ROI for MBA - public accounting pre MBA

Question

I was curious if anyone out there that currently works in public accounting has completed an ROI for an MBA. Right now Audit managers make roughly $100K and a 3rd year manager is making $130-140K. Partners are making $300K +.

Given the current economic environment, public accounting is a fairly good bet considering the numerous layoffs in finance and other industries. I have been considering going into investment management post MBA, and have been in public accounting for a few years. Not considering the job satisfaction (purely monetary), can anyone provide some insight into how you completed your ROI. I have completed one, but want to see some varying calculations.

Jerz · Answer

I'm currently a 3rd year manager at a Big 4 firm and am going to bschool this fall. As you mention in your note, manager compensation at a Big 4 firm is more than the avg starting salary of an MBA, so the ROI becomes difficult on purely monetary consideration. Unless you go into a highly compensated industry post MBA (the alphabet soup of IB, HF, PE, VC, or MC), there's a good chance your post-MBA compensation - even over a longer time period - will not be much more than what you could have earned had you stayed at the CPA firm and become a partner. So basically what I'm saying is that purely looking at numbers, my ROI for an MBA was awful. Using avg. starting salary for the role I want post-MBA and reasonable estimates for future increases, I think my breakeven year came out somewhere around infinity.

But that's not the point. If I wanted to work for a Big 4 firm and become a partner, an MBA would be the last thing I did - unless it was an EMBA that the firm paid for. The main reason I decided to pursue an MBA is because the thought of working for a Big 4 firm or doing accounting for the next 35 years brought tears to my eyes. The MBA gives you pretty close to a fresh start, even in this economy, and gives you career options that no amount of Big 4 experience or a CPA can match. So I made the decision that, in the short run, I would be willing to give up potentially tens of thousands of dollars a year in order to pursue a career that I actually found rewarding.

cdnaudit · Answer

wow... it is posts like these that get me thinking about the road ahead. I'm a commerce undergrard doing my first summer with a Big 4 this year. I'm ready for 3 years of long hours and BS*, but is it really that bad? glassdoor.com is not very encouraging either.....to put it simply, I haven't started and I'm already looking at my exit opportunities through an MBA.

advice? thoughts? opinions from big 4 alumni are greatly appreciated.

advice? thoughts? opinions from big 4 alumni are greatly appreciated.

nink · Answer

I was a manager of technology advisory unit of Big 4 firm until 2 weeks ago. (I also worked in taxation and audit side before my promotion to advisory side)

It's true that the compensation was pretty good for a pre-MBA job and I am not even sure if I can make more than how much I would have made as Big 4 manager 2 years from now even with my MBA. (upon graduation from bschool)

However, as many of you guys already know, people leave Big 4 firms sooner or later. Very small percentage of current employees stay on and hope to make a partner at the firm.

Just like attaining a CPA certification comes as a no-brainer when you work in Big 4, I think attaining MBA is a no-brainer if you don't plan on making Big 4 your career objective. (and not pursue CPA related profession after Big 4)

When 2008 began, I just completed my MS degree in MIS in the winter semester and I wasn't even thinking about bschool. I was happy making what I was making with my relative years of experience.

However, I knew I was going to leave sooner or later and I didn't want to wait on bschool until I was much older. Since older applicants aren't welcomed by many bschools, I wanted to get my MBA out of the way.

When both my roommate/best friend and my girlfriend decided that they will pursue bschool if I decided to pursue MBA, that was the critical factor in deciding on pursuing MBA.

Now that I know that I will be headed to bschool in the fall with certainty, I am glad that I took this route. I have no regrets, regardless of the job market out there.

I want to look at my bschool experience as a long term investment in myself, not through a short term cost/benefit analysis. In fact, I am not even sure how my MBA degree will benefit me in next 3 to 5 years. I always make plans for myself but life makes its own plans for me. So I am both excited and nervous about my venture.

I would recommend MBA to anyone who believes that they are worthy of 2 years of time and $150k+ debt in investment.

Jerz · Answer

I don't want to be unfairly harsh towards Big 4. There are plenty of partners and other managers I know that absolutely love what they do, and look forward to long, happy and prosperous careers with the firm. But there are plenty others who either 1) knew coming in they just wanted to get a few years experience, pick up their CPA and leave, or 2) wore down over time and decided to seek a better life elsewhere. I think in this regard it's the same as any other professional service role role - some people love it and do very well for themselves, but it's not everybody's cup of tea. Even though I'm leaving my firm, I still believe it's generally a very good place to work. It just came down to the type of work I could do in the firm wasn't the type of work I wanted to do.

Make sure you take what you read on the web (or what the firms tell you about their culture for that matter) with a grain of salt. As with any organization the size of the Big 4 firms, peoples' experiences vary pretty widely depending on who they work for, what projects they're on, etc.

glettian · Answer

I'm in the boat of having gone into the Big 4 Audit route with no other intentions than to stay for a couple years and pick up my CPA. I now work in corporate finance and look to pair these two experiences with an MBA to take the CFO route. There's very, very few people in this world who love auditing that much to want to stay till Partner. Personally, I'm not one of those people. I think getting a CPA and having the Big 4 experience on your resume certainly helps but beyond those benefits I didn't see much of the Big 4 path that appealed to me. I was much more interested in the strategy aspect of running a company which being an auditor fails to provide experience for.

cdnaudit · Answer

I know there are threads on this specific subject, but I would like to know *in your experience* how did the big 4 name and the CPA/CA help you in getting admits? are we seen any differently than applicants with regular corporate type experience?

I had the impression that not many CPA/CAs applied to b-school since they had the corporate finance->CFO path cleared by the big 4 experience, is this so?

again, responses from anyone who knows about this are greatly appreciated.

Thanks.

Jerz · Answer

I'd say that among candidates with a CPA background Big 4 experience on the resume helps, but it's certainly not going to be seen in the same light as the big 3 consulting firms or a bulge bracket bank, which are more traditional feeders for top MBA programs. Even then, the only thing the employer brand gives you is that the adcoms know that those firms have a certain baseline in their own recruiting. To get admitted you still need to provide compelling stories about the specific experiences and skills you've gained while working there.

If you want the Corp. Finance -> CFO path, as glettian said, it helps to have a CPA and Big 4 but is not a prerequisite, and even then I think you'd find many CFOs at top public companies have an MBA as well. It's really only the very top partners in Big 4 who can leave and go directly into C-suite roles.

cdnaudit · Answer

Thanks, that's along the lines of what I was thinking. well put.

+1

ROI for MBA - public accounting pre MBA

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