Career Change?

[henson55]

Don,

I read some of your previous answers and am very glad to have found this site.  I graduated from college with a finance degree in Dec. 2006, and currently working as a power trader in an utility company.  I've been full time since I graduated and my salary is already almost 60,000 annually plus 15% bonus.  However, my job is very routine and can be very boring.  Someone suggested me to get a CPA and be an auditor.  I was told auditing involves travelling, networking and learning different things in different industry.  I immediately loved the idea and thought this will not only be a interesting job but also would open up more opportunities for me in the future.  My concern is that it'll take at least 3 years for me to obtain CPA.  By that time I expect the salary at my current job to be at least 70,000.  Should I even bother with the career change if I'm only going to make 50,000 starting out as an auditor? Thanks,

Sophia

[harper]

: see below.

Congratulations on your interest in being an auditor.  There is no question about the CPA certification. If you have a serious interest in the finance field(management, accounting, or audit), then the CPA is like a ‘Golden Passport’.  It is the best possible certification and will open many doors for you.  That said, it is just one of many certifications available to you in the field of finance/accounting/auditing.  It is also the most difficult to obtain and many people choose one of the other certifications that are far less accounting oriented.  In the auditing field, you could do without the CPA and be very, very successful.  In fact, from an auditing perspective, the CIA certification(see below) may better serve you unless you intend to work for one of the major public accounting firms as an external auditor(see below).

Auditing uses a lot of skills so it is very likely that the finance skills you currently have may prove helpful in moving into auditing.  I would not wait for a CPA before making a career change since nearly all certifications require some experience and many auditors obtain certifications as they work.  Your salary depends a lot on where you are located so focus on your goal and expect that the salary will be competitive.  If you expect to start as an entry level auditor then it is better to make the change now when the salary adjustment will not be so severe.  In the long term, you will be pleased with the professional and salary growth opportunities in Auditing.

--OTHER CERTIFICATIONS--

CIA(Certified Internal Auditor), http://snurl.com/cia-cert CGAP(Certified Government Auditing Professional), CFSA(Certified Financial Services Auditor), and CCSA(Certification in Control Self-Assessment), http://snurl.com/iia-spec-certs

CFE(Certified Fraud Examiner), http://snurl.com/cfe-cert

CMA(Certified management Accountant), http://snurl.com/cma-cert

CISA(Certified Information Systems Auditor), CISM(Certified Information Security Manager), and IT Governance certification(CGEIT) - http://snurl.com/isaca-certs

---

There is truly no better way to learn how a company actually works, from the executives all the way down to the hourly laborer. Audit covers it all, and in this profession you should quickly acquire a high degree of business acumen.  Further, Internal Audit is often a “spring board” or “launching pad” for internal promotions and growth within a company and/or industry.

It is important that you fully understand the difference and distinction between Internal Auditors and External Auditors.  There are several differences between internal and external auditors that result in a symbiotic relationship that is both collaborative and adversarial.

In the USA, External Auditors are required by the Security and Exchange Commission(SEC) for publicly traded companies.  Their purpose is to attest to the accuracy of financial statements.  In so doing, they are, by definition, focused on the past(backward looking).

Internal Auditors, on the other hand, are typically more process(solutions) oriented.  As such, they tend to be more focused on the future(forward looking).  Internal Auditors also have a fiduciary relationship to management.  In other words, they are on the same “team” as the company where they work whereas the External Auditors are definitely NOT on the same team.

This means that the Internal Auditors sort of “run interference” for the company to ensure that internal controls exist and are effective so that the External Auditors cannot find anything wrong and issue a negative opinion.

If the External Auditors issue a negative opinion or will not attest to the accuracy of the financial statements then the credit rating of the company goes down(since they are more of a risk to a lender), that follows by an increased cost of capital(borrowing money become more expensive due to a higher interest rate based on the increased risk).  When cost of capital increases, profit decreases as does earnings per share.

Hope this helps.  Paste the following Google advanced search into your browser window for further information about the differences.  http://snurl.com/int-ext-diff

As far as individual advancement, it is best to seek training, education, experience, and credentials.  Join the professional associations available to you.  Some of the best known are: - Institute of Internal Auditors(www.theiia.org) - Information Systems Audit and Control Association(www.isaca.org) - Association of Certified Fraud Examiners(http://www.acfe.com) - American Institute of Certified Public Accountants(http://www.aicpa.org/)

There is good training from many sources including local colleges.  Here is a link to training resources:  http://snurl.com/audit-tng

You would not necessarily start at the bottom when you enter auditing.  Audit is simply comparing ‘what is’ to ‘what should be’ so any experience you have that is similar to that(QA, Sales audits, Inspections, etc) will be considered for your job placement.

In the US, the job prospects for internal auditors are excellent due to the Sarbanes-Oxley(SOX) legislation that was passed by congress in the wake of several big accounting scandals.  Here is a link that will provide US salary data for virtually any job.  See http://www.bls.gov/oco/home.htm for the information.

Your best bet is to look for a company that is recruiting college graduates into a near entry-level position.  These are typically the major accounting firms.  There are different opinions as to which path is better… to gain major accounting firm experience or to go directly into industry.  Generally, the major accounting firms offer fast experience but they usually have extraordinary demands on your time and most new employees leave within two years because they become “burnt out” and want a life of their own.  Going directly into industry offers a chance to learn a particular business or industry and to interact with external audit firms(major accounting firms).  Industry jobs are usually less stressful yet offer opportunity for professional growth and, more importantly, the opportunity to move into other areas of the company that you might find appealing.

Interviewing for a job is as much an art form as it is a science.  Every employer wants a twenty year old professional that has twenty years experience.  You will find that questions asked will be focused on any specific experience you might have on your resume(hint - get some experience even if it is being the treasurer of a club or a part-time bookkeeper or a volunteer tax preparer; you need not disclose that it was a non-paid position) and they will also focus on current events in the industry such as legislation and the impact it has on the profession.  Finally, you will be asked about audit related items such as sampling techniques, how to develop a finding(the six elements of a reportable finding are Condition, Cause, Impact or materiality(the “so what” question), Support/proof, Criterion, and Recommendation).

I have placed some questions below that are frequently used in the interview process.  Hope this helps.  Remember, don’t be afraid to admit that you don't have any practical experience, but then make sure to "dazzle" them with your work ethic and attitude. Interviews are all about the personality fit, although it always seems like it is about the skill set. Always, always, always stay positive and confident.

Best of luck to you!

s follow:

--- Set 1 ---

Audit Interview s

Thinking Skills

•   Describe one of the most difficult or complicated problems or issues you have faced recently.

•   How did you become aware of the issue?

•   What information did you collect?

•   What solution did you reach?

•   How did it work out?

•   Tell me about an interesting issue or topic you’ve spent time learning about that is outside of your primary area of expertise.

•   Tell me about the toughest problem you’ve faced where the economic issues were at least as important as the technical ones.

•   Tell me about a time you made a decision or handled an assignment where the procedures or instructions you had been given were unclear, ambiguous, or contradictory.

•   Describe an unusual or creative approach you have taken to solving a problem.

Humility, Adaptability and Collaboration

•   Tell me about a recent time when someone didn’t agree with your approach to or analysis of a problem, but where your analysis proved to be right.(H)

•   What were the circumstances?

•   What was your approach?

•   How did you learn about the other person’s disagreement?

•   What did you do?

•   How did it all turn out?

•   Tell me about a time when you went along with the group’s wishes, even though you had serious reservations about what they wanted to do.(C)

•   Describe a time when you reacted constructively to criticism you received about your work.(H)

•   Sometimes priorities at work or at school change pretty quickly. How have you had to shift priorities and how effectively do you feel you handled these shifts?(A)

•   Tell me about a time when you used a different approach to handle an assignment because the usual method was not completely appropriate.(A)

•   Describe the most frustrating group project you have worked on where the group had difficulty accomplishing anything.(C)

Motivation

•   Tell me about a recent time you did something important because it needed to be done, even if it wasn't your responsibility.

•   How did it come to your attention that something needed to be done?

•   What exactly did you do?

•   How much effort was required on your part?

•   What level of urgency did you feel?

•   What other things did you have to set aside in order to attend to this issue or problem?

•   What was the end result?

•   What feedback, if any, did you get regarding your actions?

•   Give me a good example of when you demonstrated initiative, that is, you set out to learn something or do something without having anyone else prompt you or remind you.

•   Describe a situation where you set challenging objectives for yourself and accomplished them.

•   Tell me about the biggest risk you have taken recently.

•   Describe a time recently when you put in more time and effort than was required or expected.

Consulting Orientation

•   Tell me about the most difficult or unreasonable client(or other person) you’ve dealt with recently.

•   What was the situation?

•   What made the person so difficult to deal with?

•   What was your approach?

•   How did the person react?

•   How did the situation turn out?

•   Have you had additional interactions with this person since that time?

•   Tell me about the time when you had an important job(task, project) to accomplish and had to deal with lots of competing demands for your attention.

•   Tell me about a recent situation that best reflects your business orientation.

•   Tell me about a time when you were not successful in your efforts and it seemed like the "cards were stacked against you."

•   Tell me about a time when you refused to take "the easy way out"–you avoided compromising yourself and your values even though it would have given you a short-term advantage.

•   Tell me about the most disappointing time for you when you got less credit or recognition than you felt you deserved.

Knowledge

•   What types of things have you done that illustrate your ability to apply the technical information and concepts you have learned at school to "real world" issues or problems?

•   What was the problem or issue you faced?

•   What technical information or concepts were necessary?

•   In what way did you apply them to the problem?

•   What additional knowledge would have been helpful to have?

•   What feedback did you receive about how you handled problem or issue?

•   What do you do to keep up on new trends and developments in your field?

•   Describe a time when you accomplished very high quality technical work in a short period of time.

•   Tell me about the last time you had difficulty with a particular task or project because you lacked the necessary technical skills.

•   Describe a recent time that you were unexpectedly asked to articulate a complicated concept.

TECHNICAL ISSUES:

•   What would you say are the key differentiators between internal and external audit? •   What is your philosophy/understanding about the modern day internal auditor’s roles and responsibilities – name the key ones? •   What do you understand by the term “value added”? •   What do you understand by the term “auditor independence/objectivity”? •   What do you understand by the terms “providing assurance and consulting services”?  What are the key differences? •   What is your understanding of the term “CPD” and what benefits are there /why is it important, for an Internal Auditor? •   What in your opinion are the meanings/differences between being effective, efficient and economical? •   What are the key phases in a risk based internal audit methodology? •   What is your understanding of the key aspects of King 2 / COSO / Turnbull / SOX? •   In the event that our roles were reversed and you were interviewing me for a vacancy, would you consider accounting skills, general business management skills or internal auditing skills a prerequisite….why? SOFT SKILLS ISSUES:

•   How do you manage confrontational situations in the workplace, whether between audit staff or audit staff and client management? Provide a real life example. •   How would you deal / interact with an autocratic manager? Provide a real life example. •   How would you describe your management style? Provide a real life example/s. •   How do you make decisions – in a crisis situation and under normal working pressures? Provide a real life example. •   In your opinion, is being attentive critical for an Internal Auditor….why? •   In a nutshell, how would you describe yourself….provide both strengths as well as weaknesses and development areas? •   What is your understanding of the term “teamwork” and how would you contribute to / manage staff productivity in the workplace? GENERAL:

•   What exposure to business / internal audit report writing have you had? •   What exposure to working with computers have you had? •   What software packages have you worked on? •   Are you a member of any Professional Bodies? •   Where do you see your career taking you in the immediate, medium and long term? •   What is your opinion on the term “balance of work and home life”? •   Would you be prepared to travel out-of-town on business as and when required? •   What is your opinion on the current local economy?…and global? •   Why should I select you as the successful candidate for this position? •   Are you familiar with our company / related industry? In your opinion, what would five key risks be to our company / industry? •   What in your opinion are the key “selling” tools of an Internal Auditor i.e. what makes an Internal Auditor successful in business?

CLOSURE:

•   Any questions from your side? --- Set 2 ---

•   Give me a specific example of a time when you used good judgment and logic in solving a problem. [This question probes for the candidate's ability to employ critical thinking, adaptability and insight.]

•   Tell me about a time when you delegated a project effectively. [Here, you want an example that demonstrates the candidate's communication skills, the ability to show leadership and exert influence, rapport building skills and sales ability or persuasiveness. All these skills and personality traits would have to be employed to get the "buy in" from the staff.]

•   Describe a time when you to had to take action without enough information to be certain of your direction. [This question is designed to probe a candidate's ability to think on one's feet, to be able to go with one's instincts and take action even in a state of ambiguity.]

•   Tell me about a time when you encountered resistance or even rejection of your ideas. [What you're looking for in asking this open-ended question are several important skills and personality traits. Is the person tenacious enough to pursue the implementation of their idea even in the face of rejection? Does he or she have the people skills to find out the other person's concerns? Can the candidate ultimately re-work the idea, or negotiate it, so that it retains the essence of the original, but still satisfies the boss's concerns?]

•   Give me an example of when you showed initiative and took the lead. [Is this person a self-starter? Is entrepreneurial spirit displayed? Is self-confidence to initiate this action exhibited? Is this candidate willing to take a risk for a potentially large return?]

•   Tell me about a recent situation in which you had to deal with a very upset customer or co-worker. [Here you are trying to evaluate the candidate's listening skills, sensitivity and professionalism. Can this person gain control of the situation? Does he or she have the fact-finding skills to get the whole picture and ultimately, the negotiating skills to resolve the issue?]

•   Tell me about a time when you were forced to make an unpopular decision. [Can this candidate be decisive and make decisions independently? Does this person have the integrity to go with a gut feeling, and stand by this decision?]

•   Tell me about a time when you found yourself in a particularly stressful situation at work and how you handled it. [Here, you're probing to see how well the candidate works under pressure. You want to evaluate the candidate's deadline orientation, sense of urgency and ability to work under pressure.]

•   Please discuss an important written document you were required to complete. [The crucial skills you're probing for here are: written communication skills, attention to detail, analysis, planning and organizational skills, technical/professional knowledge and work standards.]

•   Give me an example of a time when you motivated others. [Can this candidate develop subordinates and delegate effectively? Does he or she have the management skills needed to motivate others?] --- Set 3 ---

?   Take us through your resume. ?   What unique skills or knowledge can you contribute to our company?

?   What additional training/experience will you need in order to perform the duties of this position? PROFESSIONAL/CONSULTING ORIENTATION

?   Tell me about the most difficult or unreasonable client(or other person) you’ve dealt with recently.

?   What was the situation & what made the person so difficult to deal with?

?   What was your approach & how did the person react?

?   How did the situation turn out?

?   Tell me about the time when you had an important job(task, project) to accomplish and had to deal with lots of competing demands for your attention.

?   How did you resolve the conflicting priorities?

?   What does auditing mean to you?

?   What do you understand by the term “auditor independence/objectivity”? ?   How do you understand “value added” and does it have any relevance to auditing?

?   What would you say are the key differentiators between internal and external audit?

?   What, exactly, is “materiality”?

?   What if an auditee disagrees with your findings & gets upset during an exit conference?

?   What specifically have you done - not just managed - with respect to Sarbanes-Oxley?

SOFT SKILLS ISSUES:

?   How do you take criticism of your work?

?   One expression often found in job descriptions and consulting agreements is “Other duties as assigned”.  How do you feel about this?

?   “It’s amazing how much can be accomplished if you don’t care who gets credit”.  Do you agree/disagree with this and why?

?   Tell me about the most disappointing time for you when you got less credit or recognition than you felt you deserved.

?   Who did get the credit; another person or the team(if a team was involved)?

TECHNICAL SKILLS(BUS & IT/IS)

?   Given an audit universe, how would you approach risk assessment?(Business & IT/IS)

?   How would you construct a testing matrix?  What elements would it contain?

?   Please explain document cross referencing and how you might do it.

?   What is the relationship between the COSO & COBIT frameworks?

?   Is there a difference between the “data owner” and “data custodian”? If so, what are the implications?

?   How would you explain the distinction between “General Computer Controls” and “Application Controls”?

?   What is the difference between change control and source code control and are they important?  If so, why?

CLOSURE:

?   Any questions from your side?

--- Set 4 ---

Interview s for staff auditors

1.   Take us through your resume. 2.   If we were to call your current supervisor, in which area of accounting would he or she say is your strongest?  Which area would he or she say is your weakest? 3.   What unique skills or knowledge can you contribute to our company? 4.   What additional training or experience will we need to provide you with in order to perform the duties of this position? 5.   When do you plan on attaining your CPA?  What steps will you take to prepare yourself? 6.   Give us an example of how you have used your creativity or resourcefulness to solve a problem on the job. 7.   Tell us about a time you put your foot in your mouth.  Follow on... what did you learn from that?

8.   Why "Audit" and not "Tax" or “Accounting”?

9.   What does auditing mean to you?

10.   What aspect of accounting/auditing do you dislike the most?

11.   Please explain cross referencing and how you would do it.

12.   How do you handle it when an auditee gets upset during an exit conference and disagrees with your findings?

13.   Generally speaking an audit finding has several elements that must exist in order for it to be a reportable finding.  What are they?   [Condition, Cause, Criterion, Impact, Proof/Support, Recommendation]  

[Hale]

Sophia,

Short answer: Yes, AND a CPA is not required for a successful & satisfying audit career.

Long