seen auditors and tax folks make plenty of money through the years. So, you can do well with either. But being in the field best suited to you will enhance your ability to generate income. Why? Because happy people are more productive and effective. That's one reason choosing the right field--tax or audit--is critical.
Tax and Audit Work Hours
If you've worked in public accounting, you've seen tax people working late into the evenings and on weekends throughout tax season. The tax deadlines lead to compressed work schedules, especially in the early part of the calendar year. But tax people usually get relief in the summer or late in the year.
Audit personnel tend to have steadier workloads, though their work can also be seasonal. For instance, if you work with a firm that does governmental audits, there may be a substantial number of engagements with June 30 and September 30 year-ends, leading to increased workloads later in the calendar year. So check with the firms you interview with to see how the audit workloads vary.
Talk to Auditors and Tax Persons
Talking to auditors and tax people with real-world experience will give you more insight than almost anything you can do. Make a list of questions and ask them as you interview prospective CPA firms.
Learn About Auditing
If you want to learn about auditing quickly, check out my book The Why and How of Auditing on Amazon.