Audit vs. Tax – What are the Differences and Which One is a Better Career Path?

Why You Should Choose Audit and How to Answer the “Why Audit” Interview Question

Learn How Businesses Work from the Inside Out

Auditors review company financial statements, controls, processes and operations. They dig deep into the operations of companies, holding control interviews with key members of the management team down to lower-level project managers. This allows you to gain an in-depth perspective on how different types of organizations function. In addition, auditors are typically working on large, successful businesses. So not only are you learning how a business operates, but you are learning how the best businesses operate. This knowledge helps auditors make future career moves into operations, finance and top management roles.

Develop Broad Business Skills with Diverse Experiences

No two clients or audits are the same. As an auditor, you will work with diverse clients in a variety of industries. You will have exposure to the management teams of the companies that you audit. This exposure to different businesses and management teams gives auditors broad business knowledge, skills, and connections, which can become valuable in many post-audit career paths.

Increase Earning Potential

Big 4 auditors typically earn between $60,000-$70,000 at entry level. Within 5 years, compensation often exceeds $100k. The learning curve is steep but so is the earning trajectory for high performers. Because these Big 4 firms are so large, there are almost always opportunities to continue advancing and moving up the ladder. If you perform well, you will be promoted. Audit experience also leads to high-paying opportunities in corporate accounting/finance roles and top MBA programs.

Reasonable Travel Requirements

Audit travel depends on client locations but is generally manageable for most professionals. If you do not live in the same location as the client being audited, expect 50-75% travel during the busy season (Jan-April). If you live in the same city as your client, then you will likely not need to travel. Its important to note that even though you may be working in the Detroit office, for example, you may need to travel regularly to central Michigan to audit your client. This can have a significant impact on your work-life balance.

Why You Should Choose Tax and How to Answer the “Why Tax” Interview Question

Become a Tax Expert on Taxation

Diving deep into the complexities of tax codes and filings allows you to gain unparalleled tax knowledge. Being an expert in corporate taxation is a niche skillset that many large corporations need. This high-level expertise is invaluable for companies seeking tax planning and preparation assistance, especially when they have international operations. Tax experience in the Big 4 can make you an extremely valuable professional and can lead to a number of career opportunities.

Increase Job Stability

As long as the US is taxing businesses and individuals, there will be a need for tax professionals. Additionally, businesses need tax help year-round. Not only do tax professionals help prepare year end filings, but they also provide tax strategy throughout the year, helping companies limit their tax burden. As a result, working in tax provides a relatively stable career. Auditors see more volatility as business performance can fluctuate and the need for auditors is not consistent year round.

Avoid Extensive Travel

If you prefer home life stability and a consistent schedule, tax might be the move for you. While there are periods that are busier than others, tax professionals usually avoid extensive travel. Tax travel is confined to visiting client sites occasionally during filing seasons. Most work can be conducted without excessive face-to-face meetings. Additionally, the consistency of your day-to-day is a huge benefit, making your life more predictable.

Higher and Faster Earning Trajectory

Entry-level salaries are generally a bit higher for tax roles than for audit. Additionally, experienced tax professionals typically earn higher incomes as well. Tax professionals also can progress at a faster pace than comparable audit managers and directors. This is likely due to the fact that tax specialization is less common, so there is inherently less competition. Specialized tax knowledge provides significant earnings power over time.

The Choice Is Yours: Audit vs Tax

Both audit and tax offer rewarding careers at Big 4 accounting firms. Tax provides specialized skills, while audit delivers broader business exposure. While tax professionals typically make more at their respective accounting firms and can easily move into industry, there are fewer exit opportunities. Tax is a very focused career and skillset, so if you stay in a tax role for too long, you will be limiting your exit opportunities. On the contrary, the exit opportunities from audit are numerous and wide-ranging. If you are unsure of where you want your career to end up, starting your career in audit might be the smartest move. However, if you know that you want to do tax long-term, starting in tax will provide the benefit of a very lucrative career. 

With quality Big 4 experience on your resume, you are well-positioned for success in either path you pursue.