"Deferred Compensation Structure"
The big four accounting firms operate under a deferred compensation structure where the large chunk of your compensation is not paid in cash as a year end bonus, but rather the compensation comes in the form of a balloon raise upon making partner, and an outstanding pension program.
Once you make partner, you can expect more than a 100% raise. Typical partners in my office, and practice, start at a salary of $350, which is a 133% raise from a typical senior manager's salary of $150. Further, the partnership provides all partners a defined benefit pension plan, where the benefits paid are a certain percentage of your three highest year's salary. For example, I have heard of retired partners earning 40% of the average of their three highest year's compensation, which was $2,000. They get to take home $800 a year for the rest of their lives. What is the value of a guaranteed $800/yr annuity beginning at age 55? What kind of banker or trader get's that kind of deal?
The true compensation and profits in accounting accrue to the partners of the firms over time. If you are not planning on staying at the firm for the long run, all of the earnings you are working for are accruing to the firm, and you wont realize any of them. Decide sooner rather than later if you want to stick it out; otherwise you are being squeezed for your profits in the partner's pyramid business model.
Friday, June 7, 2013
Day in the Life of a Big 4 Auditor
So I've decided to document a 'day in the life' of a senior associate in at a Big 4 firm during a typical day in busy season. Days are typically filled with a ridiculous amount of noise from conference calls on speaker phone, speed walking through the office to collect documents and speak with client executives, and, very often, trips back and forth from the client to the firm's headquarters to speak with partners and senior managers. The audit room is often as hectic as a trading floor, except its full of accountants.
7:30am Wake up
8:30am Leave For Work
8:50am Arrive at the client's conference room
8:50-9am Get Set Up
-Boot up computer, get a cup of coffee from the kitchen. Maybe eat the bagel you picked up on your way to work.
9-12pm Audit
-Open up email and check for the status update from the India staff who have been working on your work-papers all night, per your instructions last night.
-Get on call with India and briefly walk through the work performed before it gets too late in Mumbai and they go home.
-Check in with the staff on the team and ensure they are actually doing the work you need them to do, assess staff's mental stability
-Coordinate the conference call with the audit manager, the firm's valuation team and the client's Middle Office VP to discuss a valuation difference on the one of the sample swaption positions.
-Write a memo explaining, in 'auditing speak', the resolution to the swaption valuation difference for the audit files.
-Answer the staff's questions on how to prepare the work you assigned him, explain high level concepts and how the client's business works so the ridiculous detail excel file he is staring at all day makes sense and is in perspective.
-Respond to the manager's constant questions and 'review comments'. This is probably the most frustrating part of the job. You honestly can't get any work real work done as long as the manager or senior manager is in the conference room. Your job is to be their bitch, and answer all of their questions. You'll have all night to finish the actual work..
12-12:30pm Lunch
-Run out of the building and grab a sandwich or a salad
-Eat at the conference table as a team, pretend to work, read the news, desperately search job boards, send out job applications.
-Review financial statements, provide comments, discuss issues with managers. Copy,paste and consolidate the Partner's, Managers' and your own comments on the financials onto a single copy.
-Review the staff's work papers
12:30-6pm Audit More!
-The afternoon is where things get most intense. This is when most client meetings are scheduled, when managers typically have to leave for other meetings and are trying to squeeze in all the work they didn't finish earlier.
-Often lunch is delayed to the later afternoon, and dinner delayed to 7 or 8pm due to meetings scheduled in the early afternoon.
6-6:30pm Dinner
-Instant message your staff back with your dinner selection, and anxoiusly await the delivery man
- Grab your dinner from the bag the Staff just retrieved from the front desk at the building
-Eat at the conference table, read more news, facebook, gmail
6:30-11pm Audit Even More!
- After dinner is when the real work gets done.
-'Tick and Tie' audit work-papers to third party supporting statements. This process involves matching numbers between a 'external document', such as a bank statement, to the clients accounting records, such as a bank reconciliation. It is tedious, mind-numbing, soul-crushing, and 99% of what auditing is.
-Luckily, the big firms have teams of people in India who can perform this work for us, while we sleep. Our only responsibility is to write detailed instructions via email, and review the finished product.
-Write detailed instructions to our Indian team members on how to perform the tie-outs we need performed for the next morning.
11-11:15pm Cab ride home
11:15pm-12am Get ready for bed, some TV or reading, maybe chat with the roommate
12-7:30am Sleep
7:30am Wake up
8:30am Leave For Work
8:50am Arrive at the client's conference room
8:50-9am Get Set Up
-Boot up computer, get a cup of coffee from the kitchen. Maybe eat the bagel you picked up on your way to work.
9-12pm Audit
-Open up email and check for the status update from the India staff who have been working on your work-papers all night, per your instructions last night.
-Get on call with India and briefly walk through the work performed before it gets too late in Mumbai and they go home.
-Check in with the staff on the team and ensure they are actually doing the work you need them to do, assess staff's mental stability
-Coordinate the conference call with the audit manager, the firm's valuation team and the client's Middle Office VP to discuss a valuation difference on the one of the sample swaption positions.
-Write a memo explaining, in 'auditing speak', the resolution to the swaption valuation difference for the audit files.
-Answer the staff's questions on how to prepare the work you assigned him, explain high level concepts and how the client's business works so the ridiculous detail excel file he is staring at all day makes sense and is in perspective.
-Respond to the manager's constant questions and 'review comments'. This is probably the most frustrating part of the job. You honestly can't get any work real work done as long as the manager or senior manager is in the conference room. Your job is to be their bitch, and answer all of their questions. You'll have all night to finish the actual work..
12-12:30pm Lunch
-Run out of the building and grab a sandwich or a salad
-Eat at the conference table as a team, pretend to work, read the news, desperately search job boards, send out job applications.
-Review financial statements, provide comments, discuss issues with managers. Copy,paste and consolidate the Partner's, Managers' and your own comments on the financials onto a single copy.
-Review the staff's work papers
12:30-6pm Audit More!
-The afternoon is where things get most intense. This is when most client meetings are scheduled, when managers typically have to leave for other meetings and are trying to squeeze in all the work they didn't finish earlier.
-Often lunch is delayed to the later afternoon, and dinner delayed to 7 or 8pm due to meetings scheduled in the early afternoon.
6-6:30pm Dinner
-Instant message your staff back with your dinner selection, and anxoiusly await the delivery man
- Grab your dinner from the bag the Staff just retrieved from the front desk at the building
-Eat at the conference table, read more news, facebook, gmail
6:30-11pm Audit Even More!
- After dinner is when the real work gets done.
-'Tick and Tie' audit work-papers to third party supporting statements. This process involves matching numbers between a 'external document', such as a bank statement, to the clients accounting records, such as a bank reconciliation. It is tedious, mind-numbing, soul-crushing, and 99% of what auditing is.
-Luckily, the big firms have teams of people in India who can perform this work for us, while we sleep. Our only responsibility is to write detailed instructions via email, and review the finished product.
-Write detailed instructions to our Indian team members on how to perform the tie-outs we need performed for the next morning.
11-11:15pm Cab ride home
11:15pm-12am Get ready for bed, some TV or reading, maybe chat with the roommate
12-7:30am Sleep
Self Improvement
Self improvement is a illogical process. It implies that you are not good enough, it implies that you are trying to change the way you are perceived in order to gain acceptance from others.
“No amount of self-improvement can make up for any lack of self-acceptance.”- Robert Holden
"If you are not happy with yourself, even the loftiest achievements won't bring you much satisfaction."- Ben Bernanke
“No amount of self-improvement can make up for any lack of self-acceptance.”- Robert Holden
"If you are not happy with yourself, even the loftiest achievements won't bring you much satisfaction."- Ben Bernanke
Big Ben's Commencement Speech
Ben Bernanke is a very smart, and more importantly, a very wise man. His commencement speech at Princeton this year is probably the first time Ben opened up and spoke honestly, as his current occupation doesn't allow him to make many unrehearsed public statements. He speaks about life, expectations and aspirations of the current college graduates, and addresses life's biggest questions and graciously offers his answers. I urge you to take 10 minutes to read what he had to say. Some of my favorite quotes:
"A career decision based only on money and not on love of the work or a desire to make a difference is a recipe for unhappiness." - Ben Bernanke
"If you are not happy with yourself, even the loftiest achievements won't bring you much satisfaction." - Ben Bernanke
http://www.federalreserve.gov/newsevents/speech/bernanke20130602a.htm#fn1
Friday, May 17, 2013
Leave Public Accounting Today
“The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.” - Steve Jobs
Honestly, do you love accounting? Cash Reconciliations, Financial Statement Tie-Outs, Month End Closes, Year End Closes, Audits, Journal Entries, Ledgers? Debits and Credits?
Are you passionate, or are you comfortable? Does your psychological need for comfort and stability outweigh your need to feel fulfilled and satisfied?
Are you settling? If you don't love accounting, get the fuck out. "The mass of men lead lives of quiet desperation."
Lets be honest though, most of you are going to get back to your tie-outs and checklists like the fucking Melvins you all are. Make sure you eat lunch at your desk, stay past dinner, and come in early to that windowless conference room next to the copier. Fucking back office monkey. Enjoy your year end bonuses and working all that unpaid overtime 4 months a year.
Life is pledging. The shitty parts don't end until you decide to grow a pair and you end it yourself. Be a man. Take control of your career and your life.
Don't settle.
Lets be honest though, most of you are going to get back to your tie-outs and checklists like the fucking Melvins you all are. Make sure you eat lunch at your desk, stay past dinner, and come in early to that windowless conference room next to the copier. Fucking back office monkey. Enjoy your year end bonuses and working all that unpaid overtime 4 months a year.
Life is pledging. The shitty parts don't end until you decide to grow a pair and you end it yourself. Be a man. Take control of your career and your life.
Don't settle.
Tuesday, May 14, 2013
Tiger Woods
Tiger Woods is an amazing dude, but not for the reasons you might think. Sure he is the greatest golfer to ever live, and he's such a boss that even a supermodel wife can't satisfy his sexual appetite. He is a black man dominating the white man's country club game, and banging-out their blondes.
Beyond the golfing, I think Tiger is amazing for his self awareness(which is actually a part of the golf game). After winning The Players Championship this weekend, Tiger completed his contractual obligation: the post win press conference. His recall of each and every shot of the day, hole locations, wind direction, standings, etc. is unreal. What is most impressive I think is the way he thinks about himself. He constantly refers to himself in the 3rd person, and even when he speaks in the first person, its as if the 'I' he is referencing is the golfer/athlete, and the person speaking is his manager.
He knows that when he did mishit the ball this weekend it was always fat, so he made sure that whenever his lie was not perfect, he hit in a direction that gave him some margin on the long side. Fascinating that he makes a study of himself. Its not that 'he personally' mishit the ball, its that his 'athlete self' was a little off this weekend, and in order to compensate, his logical self needed to adjust for this issue. Its fascinating to see an interview with someone who's job is to be an expert on himself, his body and his emotions, who is required keep his emotions and nerves in check, and stay in the moment while under the tremendous pressure of million dollar prizes, and golfing legacy. Amazing.
Beyond the golfing, I think Tiger is amazing for his self awareness(which is actually a part of the golf game). After winning The Players Championship this weekend, Tiger completed his contractual obligation: the post win press conference. His recall of each and every shot of the day, hole locations, wind direction, standings, etc. is unreal. What is most impressive I think is the way he thinks about himself. He constantly refers to himself in the 3rd person, and even when he speaks in the first person, its as if the 'I' he is referencing is the golfer/athlete, and the person speaking is his manager.
He knows that when he did mishit the ball this weekend it was always fat, so he made sure that whenever his lie was not perfect, he hit in a direction that gave him some margin on the long side. Fascinating that he makes a study of himself. Its not that 'he personally' mishit the ball, its that his 'athlete self' was a little off this weekend, and in order to compensate, his logical self needed to adjust for this issue. Its fascinating to see an interview with someone who's job is to be an expert on himself, his body and his emotions, who is required keep his emotions and nerves in check, and stay in the moment while under the tremendous pressure of million dollar prizes, and golfing legacy. Amazing.
My Deepest Darkest Fear
Everything anyone says or does is a result of some underlying psychological reason.
What if the reason I write these ridiculous blog posts is because I'm afraid of facing the truth: that I actually enjoy accounting.
What if accounting's trade-off of medium hours and moderate career risk is actually just right for me. What if I made the right decision in college and pursued accounting because I find it interesting, challenging and dynamic? What if I am where I'm supposed to be? Can I accept myself as an accountant, or do I need to feed my ego with a 'front office' job title somewhere?
The shittiest parts of auditing are: (1) dealing with 'bosses' who are 25-30 years old who were promoted based on seniority, (2) doing tedious bitch work for seemingly no purpose, (3) working long hours for the sake of face-time,(4) mind numbing and tedious checklists, (5) . All of these shitty parts are not applicable to a job in industry where you can manage the accounting for an actual firm, make decisions and have input into the business operations of the firm.
Stepping out on the 'career risk curve' a little bit and looking at assistant controller spots at smaller hedge funds might actually be what I need right now. Equity research sounds intriguing and fascinating, but really, what I hate the most about my job is the tedious detail work. Equity research is 100% detail work. Equity research gives you no operational experience Accounting puts you in the trenches, at the office, managing the business day to day.
I want to manage high level. Manage a process, build a team, provide strategic input, and be involved in the operations. Maybe I am on the career path I want. I used to be so excited about starting this job, and then they slam you with two years of staff work. Now that the staff work is over, I can start focusing on the parts of the job I actually enjoy. Maybe?
I'm thinking I might interview for some hedge fund assistant controller spots. See what's out there.
Monday, May 13, 2013
Auditors' Colored Pencils
Fuck Colored Pencils.
Colored Pencils are the pledge pins of public accounting. They are the wooden rifles of boot camp. They are the tell tale sign of the rookie office bitch.
I'm currently sitting next to a staff who is relentlessly documenting a stack of work papers(read: adding marks in different colors, showing where numbers agree to each other across documents). Every three seconds, she slams down the red pencil, picks up the blue pencil, then the normal pencil. Its funny how tedious her work is, but its also sad, because that is my job too. The only difference is that I graduated to double checking her colored pencil marks, and using pdf editor instead of paper.
Thinking about color pencils and tick-marks makes me sick. Why am I doing this job? What the fuck am I doing here?
Colored Pencils are the pledge pins of public accounting. They are the wooden rifles of boot camp. They are the tell tale sign of the rookie office bitch.
I'm currently sitting next to a staff who is relentlessly documenting a stack of work papers(read: adding marks in different colors, showing where numbers agree to each other across documents). Every three seconds, she slams down the red pencil, picks up the blue pencil, then the normal pencil. Its funny how tedious her work is, but its also sad, because that is my job too. The only difference is that I graduated to double checking her colored pencil marks, and using pdf editor instead of paper.
Thinking about color pencils and tick-marks makes me sick. Why am I doing this job? What the fuck am I doing here?
Thursday, May 2, 2013
Public Accounting Hazing
Fixed Asset Testing
I need you to go test the coy pond in the lobby. The fish will swim around, but you need to count exactly how many fish there are in the tank, and make an assessment of any impairment the client should book against the fish. Do they look malnourished or sick? Are they too fat? Each healthy fish is worth approximately $200. So put together a Coy Pond Fixed Asset schedule, and also try to prepare an impairment checklist that we can roll forward to improve the efficiency of the testing for next year. Thanks.
Please go verify the existence of the parking spaces in the lot downstairs. We need a count of how many spaces there are for our depreciation schedule. Thanks
The un-footable schedule
Have the staff/intern/general office bitch try to re-foot a hard copy schedule that doesn't actually foot. They will spend hours doing manual data entry into excel, and checking and rechecking their input to make sure they didn't mess it up. This is a humorous and cruel prank.
I need you to go test the coy pond in the lobby. The fish will swim around, but you need to count exactly how many fish there are in the tank, and make an assessment of any impairment the client should book against the fish. Do they look malnourished or sick? Are they too fat? Each healthy fish is worth approximately $200. So put together a Coy Pond Fixed Asset schedule, and also try to prepare an impairment checklist that we can roll forward to improve the efficiency of the testing for next year. Thanks.
Please go verify the existence of the parking spaces in the lot downstairs. We need a count of how many spaces there are for our depreciation schedule. Thanks
The un-footable schedule
Have the staff/intern/general office bitch try to re-foot a hard copy schedule that doesn't actually foot. They will spend hours doing manual data entry into excel, and checking and rechecking their input to make sure they didn't mess it up. This is a humorous and cruel prank.
I Hate Public Accounting
By far, the very worst part of the job is dealing with incompetent people. People who's highest achievement in life is getting passing scores of 75 on the CPA exam after multiple attempts. They haven't the brains or ambition to do anything other than back-office monkey work. They are terrible at their jobs, lack the high level understanding of the auditing business, let alone their client's business. All they care about is checklists and balancing the debits and credits. They are miserable managers.
Being a Senior in a public accounting firm is typically the first, and last, time a lot of these accountants will ever have any supervisory responsibility. 95% of them will not handle it, and leave the firm to be staff accountants in their client's industry. But for the time they are they 'boss', they are miserable people. Imagine having a boss that knows less than you do, just shit all over you and take all the credit when something gets done. Not for nothing, the female seniors are the worst. Its actually a knock against our western culture in general, that girls never get supervisory or leadership positions very often, before they are thrown into corporate america.
ACTUAL QUOTES FROM AN INCOMPETENT SENIOR:
"I totally forgot to email you this document yesterday. Sorry, but you should have reminded me. I forget things."
"I'm going to let you run with this project on your own, but make sure that you ask me any questions you might have if you don't get something within the first ten minutes, and we can figure it out together."
"We have a call at 10.
Staff-Do you want me to dial in?
No, its more for the client than for us.
Staff-Ok, so no then?
Just send me the updated outstanding items list asap so I know whats going on for the call."
"Is project X done?
Staff-No, I was working on project Y for the last 3 days because our manager told me to prioritize it.
If you needed help, you should have communicated that to me
Staff-I don't need help, I just didn't do X because your boss gave me higher priority work. Isn't the communication issue more between you and the manager? "
Being a Senior in a public accounting firm is typically the first, and last, time a lot of these accountants will ever have any supervisory responsibility. 95% of them will not handle it, and leave the firm to be staff accountants in their client's industry. But for the time they are they 'boss', they are miserable people. Imagine having a boss that knows less than you do, just shit all over you and take all the credit when something gets done. Not for nothing, the female seniors are the worst. Its actually a knock against our western culture in general, that girls never get supervisory or leadership positions very often, before they are thrown into corporate america.
ACTUAL QUOTES FROM AN INCOMPETENT SENIOR:
"I totally forgot to email you this document yesterday. Sorry, but you should have reminded me. I forget things."
"I'm going to let you run with this project on your own, but make sure that you ask me any questions you might have if you don't get something within the first ten minutes, and we can figure it out together."
"We have a call at 10.
Staff-Do you want me to dial in?
No, its more for the client than for us.
Staff-Ok, so no then?
Just send me the updated outstanding items list asap so I know whats going on for the call."
"Is project X done?
Staff-No, I was working on project Y for the last 3 days because our manager told me to prioritize it.
If you needed help, you should have communicated that to me
Staff-I don't need help, I just didn't do X because your boss gave me higher priority work. Isn't the communication issue more between you and the manager? "
Wednesday, April 24, 2013
Busy, busy auditors. What are they doing?
“It’s not enough to be busy; so are the ants. The question is: what are we busy about?” -Henry David Thoreau
What the fuck are you doing with your life? Why are you so stressed about financial statements and accounting work-papers?
What the fuck are you doing with your life? Why are you so stressed about financial statements and accounting work-papers?
Let Your Ideal Self Go
“To wish you were someone else is to waste the person you are.” -Sven Goren Eriksson
“Waking up to who you are requires letting go of who you imagine yourself to be.” -Alan Watts
“Waking up to who you are requires letting go of who you imagine yourself to be.” -Alan Watts
Envision the man you want to be. Seriously though. Envision the details. What does he do for a living. What does he value. What are his hobbies. How does he treat himself, his friends and his family?
Now get rid of this guy. He is an ideal and he is making you miserable. You're not him, and even if you actually achieve being him, you will adjust your ideal such that your work is never done. You are setting yourself up for disappointment, and worse, this ideal self is skewing your perception of your true self. This ideal is causing your super-ego to constantly give you feedback on what you 'should' be doing. Don't 'should on yourself'. It sucks, and it makes you miserable. Learn about who you actually are, not who you think you should be.
Be nice to you, and let your ideal you go. Improve yourself, and set goals, but not with the intention of becoming perfect or achieving anything in particular. Do things because they make you happy. Do things because you want to be better tomorrow than you are today, not because you are chasing an unrealistic expectation Be nice to you. “You, yourself, as much as anybody else in the entire universe, deserve your love and affection.” -Buddha
Now get rid of this guy. He is an ideal and he is making you miserable. You're not him, and even if you actually achieve being him, you will adjust your ideal such that your work is never done. You are setting yourself up for disappointment, and worse, this ideal self is skewing your perception of your true self. This ideal is causing your super-ego to constantly give you feedback on what you 'should' be doing. Don't 'should on yourself'. It sucks, and it makes you miserable. Learn about who you actually are, not who you think you should be.
Be nice to you, and let your ideal you go. Improve yourself, and set goals, but not with the intention of becoming perfect or achieving anything in particular. Do things because they make you happy. Do things because you want to be better tomorrow than you are today, not because you are chasing an unrealistic expectation Be nice to you. “You, yourself, as much as anybody else in the entire universe, deserve your love and affection.” -Buddha
Monday, April 22, 2013
Accountants are Drones
Don't be a drone. I have to work with these people every day. They tend to fall into one of three categories:
1. Complete drones. They never thought about their lives or what they wanted to do. They are 'Milton' from the classic movie Office Space. These kids drink most of the corporate Kool-Aid because they don't understand life well enough to know that business is business.
2. "9 to 5ers". These are the majority of the people I work with. They have no aspirations to be partner or be a part of the C-suite in industry, nor are they willing to work the hours required to earn those roles. These staff and senior auditors are simply paying their "Big4 dues" so they can land that nice six figure private staff accountant job, working 40 hours a week. Either that, or they are looking to find a nice banker, lawyer, or doctor to settle down with. Auditing really expands your network of potential spouses currently employed in the financial services industry. Mostly these people are sacrificing their happiness for a comfortable life from 5 to 9.
3. Smart kids. These are the future partners of the firm, or the future CFOs. They are either spending their weekends contemplating how to get requisitioned on the most prestigious clients at the firm, or taking MBA classes, or studying for additional certifications. They are active in the labor market, interviewing and keeping in touch with recruiters to get a feel for the real market value of their services. They understand the nature of the firm. The firm uses you, and you use the firm. Its just business. They come off as having drank the Kool-aid, but really they tossed it on the ground when no one was looking. Or they slipped it to some drone.
1. Complete drones. They never thought about their lives or what they wanted to do. They are 'Milton' from the classic movie Office Space. These kids drink most of the corporate Kool-Aid because they don't understand life well enough to know that business is business.
2. "9 to 5ers". These are the majority of the people I work with. They have no aspirations to be partner or be a part of the C-suite in industry, nor are they willing to work the hours required to earn those roles. These staff and senior auditors are simply paying their "Big4 dues" so they can land that nice six figure private staff accountant job, working 40 hours a week. Either that, or they are looking to find a nice banker, lawyer, or doctor to settle down with. Auditing really expands your network of potential spouses currently employed in the financial services industry. Mostly these people are sacrificing their happiness for a comfortable life from 5 to 9.
3. Smart kids. These are the future partners of the firm, or the future CFOs. They are either spending their weekends contemplating how to get requisitioned on the most prestigious clients at the firm, or taking MBA classes, or studying for additional certifications. They are active in the labor market, interviewing and keeping in touch with recruiters to get a feel for the real market value of their services. They understand the nature of the firm. The firm uses you, and you use the firm. Its just business. They come off as having drank the Kool-aid, but really they tossed it on the ground when no one was looking. Or they slipped it to some drone.
Tuesday, April 9, 2013
Never Forget.. Busy Season
People forget so quickly. The easy hours, low stress, and free happy hours help.
Busy Season ends, and you spend the weekend enjoying copious libations and celebrating with the team. Spend another night getting shitfaced with real friends. You get to do nothing at work for a few days, and take some hour-long lunches away from the desk. The relative bliss that is a normal work day makes you start to forget about all the bullshit. You're just so happy to not be at work until 2am, and dare I say, a little proud of yourself for finishing the project? Its actually a great feeling, though its akin to applying an ice-pack to your bruised genitals.
Eventually, everyone gets back to being a zombie, hating their life from 9-6, then doing something to help assuage the misery in the remaining 5 waking hours.
Its not uncommon for people who go though drastic life changes and really traumatic experiences to actually value the experience, even though life was terrible at the time. These experiences wake you up.
Don't forget that you hate your life 8 months a year. Do something you love. Do something where you make a difference, and add value to the world. Challenge yourself. Change your path.
Busy Season ends, and you spend the weekend enjoying copious libations and celebrating with the team. Spend another night getting shitfaced with real friends. You get to do nothing at work for a few days, and take some hour-long lunches away from the desk. The relative bliss that is a normal work day makes you start to forget about all the bullshit. You're just so happy to not be at work until 2am, and dare I say, a little proud of yourself for finishing the project? Its actually a great feeling, though its akin to applying an ice-pack to your bruised genitals.
Eventually, everyone gets back to being a zombie, hating their life from 9-6, then doing something to help assuage the misery in the remaining 5 waking hours.
Its not uncommon for people who go though drastic life changes and really traumatic experiences to actually value the experience, even though life was terrible at the time. These experiences wake you up.
Don't forget that you hate your life 8 months a year. Do something you love. Do something where you make a difference, and add value to the world. Challenge yourself. Change your path.
Friday, April 5, 2013
Money Psycology
Financial services employees get involuntarily imbued with the money culture.
A world which revolves around money changes the way people think, and in turn the way people act and relate to each other. Ultimately this way of thinking and acting is institutionalized in the corporate cultures of financial services firms.
Greed makes people think differently about life, risk, potential jobs, potential spouses, potential friends and potential activities. The purpose of life is not to amass the largest net worth.
Money is a score card, but only for people who play the money game. Those people are usually miserable.
Do what you love and fuck the rest.
http://www.nytimes.com/2006/11/21/health/psychology/21doug.html?_r=0
A world which revolves around money changes the way people think, and in turn the way people act and relate to each other. Ultimately this way of thinking and acting is institutionalized in the corporate cultures of financial services firms.
Greed makes people think differently about life, risk, potential jobs, potential spouses, potential friends and potential activities. The purpose of life is not to amass the largest net worth.
Money is a score card, but only for people who play the money game. Those people are usually miserable.
Do what you love and fuck the rest.
http://www.nytimes.com/2006/11/21/health/psychology/21doug.html?_r=0
Tuesday, April 2, 2013
Sunk Costs
There are no opportunity costs in life, only sunk costs.
The opportunity cost of each moment of your life is infinite. You could win the lottery, you could get hit by a bus. Opportunity cost is not a useful tool for life decisions.
Each moment of your life is a sunk cost. There is no way to recover your time. If you are rational, you ought not to let your past dictate your future. It happened, its over and you can't re-do it. Your past is a collection of sunk costs, and, as Led Zeppelin so aptly put it, "there's still time to change the road you're on."
I see this shit everyday. Kids think they're committed to the accounting career path, even though they don't enjoy it. They can't possible forgo the opportunity to ride out the guaranteed stability of the accounting career path. You'll never succeed if you don't love what you do. Don't be a middle of the pack paper-pusher. Take a chance, do what you love, be successful.
The decision of 19-year-old you, to get a degree in whatever, should not dictate the remaining 60 years of your life. It happened, its a sunk cost. The rational question is, how do you want to spend your days going forward?
The opportunity cost of each moment of your life is infinite. You could win the lottery, you could get hit by a bus. Opportunity cost is not a useful tool for life decisions.
Each moment of your life is a sunk cost. There is no way to recover your time. If you are rational, you ought not to let your past dictate your future. It happened, its over and you can't re-do it. Your past is a collection of sunk costs, and, as Led Zeppelin so aptly put it, "there's still time to change the road you're on."
I see this shit everyday. Kids think they're committed to the accounting career path, even though they don't enjoy it. They can't possible forgo the opportunity to ride out the guaranteed stability of the accounting career path. You'll never succeed if you don't love what you do. Don't be a middle of the pack paper-pusher. Take a chance, do what you love, be successful.
The decision of 19-year-old you, to get a degree in whatever, should not dictate the remaining 60 years of your life. It happened, its a sunk cost. The rational question is, how do you want to spend your days going forward?
Glorified Secretaries
Auditors are 'glorified secretaries'
Really, auditors manage the details of the audit engagement. Auditors are generalists. They know a little bit about a lot of things. Jack of all trades, master of none.
The client has a material position in a complicated structured fixed income product? Lets send it to our experts and see what they think. Oh, they have over-the-counter derivatives?.. Send them off to the experts. The client has complicated and customized IT systems? Call in the IT risk consultants.
Auditors work at such a high level, they really don't learn very much of value.
"Do not lose hold of your dreams or aspirations. For if you do, you may still exist but you have ceased to live."- Henry David Thoreau
Really, auditors manage the details of the audit engagement. Auditors are generalists. They know a little bit about a lot of things. Jack of all trades, master of none.
The client has a material position in a complicated structured fixed income product? Lets send it to our experts and see what they think. Oh, they have over-the-counter derivatives?.. Send them off to the experts. The client has complicated and customized IT systems? Call in the IT risk consultants.
Auditors work at such a high level, they really don't learn very much of value.
"Do not lose hold of your dreams or aspirations. For if you do, you may still exist but you have ceased to live."- Henry David Thoreau
Monday, April 1, 2013
I Hate Auditing
I hate auditing because:
It is intellectually stifling
There is no synthesis of information
There is no payoff for being good at it. Seniority trumps meritocracy in public accounting
It is not difficult or challenging
It adds little, if any, value to clients or society
The nature of the work is repetitive and tedious
It is intellectually stifling
There is no synthesis of information
There is no payoff for being good at it. Seniority trumps meritocracy in public accounting
It is not difficult or challenging
It adds little, if any, value to clients or society
The nature of the work is repetitive and tedious
The logistics of the job are terrible. Staff sit in where they can in conference rooms, seniors 'borrow' whatever desks are available, managers share offices. Ridiculous.
Thursday, March 28, 2013
Quarter Life Crisis
So. Just surfing the web to determine what career I should pursue instead of accounting. I know, clearly, the answer is on some website. But I ran into this Forbes' list of happiest jobs, and discovered, to my horror, that they listed 'Assistant Controller' as the #10 happiest job ever. That was the moment I decided I will never look at another one of these lists again.
http://www.forbes.com/sites/jacquelynsmith/2013/03/22/the-happiest-and-unhappiest-jobs-in-america/
WTF should I do with my life?
http://www.forbes.com/sites/jacquelynsmith/2013/03/22/the-happiest-and-unhappiest-jobs-in-america/
WTF should I do with my life?
Wednesday, March 27, 2013
How do you want to spend your days?
The phrasing of the question really hit home with me; I love it. It distills my feelings about the finite nature of your time on earth. The ease of the diction removes the existential anxiety usually associated with such questions. The confluence of these feelings makes it a perfect way to approach the question.
How do you want to spend your days? No big deal. What would you prefer to do? Don't think about the practicality of your choices, or your future, or your past. Just try to identify what you feel you would want to do with your days. What do you want to do? Who do you want to help? What legacy do you want to leave?
How do you want to spend your days? No big deal. What would you prefer to do? Don't think about the practicality of your choices, or your future, or your past. Just try to identify what you feel you would want to do with your days. What do you want to do? Who do you want to help? What legacy do you want to leave?
How to Get a Job with the Big 4
Ten Easy Steps:
1. Go to a college where the Big 4 firms recruit from
2. Earn a >3.5 GPA in accounting
3. Join the accounting and finance clubs
4. Hold an office with a campus organization
5. Do a day or two of community service
6. Write a decent resume
7. Invest in a nice suit, and professional haircut
8. Land an internship with an accounting firm
9. Smile and make conversation during the interview
10. Don't be a total melvin
Accept offer.
1. Go to a college where the Big 4 firms recruit from
2. Earn a >3.5 GPA in accounting
3. Join the accounting and finance clubs
4. Hold an office with a campus organization
5. Do a day or two of community service
6. Write a decent resume
7. Invest in a nice suit, and professional haircut
8. Land an internship with an accounting firm
9. Smile and make conversation during the interview
10. Don't be a total melvin
Accept offer.
Tuesday, March 26, 2013
Big 4 Sweat Shop
"Stop acting like some 'real world' project manager. You're just a slave driver in an office full of desperate people."
The above is a quote from an actual conversation I had with a friend while at the Big 4, talking about what we wish we had the balls to say to our manager. It made me laugh really hard. Then the reality of the statement sunk in.
“If it was remotely interesting there would be a show on A&E about it.” - Tom, Parks and Recreation
The above is a quote from an actual conversation I had with a friend while at the Big 4, talking about what we wish we had the balls to say to our manager. It made me laugh really hard. Then the reality of the statement sunk in.
“If it was remotely interesting there would be a show on A&E about it.” - Tom, Parks and Recreation
Monday, March 25, 2013
CPA and CFA?
Yep, a I earned a masters in accounting, a CPA, and some Big4 audit experience, and now I'm pursuing the CFA.
Know that pursuing multiple designations looks good, but it also looks bad. It means you messed up and pursued the wrong career at some point, but it also means you are experienced and well rounded. Its neither good nor bad. You are not better than someone who doesn't have a certification, in the same way the person with more certifications is not better than you. They're just tests.
Why?
The risk/reward trade off of an accounting career versus all other jobs in 'finance', the soul crushing-ness of redoing someone else's detail accounting work, the misery of formatting excel spreadsheets with the right color highlights and boarders, working late nights for meaningless deadlines, the drudgery of dedicating your career to zero-value backwards looking work. I'm taking this ridiculous test to escape accounting.
It is hard. Its a big sacrifice of your precious free time and youth, and the pay-off is not guaranteed. However, studying and passing proves you are self motivated, that you can work hard, and are intelligent enough. It provides you a chance to learn very interesting concepts in a structured and verifiable way. Its fun to compete and push yourself. That's why.
CFA Salary Data referring to a CFA institute survey from 2006
http://news.efinancialcareers.com/13632/cfa-compensation-survey-results/
CPA Salary Data referring to a 2010 Robert Half Survey
https://community.thiswaytocpa.com/allgroups/profession/b/articles/archive/2012/12/28/cha-ching-cha-ching.aspx
Know that pursuing multiple designations looks good, but it also looks bad. It means you messed up and pursued the wrong career at some point, but it also means you are experienced and well rounded. Its neither good nor bad. You are not better than someone who doesn't have a certification, in the same way the person with more certifications is not better than you. They're just tests.
Why?
The risk/reward trade off of an accounting career versus all other jobs in 'finance', the soul crushing-ness of redoing someone else's detail accounting work, the misery of formatting excel spreadsheets with the right color highlights and boarders, working late nights for meaningless deadlines, the drudgery of dedicating your career to zero-value backwards looking work. I'm taking this ridiculous test to escape accounting.
It is hard. Its a big sacrifice of your precious free time and youth, and the pay-off is not guaranteed. However, studying and passing proves you are self motivated, that you can work hard, and are intelligent enough. It provides you a chance to learn very interesting concepts in a structured and verifiable way. Its fun to compete and push yourself. That's why.
CFA Salary Data referring to a CFA institute survey from 2006
http://news.efinancialcareers.com/13632/cfa-compensation-survey-results/
CPA Salary Data referring to a 2010 Robert Half Survey
https://community.thiswaytocpa.com/allgroups/profession/b/articles/archive/2012/12/28/cha-ching-cha-ching.aspx
The Courage to Actually Leave
Be your best you every day. Be thankful you are young and healthy, you won't be for long. Everyone will age, everyone will get sick, everyone will die. Don't get too attached to it, but don't squander it either. Don't squander your opportunity to go after the things you want. You only live once, and you only die once, and the healthy and energized part of your life is far too short to play your cards conservatively. You never know when your time will be up. You can get hit by a truck tomorrow, you could be diagnosed with cancer or some other debilitating disease that will sap your energy and effectively end your ambitions and life as you know it.
Your career is not a battle of attrition. Success does not come from 'sticking it out' in a job that doesn't suit you. Don't quit quitting before you even quit!
Your career is not a battle of attrition. Success does not come from 'sticking it out' in a job that doesn't suit you. Don't quit quitting before you even quit!
“Life is short. Why be an accountant? Except for the stability and the benefits and the above-average pay. Oh, God, this better work out.”- Ben, Parks and Recreation
"If you never did you should. These things are fun and fun is good."- Dr Seuss
"If you never did you should. These things are fun and fun is good."- Dr Seuss
Finding Your Purpose
The following is summarized from the psycologytoday article linked below. The ideas really resonate with me, and I'd like to put my feelings in writing and document the important points I took away from the article.
http://www.psychologytoday.com/blog/the-new-resilience/201105/why-its-hard-find-your-life-purpose-in-todays-world
1. Pursue something larger than your ego. Your life's objective should not include superlatives and titles. It should be altruistic. It shouldn't be about optimizing the way your ego feels. Do what you are passionate about and success will follow. Hopefully, if you are working on your passion, your ego wont crave outward success and recognition anyway.
Think about Apple. They created new markets for music, and entertainment, new products from imacs to ipods to itunes to iphones. They weren't focused on winning. They weren't focused on market share and EPS. They were focused on creating the best product, period. That is purpose. Improving the world by focusing on providing the greatest value you can. Of course they are one of the best managed companies in the world and do indeed maximize market share, and practice strategic obsolescence within product lines, and tightly control costs, but their core, their driving focus was the quality of the product.
2. Don't try to find your purpose. Try to 'learn' it. Try to 'feel' it. Study your life story, your successes and failures and try to determine what they say about you and what you like. People are terrible at deciding what will make them happy, and who they are; the self-help industry is supposedly a 2.5b industry per wikipedia. Make a study of you. Be an unbiased expert in you.
"Whatever course you decide upon, there is always someone to tell you that you are wrong. There are always difficulties arising that tempt you to believe that your critics are right. To map out a course of action and follow it to an end requires courage."- Emerson
"...may suddenly think during the night, "I must go to the north," and in the morning, he sets out on his journey. He does not know why, he does not know what he is to accomplish there, he only knows that he must go. By going there, he finds something that he has to do and sees that it was the hand of destiny pushing him towards the accomplishment of that purpose which inspired him to go to the north." -Hazrat Inayat Khan
http://www.theonion.com/articles/find-the-thing-youre-most-passionate-about-then-do,31742/?utm_source=Twitter&utm_medium=SocialMarketing&utm_campaign=standard-post:quote:default
http://www.psychologytoday.com/blog/the-new-resilience/201105/why-its-hard-find-your-life-purpose-in-todays-world
1. Pursue something larger than your ego. Your life's objective should not include superlatives and titles. It should be altruistic. It shouldn't be about optimizing the way your ego feels. Do what you are passionate about and success will follow. Hopefully, if you are working on your passion, your ego wont crave outward success and recognition anyway.
Think about Apple. They created new markets for music, and entertainment, new products from imacs to ipods to itunes to iphones. They weren't focused on winning. They weren't focused on market share and EPS. They were focused on creating the best product, period. That is purpose. Improving the world by focusing on providing the greatest value you can. Of course they are one of the best managed companies in the world and do indeed maximize market share, and practice strategic obsolescence within product lines, and tightly control costs, but their core, their driving focus was the quality of the product.
2. Don't try to find your purpose. Try to 'learn' it. Try to 'feel' it. Study your life story, your successes and failures and try to determine what they say about you and what you like. People are terrible at deciding what will make them happy, and who they are; the self-help industry is supposedly a 2.5b industry per wikipedia. Make a study of you. Be an unbiased expert in you.
"Whatever course you decide upon, there is always someone to tell you that you are wrong. There are always difficulties arising that tempt you to believe that your critics are right. To map out a course of action and follow it to an end requires courage."- Emerson
"...may suddenly think during the night, "I must go to the north," and in the morning, he sets out on his journey. He does not know why, he does not know what he is to accomplish there, he only knows that he must go. By going there, he finds something that he has to do and sees that it was the hand of destiny pushing him towards the accomplishment of that purpose which inspired him to go to the north." -Hazrat Inayat Khan
http://www.theonion.com/articles/find-the-thing-youre-most-passionate-about-then-do,31742/?utm_source=Twitter&utm_medium=SocialMarketing&utm_campaign=standard-post:quote:default
Risk Versus Reward of a Career in Accounting
Accounting is full of highly risk-averse people willing to trade long hours for a structured and stable career track. If you are not willing to make that trade, you ought to find an opportunity with the balance of risk/reward that suits you better. You can find opportunities that offer different trade-offs too; some places even offer a trade off of hours for pay!
Work is all about finding the trade-off that is right for you. I think its normal if your ideal work/life trade-off evolves over time. If having a truly meaningful career in teaching, social work, financial advising, not-for-profit management, healthcare, whatever, will make you happy for the foreseeable future, then go for it. If working ridiculous hours auditing financial statements for relatively little pay makes you happy, then go for it.
The concept is analogous to the efficient frontier in finance. Think of a graph of Risk versus Reward. Accounting is that point on the graph that has less reward (ie. pay/hr) for the same amount of risk as careers like financial operations, compliance, human resources, or any other more interesting back office function. It is a dominated option. A rational actor ought not to choose it. Unfortunately, that is not how life works. College kids desperate for a career path and a prestigious job sign into the accounting major, begin competing for the prestigious jobs, and start justifying their decisions. Five to ten years later, if they have the self awareness or intelligence to seriously question their lives, begin to freak out about the time they've wasted.
It doesn't matter what kind of work/life trade off you choose, as long as you know yourself well enough to choose the one that makes you happy. Know thyself.
http://www.linkedin.com/today/post/article/20130314115932-20017018-the-best-definition-of-success-is-the-one-you-never-use
Work is all about finding the trade-off that is right for you. I think its normal if your ideal work/life trade-off evolves over time. If having a truly meaningful career in teaching, social work, financial advising, not-for-profit management, healthcare, whatever, will make you happy for the foreseeable future, then go for it. If working ridiculous hours auditing financial statements for relatively little pay makes you happy, then go for it.
The concept is analogous to the efficient frontier in finance. Think of a graph of Risk versus Reward. Accounting is that point on the graph that has less reward (ie. pay/hr) for the same amount of risk as careers like financial operations, compliance, human resources, or any other more interesting back office function. It is a dominated option. A rational actor ought not to choose it. Unfortunately, that is not how life works. College kids desperate for a career path and a prestigious job sign into the accounting major, begin competing for the prestigious jobs, and start justifying their decisions. Five to ten years later, if they have the self awareness or intelligence to seriously question their lives, begin to freak out about the time they've wasted.
It doesn't matter what kind of work/life trade off you choose, as long as you know yourself well enough to choose the one that makes you happy. Know thyself.
http://www.linkedin.com/today/post/article/20130314115932-20017018-the-best-definition-of-success-is-the-one-you-never-use
Don’t audit life
Don’t audit life. Show up, participate in life, and make the most of it now.
Don't just sit in the back of the class and listen for no credit. Jump in, work hard and do it.
Don't just review other peoples financial statements and provide opinions on their work. Go out and do something that adds value to someone. Hire your own auditors.
Don't settle for the safety of back office. Don't settle on being a control process.
Don't sell yourself short. You are smart, energetic, and driven. You can do so much better.
Live your life passionately and take a risk. Life is far too short to do something you don't love.
"It's crazy to take little in between jobs just because they look good on your resume. That's like saving sex for your old age. Do what you love and work for whom you admire the most, and you've given yourself the best chance in life you can."- Warren Buffett
Don't just sit in the back of the class and listen for no credit. Jump in, work hard and do it.
Don't just review other peoples financial statements and provide opinions on their work. Go out and do something that adds value to someone. Hire your own auditors.
Don't settle for the safety of back office. Don't settle on being a control process.
Don't sell yourself short. You are smart, energetic, and driven. You can do so much better.
Live your life passionately and take a risk. Life is far too short to do something you don't love.
"It's crazy to take little in between jobs just because they look good on your resume. That's like saving sex for your old age. Do what you love and work for whom you admire the most, and you've given yourself the best chance in life you can."- Warren Buffett
Who am I, and how do I fix that?
There are many different ways to think about you, dozens of different psychological theories. I love theories. I love big picture. I like to understand everything at a high level. If I could be in college for the rest of my life and study whatever I found interesting, I probably would. Unfortunately, they try to make you specialize and spend 5 years getting a Ph.D. and doing research in a specialized field. I don't think I could ever commit my life researching a single topic, let alone a specialized sub-topic. As one of my favorite professors liked to say(shout), "but I digress!"
I have yet to find a solid outline of the different psychological theories, and I want to consolidate my understanding of how to think about my self, so I'm taking an amateurish shot at writing one that covers the points I think are important to help me understand me. So enjoy, future me! And thanks to wikipedia.
Freud-
You are an Id, Ego, and Superego. Your issues are a result of your subconscious drives and conflicts between the three parts of you. In order to understand 'you', you must understand your subconscious. Freud liked to cite the subconscious drive to reproduce as the underlying reason for many issues. Most people don't think that sex is the underlying purpose for everything, as Freud did. He makes a some good cases though, and is humble enough to admit that 'sometimes a cigar is just a cigar.'
Rogers-
You are a unified, singular, person.Your issues are a result of 'incongruence'. People want 'self actualization' and 'positive self regard', often people sacrifice one of these for the other, leading to incongruence. For example, a young student thinks that the most important goal in life is starting a career. This young student is trading the pursuit of 'self-actualization' and process of finding himself by taking liberal arts classes and freely spending time on individual interests, for the 'positive self regard' that comes from getting a job in Manhattan with an international auditing and consulting firm. These incongruencies manifest as defense mechanisms such as 'distortion' and 'denial', which are used to protect the 'self concept'. For example, that student with the positive self regard as a result of his pursuit of the career has distortion issues where he thinks his public accounting career path to be the absolute best and the only way to success in accounting.
Adler-
All people strive to belong and feel significant. A lot of your personality is influenced by the social context of your life such as birth order, lifestyle, parent's education level, etc. The primary 'inferiority complex' born out of your years as a helpless child. The secondary 'inferiority complex' results from your inability to live up to your 'idealized self'. The degree to which your perceived self varies from your idealized self is the degree to which you have some psychological issues.
I have yet to find a solid outline of the different psychological theories, and I want to consolidate my understanding of how to think about my self, so I'm taking an amateurish shot at writing one that covers the points I think are important to help me understand me. So enjoy, future me! And thanks to wikipedia.
Freud-
You are an Id, Ego, and Superego. Your issues are a result of your subconscious drives and conflicts between the three parts of you. In order to understand 'you', you must understand your subconscious. Freud liked to cite the subconscious drive to reproduce as the underlying reason for many issues. Most people don't think that sex is the underlying purpose for everything, as Freud did. He makes a some good cases though, and is humble enough to admit that 'sometimes a cigar is just a cigar.'
Rogers-
You are a unified, singular, person.Your issues are a result of 'incongruence'. People want 'self actualization' and 'positive self regard', often people sacrifice one of these for the other, leading to incongruence. For example, a young student thinks that the most important goal in life is starting a career. This young student is trading the pursuit of 'self-actualization' and process of finding himself by taking liberal arts classes and freely spending time on individual interests, for the 'positive self regard' that comes from getting a job in Manhattan with an international auditing and consulting firm. These incongruencies manifest as defense mechanisms such as 'distortion' and 'denial', which are used to protect the 'self concept'. For example, that student with the positive self regard as a result of his pursuit of the career has distortion issues where he thinks his public accounting career path to be the absolute best and the only way to success in accounting.
Adler-
All people strive to belong and feel significant. A lot of your personality is influenced by the social context of your life such as birth order, lifestyle, parent's education level, etc. The primary 'inferiority complex' born out of your years as a helpless child. The secondary 'inferiority complex' results from your inability to live up to your 'idealized self'. The degree to which your perceived self varies from your idealized self is the degree to which you have some psychological issues.
Thursday, March 14, 2013
Auditing is Mostly Meaningless
Our goal is to provide an 'opinion' that we are 'reasonably assured' that there are no 'material' misstatements in the financial statements as of 3 months ago. Doesn't that just fill you with pride and meaning?
'Real' businesses need capital to produce their goods, and in order to get the capital, investors need to make investment decisions based on accurate information. In order to get the information, the businesses need accounting systems. In order to reasonably assure materially accurate accounting information, you usually need auditors...Whenever your job is the 3rd derivative of the actual value-added process, you know its a shit job.
http://howshouldweaccountforme.tumblr.com/post/45131530688/when-anyone-asks-you-if-youre-satisfied-with-your-job
http://howshouldweaccountforme.tumblr.com/post/45131530688/when-anyone-asks-you-if-youre-satisfied-with-your-job
Finance Interview Brain Teasers
I have been interviewing for a few months now. Its tough to break out of accounting. Its miserable. It feels like I'm leading a double-life or cheating on my team. Anyway, I have been getting progressively better at interviewing and answering the ridiculous questions they throw at you.
The questions don't seem very hard at all when you are chilling at your computer with a cup of coffee. When they ask one of these as the last question of an intensive 2 hour interview and say "we have just one more question for you.." things can get a little stressful.
The Questions
1. What is 1644 divided by 8?
2. What is the angle of the hour and minute hand at 11:45?
2a. What is the angle of the hour and minute hand at 8:53?
3. How many cigars are sold in New York City each year?
3a. How much cigarette tax does New York City collect each year?
4. How many planes leave from LaGuardia each day?
5. A 12 by 12 by 12 cube is made up of smaller cubes of 1 unit each, similar to a large rubik's cube. The cube is dipped in paint, such that the outside surfaces are painted red. How many cubes have paint on them?
6. Walk me through a discounted cash flow model you built.
-How do you calculate free cash flow to the firm?
-How did you project these cash flows into the future?
-How do calculated weighted average cost of capital?
-How do you calculate terminal value?
-How do you calculate cost of equity?
7. How long is the Ganges River?
8. Assume the Brooklyn Bridge is the only river crossing in New York City, and the only two boroughs are Manhattan and Brooklyn. In an average 24 hour day, how many cars cross the bridge?
9. How many times does a number with a '3' in it occur between 0 and 500? For example, 3 counts as one instance, and 13 would count as the second instance.
What date (in MMDD:YYYY form) is closest to Jan 1, 2000 and is also a palindrome?
October 2 2001 (10 02 2001)
Why?!
After failing so hard on one of these questions that I literally heard the 'ding' of dismissal, I was pissed. I actually asked the interviewer why is this a good interview question?.. "We like to get a feel for how well candidates can think critically under pressure. Let me walk you out."
The Answers
1.Think 16 divided by 8 is 2. So 1600 divided by 8 is 200. 44 divided by 8 is 5.5. The answer is 205.5.
2. Its 90 degrees!.. Not really. I know a circle is 360 degrees. There are 12 sections of clock, so there are 30 degrees in each section. At 11:45 the hour hand is 75% of the way between the 11 and the 12, meaning there is 25% of the way to go. 50% of 30 is 15. So 25% of 30 is half of that, 7.5. I know that the angle between the minute hand at the 9 and the 12 is 90 degrees. 90 degrees minus the 7.5 is 82.5 degrees.
4. Use the same reasoning as #2. Make some reasonable assumptions and do some mental math correctly.
5. If the outside layer is covered with paint, that means there is an inside cube that is not. A 12 cube minus 2 sides on each axis gives you an inner 10 cube. So the answer is the volume of the 12 cube minus the volume of the 10 cube. 12 times 12 is 144, times 12 is 1728. 10 times 10 times 10 is 1000. The answer is 728 blocks have paint on them.
6. If you never built a valuation model you should try it before applying to jobs that require you to.
7. I know from road tripping from New York to Florida that the length of the United States is approximately 2000 miles. I know the Mississippi river spans pretty much the length of the United States, from the mid-west, to Louisiana I would guess that the Ganges is similar, but probably smaller. I'd guess 10% smaller. I guessed 1800. Its actually 1569, per wikipedia.
8. Use the same reasoning as #2. Make some reasonable assumptions and do some mental math correctly. Often they will have Googled the correct answer ahead of time to see how close you actually get. Surprisingly, making some reasonable assumptions and doing the mental math correctly usually gets you close enough to impress the interviewer.
9. This one was interesting.
3 occurs in the units place once every ten numbers. 500 by 10 is 50.
3 occurs in the tens place ten times, every hundred numbers. 500/100*10 is 50
3 occurs in the hundreds place only 100 times between numbers 300 to 400. 100
The total number of instances of '3' in the set of 0 to 500 is 200 instances.
The Real Answer:
These questions are really tests of confidence and maturity. Really what they are asking is, do you know how to play the game? Are you mature and self assured enough to not freak out, and realize that they don't* expect you to actually get the right answer, but want to see you act with poise under pressure. They expect you to maintain enough composure to walk through the problem logically, and do some mental math quickly.
*They do expect you to get the math questions right (questions #1,2,5), especially if you have CPA/CFA/MBA next to your name.
The questions don't seem very hard at all when you are chilling at your computer with a cup of coffee. When they ask one of these as the last question of an intensive 2 hour interview and say "we have just one more question for you.." things can get a little stressful.
The Questions
1. What is 1644 divided by 8?
2. What is the angle of the hour and minute hand at 11:45?
2a. What is the angle of the hour and minute hand at 8:53?
3. How many cigars are sold in New York City each year?
3a. How much cigarette tax does New York City collect each year?
4. How many planes leave from LaGuardia each day?
5. A 12 by 12 by 12 cube is made up of smaller cubes of 1 unit each, similar to a large rubik's cube. The cube is dipped in paint, such that the outside surfaces are painted red. How many cubes have paint on them?
6. Walk me through a discounted cash flow model you built.
-How do you calculate free cash flow to the firm?
-How did you project these cash flows into the future?
-How do calculated weighted average cost of capital?
-How do you calculate terminal value?
-How do you calculate cost of equity?
7. How long is the Ganges River?
8. Assume the Brooklyn Bridge is the only river crossing in New York City, and the only two boroughs are Manhattan and Brooklyn. In an average 24 hour day, how many cars cross the bridge?
9. How many times does a number with a '3' in it occur between 0 and 500? For example, 3 counts as one instance, and 13 would count as the second instance.
What date (in MMDD:YYYY form) is closest to Jan 1, 2000 and is also a palindrome?
October 2 2001 (10 02 2001)
Why?!
After failing so hard on one of these questions that I literally heard the 'ding' of dismissal, I was pissed. I actually asked the interviewer why is this a good interview question?.. "We like to get a feel for how well candidates can think critically under pressure. Let me walk you out."
The Answers
1.Think 16 divided by 8 is 2. So 1600 divided by 8 is 200. 44 divided by 8 is 5.5. The answer is 205.5.
2. Its 90 degrees!.. Not really. I know a circle is 360 degrees. There are 12 sections of clock, so there are 30 degrees in each section. At 11:45 the hour hand is 75% of the way between the 11 and the 12, meaning there is 25% of the way to go. 50% of 30 is 15. So 25% of 30 is half of that, 7.5. I know that the angle between the minute hand at the 9 and the 12 is 90 degrees. 90 degrees minus the 7.5 is 82.5 degrees.
3. I know that around 20 million people live in New York. I'm going assume that only men smoke cigars and half of the population is men, which leaves us 10 million men. Assume that half of all men smoke at least one cigar a year, 50%. Assume that men who do smoke cigars buy an average of 5 a year. 25 million cigars.
4. Use the same reasoning as #2. Make some reasonable assumptions and do some mental math correctly.
5. If the outside layer is covered with paint, that means there is an inside cube that is not. A 12 cube minus 2 sides on each axis gives you an inner 10 cube. So the answer is the volume of the 12 cube minus the volume of the 10 cube. 12 times 12 is 144, times 12 is 1728. 10 times 10 times 10 is 1000. The answer is 728 blocks have paint on them.
6. If you never built a valuation model you should try it before applying to jobs that require you to.
7. I know from road tripping from New York to Florida that the length of the United States is approximately 2000 miles. I know the Mississippi river spans pretty much the length of the United States, from the mid-west, to Louisiana I would guess that the Ganges is similar, but probably smaller. I'd guess 10% smaller. I guessed 1800. Its actually 1569, per wikipedia.
8. Use the same reasoning as #2. Make some reasonable assumptions and do some mental math correctly. Often they will have Googled the correct answer ahead of time to see how close you actually get. Surprisingly, making some reasonable assumptions and doing the mental math correctly usually gets you close enough to impress the interviewer.
9. This one was interesting.
3 occurs in the units place once every ten numbers. 500 by 10 is 50.
3 occurs in the tens place ten times, every hundred numbers. 500/100*10 is 50
3 occurs in the hundreds place only 100 times between numbers 300 to 400. 100
The total number of instances of '3' in the set of 0 to 500 is 200 instances.
The Real Answer:
These questions are really tests of confidence and maturity. Really what they are asking is, do you know how to play the game? Are you mature and self assured enough to not freak out, and realize that they don't* expect you to actually get the right answer, but want to see you act with poise under pressure. They expect you to maintain enough composure to walk through the problem logically, and do some mental math quickly.
*They do expect you to get the math questions right (questions #1,2,5), especially if you have CPA/CFA/MBA next to your name.
Monday, March 11, 2013
Auditors Live in Conference Rooms
Today I am sitting in a conference room at one table with nine other people.
I will sit in this conference room for over 14 hours today, and each day, including weekends, for the next two weeks. I have already been working like this for 3 months.
I will eat every meal of the day here, over my computer.
I will answer staff questions, prioritize manager ad-hoc requests and fix 'review comments' continuously until the audit ends. The only time 'review comments' end is when the financial statements are issued. Managers and Partners will continue to change their mind and demand tweaks to workpapers until the last minute, and often times after that too.
I will do ridiculously tedious work all day long, and not learn a thing, for 14 hours.
The current purpose of my life is to match numbers together to provide 'reasonable assurance' that the financial statements we are auditing are free of 'material misstatements'. What a life.
At least we have windows and work in midtown. Some other teams work worse hours in a basement rooms with no windows, in places like Jersey City, White Plains, or Stamford.
The Lehman Ex-CFO has an interesting take on working these hours and maintaining this kind of work/life 'balance'. She says don't.
http://www.nytimes.com/2013/03/10/opinion/sunday/is-there-life-after-work.html?_r=3&
I will sit in this conference room for over 14 hours today, and each day, including weekends, for the next two weeks. I have already been working like this for 3 months.
I will eat every meal of the day here, over my computer.
I will answer staff questions, prioritize manager ad-hoc requests and fix 'review comments' continuously until the audit ends. The only time 'review comments' end is when the financial statements are issued. Managers and Partners will continue to change their mind and demand tweaks to workpapers until the last minute, and often times after that too.
I will do ridiculously tedious work all day long, and not learn a thing, for 14 hours.
The current purpose of my life is to match numbers together to provide 'reasonable assurance' that the financial statements we are auditing are free of 'material misstatements'. What a life.
At least we have windows and work in midtown. Some other teams work worse hours in a basement rooms with no windows, in places like Jersey City, White Plains, or Stamford.
The Lehman Ex-CFO has an interesting take on working these hours and maintaining this kind of work/life 'balance'. She says don't.
http://www.nytimes.com/2013/03/10/opinion/sunday/is-there-life-after-work.html?_r=3&
Sunday, March 10, 2013
Don't Be a Cost Center
If there's one thing I learned from auditing, its that the back office gets paid far, far less than the revenue generators. The closer you are to the revenue, the more you get paid.
The Big4 like to tell you that you are 'client facing' and 'front office' employees. Its bullshit. The fees that clients are charged are fixed. It doesn't matter how many hours you put on your time-sheet, the firm will make the same amount of revenue. In fact, the more hours you enter in your time-sheet the more 'internal cost' the job incurs. Illogically, the more you 'bill' the client, the less 'profit' the job makes. Your salary is a cost that ought to be minimized by the firm.
Much better to align your interests with your firm's, and derive your income as a percentage of the revenue you generate, which is how partners/management of most firms are compensated. Get on the revenue side of the income statement.
The Big4 like to tell you that you are 'client facing' and 'front office' employees. Its bullshit. The fees that clients are charged are fixed. It doesn't matter how many hours you put on your time-sheet, the firm will make the same amount of revenue. In fact, the more hours you enter in your time-sheet the more 'internal cost' the job incurs. Illogically, the more you 'bill' the client, the less 'profit' the job makes. Your salary is a cost that ought to be minimized by the firm.
Much better to align your interests with your firm's, and derive your income as a percentage of the revenue you generate, which is how partners/management of most firms are compensated. Get on the revenue side of the income statement.
Passion and Your Authentic Self
What should I do with my life?
"Do what you love and fuck the rest."
Who am I?
Its scary that I don't know myself. Its more scary that 'self'' might actually be a collection of selves, as suggested by the Yale psychology professor's article, link below. No wonder it's so hard to determine what 'I' like. I don't know who I am. The academics just make it even harder.
Diving into psychology as an amateur looking for answers is terrifying. There are competing theories and everything seems really messy. It doesn't seem like there any right answers, and unfortunately the wikipedia page for 'who am I' directs you to some Vonnegut play. It could be that I am composed of an id, ego and super ego and their interactions are making me neurotic. It could be I am the result of some combination of nature and nurture, where my past experiences have imprinted my personality in such a way that I am who I am today. The academic study is fascinating, but not entirely practical. We can't all go out and get a Psy.D. in order to figure out what we should do with our lives.
I'm just going to leave this question alone for now. If the professionals cant figure it out, I don't think this blog post will.
What do I love?
"When making a decision of minor importance, I have always found it advantageous to consider all the pros and cons. In vital matters, however, such as the choice of a mate or a profession, the decision should come from the unconscious, from somewhere within ourselves. In the important decisions of personal life, we should be governed, I think, by the deep inner needs of our nature."- Sigmund Freud
So, according to Freud, the goal is to determine the 'deep inner needs of my nature', and see where that leads me. There is no intellectual way to determine these. There is no cost benefit analysis to perform. Its a matter of developing skill in feeling that inner voice. It will never be easy to determine, and you will never be confident you are correct. There is no right answer.
You just need to be honest. You need to know your own issues and decide which parts of your feelings are just neurosis or other psychological glitches, and which are the true feelings. Its interesting, to a certain extent your neurosis are you. You are born an individual, but the experiences and lessons you learn leave you with your habits and imprint on your personality. Do you ignore all those things? How do you differentiate your neurosis you want to change and your inner nature?
This messiness is hard for someone trained in the 'science' of accounting to accept. There should be a way to model this problem in a spreadsheet. I should be able to just model the equation and constraints in excel, and run the solver add-in to maximize the formula.
What if the 'what do I love' and 'who am I' questions are one in the same?
I still don't know me, but that's okay. Knowing thyself is not a weekend 'do-it-yourself' project. I don't think its something that can really ever be accomplished. 'Yourself' is a moving target, and I doubt anyone ever actually landed on it. Your feelings and ambitions are always evolving. What you can accomplish, however, is developing great skill in feeling those 'deep inner needs of your nature'. You can get good at knowing those deep feelings and identifying them as from your inner nature rather than from fleeting emotions. The better you understand your mind and your issues, the easier it is to identify the false feelings. The better you are at knowing which feelings relate to the true self, the nicer you can be to your true you. I think that's a skill worth developing, and goal worth striving for. Know thyself, the unexamined life is not worth living.
Practice
Be nice to you. Set time aside to take care of yourself. Ask yourself what you want to do each day. Seriously ask and try to allow your true self to answer. What would you really enjoy for lunch today? Its such as silly question, but I think everyone finds it difficult to decide sometimes. Just let go of everything, and try to figure out what 'you' really want for lunch. Once you can handle letting yourself feel what you really want for lunch, you can move on to something bigger. 'How do I really want to spend my time today?' 'What career do I think would fulfill me?' 'What is my purpose?' Just take one step at a time.
Try to take five minutes each morning for a month and meditate. Just sit still in your chair at home, and focus on your breath, count your breaths from one to ten. Notice how much your mind wanders and how little control you really have. Notice when you lose count, and simply return to counting from one again. Five minutes in the morning will allow you to start you day conscious of your mind, a little less stressed, and hopefully a little better at focusing on what you choose to.
http://www.theatlantic.com/magazine/archive/2008/11/first-person-plural/307055/1/
"Do what you love and fuck the rest."
Who am I?
Its scary that I don't know myself. Its more scary that 'self'' might actually be a collection of selves, as suggested by the Yale psychology professor's article, link below. No wonder it's so hard to determine what 'I' like. I don't know who I am. The academics just make it even harder.
Diving into psychology as an amateur looking for answers is terrifying. There are competing theories and everything seems really messy. It doesn't seem like there any right answers, and unfortunately the wikipedia page for 'who am I' directs you to some Vonnegut play. It could be that I am composed of an id, ego and super ego and their interactions are making me neurotic. It could be I am the result of some combination of nature and nurture, where my past experiences have imprinted my personality in such a way that I am who I am today. The academic study is fascinating, but not entirely practical. We can't all go out and get a Psy.D. in order to figure out what we should do with our lives.
I'm just going to leave this question alone for now. If the professionals cant figure it out, I don't think this blog post will.
What do I love?
"When making a decision of minor importance, I have always found it advantageous to consider all the pros and cons. In vital matters, however, such as the choice of a mate or a profession, the decision should come from the unconscious, from somewhere within ourselves. In the important decisions of personal life, we should be governed, I think, by the deep inner needs of our nature."- Sigmund Freud
So, according to Freud, the goal is to determine the 'deep inner needs of my nature', and see where that leads me. There is no intellectual way to determine these. There is no cost benefit analysis to perform. Its a matter of developing skill in feeling that inner voice. It will never be easy to determine, and you will never be confident you are correct. There is no right answer.
You just need to be honest. You need to know your own issues and decide which parts of your feelings are just neurosis or other psychological glitches, and which are the true feelings. Its interesting, to a certain extent your neurosis are you. You are born an individual, but the experiences and lessons you learn leave you with your habits and imprint on your personality. Do you ignore all those things? How do you differentiate your neurosis you want to change and your inner nature?
This messiness is hard for someone trained in the 'science' of accounting to accept. There should be a way to model this problem in a spreadsheet. I should be able to just model the equation and constraints in excel, and run the solver add-in to maximize the formula.
What if the 'what do I love' and 'who am I' questions are one in the same?
I still don't know me, but that's okay. Knowing thyself is not a weekend 'do-it-yourself' project. I don't think its something that can really ever be accomplished. 'Yourself' is a moving target, and I doubt anyone ever actually landed on it. Your feelings and ambitions are always evolving. What you can accomplish, however, is developing great skill in feeling those 'deep inner needs of your nature'. You can get good at knowing those deep feelings and identifying them as from your inner nature rather than from fleeting emotions. The better you understand your mind and your issues, the easier it is to identify the false feelings. The better you are at knowing which feelings relate to the true self, the nicer you can be to your true you. I think that's a skill worth developing, and goal worth striving for. Know thyself, the unexamined life is not worth living.
Practice
Be nice to you. Set time aside to take care of yourself. Ask yourself what you want to do each day. Seriously ask and try to allow your true self to answer. What would you really enjoy for lunch today? Its such as silly question, but I think everyone finds it difficult to decide sometimes. Just let go of everything, and try to figure out what 'you' really want for lunch. Once you can handle letting yourself feel what you really want for lunch, you can move on to something bigger. 'How do I really want to spend my time today?' 'What career do I think would fulfill me?' 'What is my purpose?' Just take one step at a time.
Try to take five minutes each morning for a month and meditate. Just sit still in your chair at home, and focus on your breath, count your breaths from one to ten. Notice how much your mind wanders and how little control you really have. Notice when you lose count, and simply return to counting from one again. Five minutes in the morning will allow you to start you day conscious of your mind, a little less stressed, and hopefully a little better at focusing on what you choose to.
http://www.theatlantic.com/magazine/archive/2008/11/first-person-plural/307055/1/
Stretch your Comfort Zone
You need to learn to 'lean into the vulnerability of life'. Be you, even when you don't think you should or could possibly let the world see. Push yourself to that uncomfortable place. That uncomfortable feeling means you are growing. I've heard this idea a million different ways from a million different sources from a TED talk on psychology, to a hedge fund-er's managerial magnum opus, to strength training manuals. They must be onto something, and I think its the same thing.
Ray Dalio's Principles mentions 'safe' , 'stretch' , and 'panic' zones. We all know exactly what he means. When we are overloaded, we shut down, get overwhelmed and make little progress. When we aren't challenged we are cruising, and atrophying. When we are working hard while keeping our head above water, we are growing, and this is the right amount of pressure.
Not too much, but not too little. You need to use just just the right amount, with some persistence and practice, to get the results you want. Life's a great balancing act.
Whether its managing your strength training schedule, your emotions, your motivations at work, your finances, your love life, or anything in your life, you need to remember that life and nature work in cycles. The same way you need to recover from a hard workout, you need to recover from working in your 'stretch zone', or pushing through a depressing time personally. Sustainability and caring for oneself is the name of the game.
"You'll get mixed up, of course, as you already know.
You'll get mixed up with many strange birds as you go.
So be sure when you step. Step with care and great tact
and remember that Life's a Great Balancing Act.”
-Dr. Seuss
Ray Dalio's Principles mentions 'safe' , 'stretch' , and 'panic' zones. We all know exactly what he means. When we are overloaded, we shut down, get overwhelmed and make little progress. When we aren't challenged we are cruising, and atrophying. When we are working hard while keeping our head above water, we are growing, and this is the right amount of pressure.
Not too much, but not too little. You need to use just just the right amount, with some persistence and practice, to get the results you want. Life's a great balancing act.
Whether its managing your strength training schedule, your emotions, your motivations at work, your finances, your love life, or anything in your life, you need to remember that life and nature work in cycles. The same way you need to recover from a hard workout, you need to recover from working in your 'stretch zone', or pushing through a depressing time personally. Sustainability and caring for oneself is the name of the game.
"You'll get mixed up, of course, as you already know.
You'll get mixed up with many strange birds as you go.
So be sure when you step. Step with care and great tact
and remember that Life's a Great Balancing Act.”
-Dr. Seuss
Wednesday, March 6, 2013
Why Its So Hard to Escape Public Accounting
"You're going to miss life. You've got to jump off the cliff all the time and build your wings on the way down."
The accounting industry, and the 'Big 4' accounting firms in particular, have perfected the art of psychologically manipulating their new employees into staying in a job most of them really don't enjoy. They are even able to instill a sort of Stockholm syndrome where the employees actually think its a great job and begin to look down on the people who leave. Its difficult to realize it when you are the one subject to the manipulative pressures. Its pledging. Its boot camp. The funny thing about it is that it works really well; most organizations use some aspects of it to build teams. It just seems that the people attracted to accounting firms are more susceptible to these pressures and tactics than the average Joe.
Authority- Your professors, your parents, partners, alumni all tell you that big 4 public accounting is the way to go. They would know, that's where they started, and so should you.
Secrecy- Nobody talks about the hazing that goes on, no one really recognizes it as hazing. Even if they do, certainly no one will warn you beforehand, they're already trying to justify their effort.
Foot in Door/Social Proof- You joined in a class of 50 or more people so clearly you have the social proof from your peers that taking the job is a great idea! Further, you saw how many people were at the super-day, and at least a quarter of them didn't get hired. You made it into the exclusive club, aren't you special!
Slippery Slope- You don't just start blasting out work-papers until 3am, that comes later. You start out in training, with a nice teacher and they hand you a brand new computer, some business cards, and explain how to use your corporate expense account.
Isolation- Busy season. You don't see your friends, you are lucky to see your your roommates. All you know is that dirty conference room and your engagement team. Auditing is now your entire world. You had better come up with a way to twist your psyche into enjoying it for the next four months. No one else out there can help you; they're all in their own little conference rooms preparing work-papers too, right?
Cohesiveness- You get close with your training class, your engagement team, your peers as you commiserate. No one else knows what its like. Its us versus them, and if your not one of us, your one of them. Don't leave the fold or we will think less of you, a lot less; you were around to join us in shitting on those who left.
Cognitive Dissonance/Justification of Effort- You just sunk two years of your life into this job to get that first promotion, so you can leave with some sense of dignity. You feel you have to stay put in order to prove to the world that you could hack it and didn't 'drop-out'. You'd think accountants would understand that sunk costs shouldn't factor into decision making, but the psychological need for consistency outweighs the intellectual firepower most accountants have left.
The End Game-
You need to get past it and understand the cultural pressures and the psychological tricks for what they are. The experience is designed to turn you into an audit machine. They want you to crank out work-papers as fast as humanly possible while paying just enough attention to quality and detail to make sure everything passes review.
Once you buy in for a few years, its hard to think outside the box and understand your experience for what it really is. You're an auditor, and you badly want to justify your work and your life decisions to this point. You convince yourself you are on a great career track, you look down on those who leave, and beat yourself up thinking about what everyone will say about you when you leave too.
The big 4 experience transforms you into an accountant with some valuable skills and experience, but nevertheless, you're a back office cost, and you had to pay a steep price in terms of youth and well being for the opportunity.
“If we listened to our intellect we'd never have a love affair. We'd never have a friendship. We'd never go in business because we'd be cynical: 'It's gonna go wrong.' Or 'She's going to hurt me.' Or,'I've had a couple of bad love affairs, so therefore . . .' Well, that's nonsense. You're going to miss life. You've got to jump off the cliff all the time and build your wings on the way down.” - Ray Bradbury
http://psych-your-mind.blogspot.com/2012/02/hazing-pest-that-just-wont-go-away.html
The accounting industry, and the 'Big 4' accounting firms in particular, have perfected the art of psychologically manipulating their new employees into staying in a job most of them really don't enjoy. They are even able to instill a sort of Stockholm syndrome where the employees actually think its a great job and begin to look down on the people who leave. Its difficult to realize it when you are the one subject to the manipulative pressures. Its pledging. Its boot camp. The funny thing about it is that it works really well; most organizations use some aspects of it to build teams. It just seems that the people attracted to accounting firms are more susceptible to these pressures and tactics than the average Joe.
Authority- Your professors, your parents, partners, alumni all tell you that big 4 public accounting is the way to go. They would know, that's where they started, and so should you.
Secrecy- Nobody talks about the hazing that goes on, no one really recognizes it as hazing. Even if they do, certainly no one will warn you beforehand, they're already trying to justify their effort.
Foot in Door/Social Proof- You joined in a class of 50 or more people so clearly you have the social proof from your peers that taking the job is a great idea! Further, you saw how many people were at the super-day, and at least a quarter of them didn't get hired. You made it into the exclusive club, aren't you special!
Slippery Slope- You don't just start blasting out work-papers until 3am, that comes later. You start out in training, with a nice teacher and they hand you a brand new computer, some business cards, and explain how to use your corporate expense account.
Isolation- Busy season. You don't see your friends, you are lucky to see your your roommates. All you know is that dirty conference room and your engagement team. Auditing is now your entire world. You had better come up with a way to twist your psyche into enjoying it for the next four months. No one else out there can help you; they're all in their own little conference rooms preparing work-papers too, right?
Cohesiveness- You get close with your training class, your engagement team, your peers as you commiserate. No one else knows what its like. Its us versus them, and if your not one of us, your one of them. Don't leave the fold or we will think less of you, a lot less; you were around to join us in shitting on those who left.
Cognitive Dissonance/Justification of Effort- You just sunk two years of your life into this job to get that first promotion, so you can leave with some sense of dignity. You feel you have to stay put in order to prove to the world that you could hack it and didn't 'drop-out'. You'd think accountants would understand that sunk costs shouldn't factor into decision making, but the psychological need for consistency outweighs the intellectual firepower most accountants have left.
The End Game-
You need to get past it and understand the cultural pressures and the psychological tricks for what they are. The experience is designed to turn you into an audit machine. They want you to crank out work-papers as fast as humanly possible while paying just enough attention to quality and detail to make sure everything passes review.
Once you buy in for a few years, its hard to think outside the box and understand your experience for what it really is. You're an auditor, and you badly want to justify your work and your life decisions to this point. You convince yourself you are on a great career track, you look down on those who leave, and beat yourself up thinking about what everyone will say about you when you leave too.
The big 4 experience transforms you into an accountant with some valuable skills and experience, but nevertheless, you're a back office cost, and you had to pay a steep price in terms of youth and well being for the opportunity.
“If we listened to our intellect we'd never have a love affair. We'd never have a friendship. We'd never go in business because we'd be cynical: 'It's gonna go wrong.' Or 'She's going to hurt me.' Or,'I've had a couple of bad love affairs, so therefore . . .' Well, that's nonsense. You're going to miss life. You've got to jump off the cliff all the time and build your wings on the way down.” - Ray Bradbury
http://psych-your-mind.blogspot.com/2012/02/hazing-pest-that-just-wont-go-away.html
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