Industry insights - Accountancy and business services

Overview

The industry in a nutshell

The accountancy and business services industry covers many areas including audit and advisory, business consulting, insurance, financial and management accounting, and taxation.

Following the recession of 2008/09 some accountants have assumed new roles as finance specialists, risk managers, auditors and advisers. As such graduates entering this industry should be excellent communicators, teamworkers, self-disciplined and motivated to succeed in the industry.

The sector has seen an optimistic increase in graduate vacancies in 2010 in comparison with 2009 (High Fliers, 2010).

What kind of work can I do?

Public practice

The majority of chartered accountants work in public practice, also known as professional services. These accountancy firms offer clients services from audit to management consultancy. Some of the main career opportunities within public practice are:

• Assurance and audit - inspecting accounting records and procedures of a business, and verifying the accuracy and completeness of the records.
• Business recovery and insolvency - helping businesses recover from and overcome financial difficulties.
• Corporate finance - working with mergers and acquisitions of organisations, fund-raising and public/private partnerships.
• Taxation - including tax compliance and tax advisory and planning.

Internal providers

This includes public sector companies as well as industry and commerce. Multinationals, charities, NHS Trusts, local authorities, educational institutions, banks, insurance companies and manufacturers have internal accountants. They provide some or all of the following services:

• Internal audit - producing audit reports and recommendations. 
• Financial accounting - keeping track of all financial transactions and preparing accounts.
• Management accounting - providing management with information needed to make decisions as well as financial support to business divisions. ent reports, etc.

What’s it like working in this sector?

• Working in this sector is considered to be hard work with long hours, but at the same time challenging and highly rewarding.
• Graduates entering the profession must be prepared to devote a great deal of time and self-discipline to study for the various professional examinations required through the early years of their career.
• Salaries vary considerably depending on location, size of company and specialisation. The national average starting salaries range from £26,000 - £29,000 (salary data from UK Graduate Careers Survey, High Fliers Research, 2010).
• Graduate employers recognise the importance of diversity in the performance of their teams and implement various diversity initiatives during the recruitment process.

How big is this sector?

• According to the Professional Oversight Board (POB) there are over  290,000 members (qualified accountants) of the six chartered accountancy bodies in the UK and the Republic of Ireland and over 400,000 members worldwide (POB, 2010).
• Over 168,000 students in the UK and Republic of Ireland are currently working towards achieving an accountancy qualification (Key Facts and Trends in the Accountancy Profession, Financial Reporting Council (FCR), 2010).
• The finance and business services industry employs almost 5% of the UK workforce (Labour Force Survey, Office for National Statistics 2010).
• The UK accountancy market is dominated by four global accountancy firms - Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers LLP (the 'Big Four'), which audit almost all of the top 100 public limited companies (PLCs) and most of the top 350 PLCs.

Where can I work?

• Given that London is a global financial centre, the majority of jobs are located in London and the South East, but roles may be found throughout the UK.
• Some of the accounting qualifications (e.g. ACCA (Association of Chartered Certified Accountants)  are recognised in over 170 countries. It is possible to train and work anywhere in the world.
• Multinational companies and international employers have offices worldwide.

Job roles

The following profiles are examples of key jobs that exist in the accountancy and business services industry. To find the job roles that best match your skills and interests, login to what jobs would suit me?

• Accounting technician
• Chartered accountant
• Chartered certified accountant
• Chartered management accountant
• Chartered public finance accountant
• Financial manager
• Tax adviser

For even more career ideas, take a look at types of jobs.

Entry and progression

How do I find a job?

Many employers in the accountancy and business services industry attend careers fairs and give presentations on campus throughout the autumn term. It is advisable to prepare well before you attend such events. Jobs related to this industry can also be found by searching company websites, careers service vacancy boards and through networking.

Graduate training schemes are common in this sector and applications are often made through online forms. Some jobs also require the completion of a psychometric test which can usually be taken online. 

If you are successful, you may be invited to an assessment centre and possibly a second round of interviews. Smaller firms often use just a CV and covering letter.

Big accountancy firms start recruiting at the beginning of the academic year (from September) but many vacancies are open year-round on a rolling recruitment basis.

Tax and audit are the areas with the biggest intake of graduates.

What skills do I need?

Recruiters in this sector look for a combination of strengths, values and skills (refer to the section on work experience to find out how to develop these skills) detailed as follows:

• ability to work within a team and to convey information;
• a genuine interest in the sector;
• an analytical, logical approach to work;
• business and commercial awareness;
• drive and motivation;
• excellent communication, numeracy and problem solving skills;
• self-discipline and self-management, especially if you are studying towards a qualification.

In addition, applicants usually need a good academic record including high UCAS points and a 2:1 degree or above. Once you meet the entry requirements, evidence of work experience and extra-curricular activities helps to demonstrate your enthusiasm and skills.

Where can I find work experience?

• The ‘Big Four’ and large accountancy firms offer summer and 12 month internship schemes for penultimate-year students, which can often result in an offer for a permanent position at the end of the internship.
• Internships or volunteering in other areas might be useful, as you are given the opportunity to develop relevant skills such as communication, teamwork and numerical skills.
• The application method is very similar to the graduate recruitment process - either online application forms or CV and covering letter.
• Involvement with university societies and reading relevant media sources are ways for you to demonstrate your enthusiasm and interest in the sector.

Is postgraduate study useful?

• Postgraduate study is not necessary in this industry but it has become more popular in recent years. It may prove to be an advantage as a way of showing your interest in the subject, especially when applying to smaller firms.
• The ‘Big Four’ and other organisations recruit huge numbers of graduates from a range of disciplines with the intention of training them and helping them to obtain accountancy qualifications.
• Accountancy and business services employers support their new hires throughout the qualification process. There are various accountancy bodies that offer qualifications. These include ACCA (Association of Chartered Certified Accountants) and the Institute of Chartered Accountants in England and Wales (ICAEW) which offers a Certificate in Finance, Accounting and Business.
• Part-time distance learning MBAs may also be useful as they can elevate your knowledge and career progression.

How can my career develop?

• Once you are qualified, there are many different career routes and opportunities for post-qualification progression. Overseas secondments are possible in large international firms.
• Career progression varies, depending on individual aspirations and abilities, but it is possible to progress to finance director of a major company within 10-15 years' post-qualification.
• For those choosing to stay within the professional service providers or in practice, partnership is the ultimate aim.
• Those choosing to work as internal providers (in industry, commerce or the public sector), may find themselves progressing to manager roles within two to five years after obtaining the qualification.
• Increasingly, accountants are taking on a more strategic role in business. Those who aim high may make it to finance director or even chief executive.

Typical employers

Big players

The ‘Big Four’ offer a great range of graduate recruitment schemes. Minimum academic requirements are 300 UCAS points and a 2:1 degree in any discipline.

• Deloitte employs over 11,000 people in the UK. There are graduate opportunities in management consultancy, tax, accountancy and corporate finance. Deloitte recruits approximately 1,000 graduates. 
• Ernst & Young has 144,000 people working in offices in 140 countries. Opportunities exist in audit, tax, corporate finance and business advisory.
• KPMG has more than 140,000 professionals delivering outstanding services in over 140 countries. KPMG offers tax, audit and advisory services. It has offices in 22 locations in the UK. 
• PricewaterhouseCoopers LLP (PwC) is one of the world’s largest professional services firms that provides a range of opportunities to graduates in audit, assurance, consulting, business recovery and corporate finance. PwC has offices in 150 countries worldwide and is the largest recruiter of graduates in the UK.

Other big firms that offer graduate opportunities include Baker Tilly, Grant Thornton, HAT Group of Accountants and Moore Stevens. For a more extensive list of accountancy firms visit ICAEW Directory of Firms , ACCA Directory of Members  and Society of Professional Accountants (SPA) .

Other companies such as BAE Systems, Unilever and Tesco Stores Ltd offer graduate opportunities in their accounting departments for those who wish to work within an internal provider.

Finally, many opportunities exist in the public sector. The main public sector employers include: charities, local authorities, National Audit Office, NHS trusts, universities and further education (FE) institutions.

Small to medium-sized enterprises (SMEs) 

SMEs are organisations that make a positive contribution to economic growth requiring well-rounded finance managers and advisers to ensure small business survive and grow. Working for a smaller company can be rewarding because you are more likely to forge a path for yourself within the company, although opportunities to try other departments may be limited.

SMEs are unlikely to use the testing and assessment techniques of larger companies, or follow lengthy recruitment procedures. SMEs are more likely to advertise their vacancies through the local press, university careers service bulletins, local graduate vacancy listings, jobcentres, and word of mouth, rather than rely on their reputation and a presence at graduate recruitment fairs.

Careers services should have listings of jobs with small firms. Also see the Department for Business, Innovation and Skills (BIS). 

Self-employment

Once qualified, accountants attain a practising certificate to serve their own clients, and may practically work as self-employed. This is a possible career path for those who enjoy being self-employed and who feel confident running their own business. Apart from being certified and a decent amount of work experience, business and marketing skills are important if you want to work as a sole practitioner. Find out more about self-employment.

Opportunities abroad

What are my chances of getting a job overseas?

Accountancy firms, especially the ‘Big Four’, operate in a global business environment. The 'Big Four’ firms have many overseas offices, as do the large multinationals, so if you are interested in working abroad, it might worth applying to firms that have offices worldwide.

Accountants’ roles may vary from country to country so check what is expected of you. Once you are offered a position, you may have the opportunity to do a secondment abroad or be transferred to a different location.

It is not essential but speaking a second language can increase your chances particularly if you are going to Russia, China or the Middle East.

Will my qualification be recognised?

The majority of the accountancy qualifications in the UK are recognised and respected throughout the world. The following qualifications in particular are recognised worldwide:

• Association of Chartered Certified Accountants (ACCA)  accountancy qualification, suitable for those who wish to pursue a career in accountancy at any level.
• CAT (Certified Accounting Technician) awarded by ACCA.
• ACA (Associate of the Institute of Chartered Accountants in England and Wales) awarded by the Institute of Chartered Accountants in England and Wales (ICAEW) .
• Chartered Institute of Management Accountants (CIMA) qualification in management accounting, Certificate in Business Accounting and Certificate in Islamic Finance. 

Where are the opportunities?

The UK has reciprocal arrangements in place with various accounting bodies worldwide.

ACCA has a significant presence in the Caribbean and a growing presence in Canada, USA, Africa and the Middle East and Asia pacific. Other popular destinations include Australia, New Zealand and China.

Under the European Commission Directive 89/48/EEC (recognition of professional qualifications), qualified accountants who wish to practise in mainland Europe as auditors, may register as a member with the relevant national professional accountancy body on successful completion of aptitude tests and a prescribed period of practical experience.

Members need to contact the relevant professional body directly in the country in which they wish to work. Accountants who do not wish (or are not qualified) to conduct audits may have to take an aptitude test.

Future trends

Role of the ‘Big Four’

The ongoing dominance of the ‘Big Four’, as well as their global structure, is currently examined from many angles, not least the relationship between their auditing and consulting functions.

US regulators in particular have already attempted to come to grips with how they can possibly regulate an entire ‘Big Four’ firm when their oversight and investigatory capacities apply only to those offices in America.

Their concerns are mirrored in many other countries, including the UK, and global discussions will continue to seek answers to the dilemma.

Recruitment - Competing for talent with the ‘Big Four’

This sector has seen an increase in the number of applications in the last two years. The 'Big Four' are always reviewing their recruitment methodology to attract the most motivated and enthusiastic people for the profession.

Smaller firms will continue to struggle against larger firms for talent at all levels, including graduates. One means of smaller firms competing against bigger rivals is to explore non-traditional recruiting means, targeting graduates with general business majors and using intensive training to bridge existing skills gaps.

Place of women - diversity initiatives

More women are entering the profession and may even begin to outnumber their male counterparts in future years.

Overall the percentage of female members of all six chartered accountancy bodies has risen from 28% in 2004 to 33% in 2009. (Financial Reporting Council, Key Facts and Trends, 2010)

Impact of technology

Accounting has seen tremendous advancements thanks to the growth of information technology in recent years.

According to Accountancy Age  magazine, accountants are ahead of the game when it comes to the use of new technology to grow their business. The UK currently ranks highly for e-commerce so this area is likely to have a huge impact on work in the sector in the future. Improved technology has meant that accountants can spend time on financial analysis, adding value to the business and to their role.

Regulation

The Financial Reporting Council (FRC) is a regulator that monitors and enforces accounting and auditing standards, oversees the regulatory activities of the professional accountancy bodies and promotes high standards of corporate governance.

Regulation is one of the greatest challenges for the profession, despite accountancy’s reputation for strict regulation. Many organisations, such as the Institute of Chartered Accountants in England and Wales (ICAEW), are working towards reinforcing and encouraging good performance and reducing the complexity of audit practices in order to make the profession attractive to professionals and graduates.

Environmental accounting

Environmental accounting is a growth area. The vast majority of accountants believe they will become involved in calculating carbon offsetting at their firms. This will be done by encouraging transparency in areas including auditing, climate change and research.  

The process of carbon offsetting involves calculating the emissions produced by a firm and then purchasing 'credits' from emission reduction projects. Carbon offsetting looks to be accountancy's next big challenge and developing the skill set needed to navigate this exciting new field might be a make-or-break challenge in an accountant's career.

Jargon buster

• ABC - activity-based costing. A costing system that identifies the various activities performed in a firm.
• Asset - anything owned by an individual or a business that has commercial or exchange value.
• Audit - inspection of the accounting records and procedures of a business, government unit, or other reporting entity by a trained accountant for the purpose of verifying the accuracy and completeness of the records.
• Balance sheet - an itemised statement that lists the total assets and the total liabilities of a given business to portray its net worth at a given moment of time.
• Balanced scorecard - a strategic management system based upon measuring key performance indicators across all aspects and areas of an enterprise: financial; customer; internal process; and learning and growth.
• ‘Big Four’ - usually refers to the largest accounting firms: Deloitte; Ernst & Young; KPMG; and PricewaterhouseCoopers LLP (PwC).
• Book-keeping - the recording of business transactions.
• Break-even analysis - an analysis method used to determine the number of jobs or products that need to be sold to reach a break-even point in a business.
• Capital expenditure - the amount used during a particular period to acquire or improve long-term assets such as property, plant or equipment.
• CCAB - Consultative Committee of Accountancy Bodies. Comprises the six major accountancy professional bodies in the UK. Provides a forum for discussion of matters affecting the profession as a whole and enables the profession to speak with a unified voice to government.
• CEO - chief executive officer.
• Credit crunch - occurs when the supply of credit evaporates and there is a reduction in the availability of loans.
• External audit - an audit conducted by an individual of a firm that is independent of the company being audited.
• Financial accounting - the area of accounting concerned with reporting financial information to interested external parties.
• Financial analysis - analysis of a company’s financial statement, usually by accountants or financial analysts.
• Fixed cost - cost that does not vary depending on production or sales levels, such as rent, property tax, insurance, or interest expense.
• GAAP (generally accepted accounting principles) - Most countries have their own GAAPs, although in Europe and many other parts of the world, countries are adopting the international financial reporting standards.
• Internal audit - an independent appraisal function established within an organisation to examine and evaluate its activities as a service to the organisation.
• Overheads - the costs associated with providing and maintaining a manufacturing or working environment.
• Recession - a general slowdown in economic activity for two consecutive quarters of the year as measured by GDP (gross domestic product).
• Trial balance - a listing of the accounts in your general ledger and their balances as at a specified date.
• Variance analysis - the process of examining in detail each variance between actual and budgeted/expected/standard costs to determine the reasons why budgeted results were not met (e.g. sales prices being too low).
• Year-end - end of the financial year.
• Zero-based budget - where the expenses or costs of the prior year are not taken into consideration when establishing expense or budgetary levels looking forward.

AGCAS

Written by Dashi Alpion, Aston University

Date: 

August 2010

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