Auditing vs. Taxation

This is actually hypermeganet's gf posting, as I am the one applying for MAcc programs.

My advice would be that, if you have an undergrad in accounting already, and are equally interested in both options, go for a master's in tax where possible. The credit hours will still count towards a CPA, which is the most important thing for audit - Big 4 firms are going to train you to their own standards anyway. Whereas for tax, getting the educational/legal background might be more beneficial.

However, if you want to add more schools in, certainly apply to accounting programs as well. There are many great schools that don't offer a specific tax program but do have specialized tax coursework.

Just my 2 cents.

Well, UVA's program is an MS in Accounting. You can specialize in tax, but you'll still have the basic accounting foundation.

I don't know why they'd be suspicious, it's pretty common for people to change their minds about what career track they're interested in. If they asked about it, you could explain that you had considered tax, but ultimately decided that you preferred the auditing industry, and that the MS in Tax had just helped supplement your undergraduate studies in terms of the CPA credit hours.

Yes, audit is a little more versatile. However, I was under the impression that once you've worked at a major public accounting firm, it's pretty easy to transfer to a different department or an auditing position at one of the other firms.

Well in general, if you majored in accounting undergrad, and you didn't HATE the limited number of tax accounting classes that you HAD TO take in undergrad, one should consider taking MS Taxation degree instead of MS Accounting degree to meet 150 credit hr requirement because:

Adding tax base to your accounting base only makes you an all around person. It comes in very handy during recruiting because (assuming you are 50-50 on tax vs audit jobs) if you apply for tax jobs (transfer pricing, M&A Tax Consulting etc), your tax degree already prepped you well for career in taxation. If you apply for audit job, you are still well qualified since you already studied accounting as undergrad and you can explain to the recruiter that even though you are interested in a career in audit, you chose MS Taxation for grad degree because you wanted to be a better all around accounting professional, etc.

Also, MS Taxation is nothing like required undergrad tax classes that you took as undergrad. You will never deal with individual income tax stuff unless you take an elective related to that area. All CORE MS Taxation courses are law classes. Your textbooks (at most top Tax programs) are law books with IRC section codes and case-studies in areas such as Corp Taxation, International Tax, Partnership Tax, Estate & Gift, etc.

Recruiters from public accounting firms don't care whether you did Undergrad Accounting + MS Accounting or undergrad accounting + MS Taxation combo. But for some tax jobs (especially direct application to fancy tax areas), they strongly PREFER (word used in their job posting) applicants with MS Taxation degrees. But it doesn't mean that people with MS Accounting can not get tax jobs.

nink makes some very good points.

I am currently a Senior Tax Associate in a Big 4 firm and got my Masters from USC's MBT Program. I can say it definitely gave me an edge in getting the job I have today compared to those without any kind of graduate accounting degree when I went thru recruiting. But more important, it gave me an edge in my actual job performance when I can demonstrate to my Managers and Partners my technical skills and ability to pick up new issues quickly in this fast paced environment.

If you really want to get into a career in Tax sooner or later you would want to get either a MST or a MAcc with a Tax focus. I'd say for a non-Tax career a MAcc degree is not necessarily needed.....my firm still hires alot of people for both Tax and Audit WITHOUT a Master's degree (but keep in mind I'm in California which currently still has only a 120 semester hour requirement for sitting for the CPA exam most states are switching over to 150 semester hours/225 quarter hours).

Kudos and thanks for the intel Nink!

Yes, I'll be done with a double-major in Accounting and Finance at the end of the Fall Semester 2010...so I'll definitely have the credits to sit for the CPA after either Masters program. I'm kinda leaning towards the general Macc because of the availability and abundance of Macc programs out there.

Thanks hypermeganet, yah that makes sense that Tax would be a good complement to an Accounting undergrad degree. I'm looking for schools on the East Coast, so if I can get into UVA, then I might have to go for a Tax degree.

Although I wonder...if you apply for Auditing and Have a MS in Tax, will they be suspicious of why you're applying for Auditing instead of Tax?...or can you just explain your idea of it complementing your Accounting undergrad degree?

*Also, I think I will eventually apply to an auditing position...it seems like there is a wide variety of different career options if you decide to switch from Auditing, where-as with Tax, you are a bit more cornered into 1 functional area.

Thanks again for the info Hyper...that UVA in Accounting with Taxation specialization sounds really appealing to me, since you get the foundation in Accounting as well as the Tax knowledge.

Yah, I think you're right about being able to move easily within the public accounting arena with either a Tax or Audit position. What I was thinking was if you wanted to go outside of public accounting like as an analyst or cost accountant, auditing experience would ideal, where-as tax experience would be best for mainly IRS tax-work.

I'm still interested in Tax though, and haven't completely made up my mind. I have 1 friend who works in the IRS and loves it, and another who is a tax attorney who loves his job, but he works pretty insane hours.

Cyan, thanks man...yah I'll take a look at those programs. It seems like the Accounting foundation with a tax concentration might be good if you want to leave the Tax option open for yourself.

Some programs offer summer sessions that catch students up to the equivalent of an undergraduate in accounting.

My question is, given that accounting firms (supposedly?) care more about a candidates eligibility to take the cpa exam vs. what area of accounting they concentrated in (tax vs. audit), is it wise to concentrate in tax since it seems like that is a more valuable skill-set to develop in the classroom? My read from comments above is that audit skills are easier to pick up on the job vs. tax skills (the reference to tax professionals being required to go back and get an MS in order to advance in the firm).

Gracias Nink and TaxGeek for the great intel! Yah, what you're saying makes a lot of sense. I will definitely look into tax programs. I'm heading over to the World MBA tour tomorrow in New York, hopefully some of the reps will be able to talk about their accounting/tax masters programs a bit.

So far I've had 2 Tax classes (Federal Tax and Estate Tax) and I enjoyed both...and they both that law class feel, having been taught by an attorney, and revolving around the tax codes/court cases.