When I started my first year in public accounting, I wish I knew the secrets to being a top-rated Big 4 accountant. But before I get into the essential ways to become a top-rated Big 4 accountant, you need to understand the Big 4 rating system first.
Big 4 Rating System: At a High Level, How Does it Work?
Generally, you’re rated at least once a year by your Big 4 firm. These ratings will impact your raise, promotion potential, and bonuses. And all engagements you worked on may be considered. The Big 4 performance review process is stressful because it is not easily predictable or transparent. Also, you may be scored more on soft skills rather than your competency as an accountant who worked 80+ hour weeks. The performance review process is complex, and there’s not enough time to get into the granular level here. So, know that this process will affect you. However, take comfort in the fact that there are things you can do to become a top-rated Big 4 accountant.
Secrets to Being a Top-Rated Big 4 Accountant
1) Do not be afraid to ask questions
Public accounting is a pull, not push, learning environment. Big 4 firms do not expect you to know what you are doing, and having lots of questions is okay. There is nothing more frustrating than to give an “easy” task to a first-year only to learn that days later, they are still trying to figure it out. So, suck up your pride and ask for help. It doesn’t mean you’re dumb — you probably don’t have all the information or don’t know where to look to get the required information.
It’s okay if you need help or clarification. Sitting and staring at the workpaper because you don’t know how to approach it or got stuck at some point isn’t good for anyone.
One caveat to this is with Excel formulas. If you are having trouble figuring out a vlookup or if/then etc., use Google. There will ALWAYS be a clearly defined example of how to properly use an Excel formula online. Additionally, there are also many of Excel shortcuts that make you look smart and save time. No top-rated Big 4 accountant is going to ask their senior how to perform common Excel tasks. So, take an Excel class before being hired if you are weak in this area.
2) Develop a systematic organization method — or use my technique
On my desktop, along with a ton of other random stuff, I have organized my work into these folders:
- “Current Client” – A folder for whatever client on which I’m currently working. I also drag it to the quick launch menu in Windows for quick access.
- Clients – This folder is where I keep work related to past clients. When I roll off the engagement, I move the files here. So, never delete anything.
- Temp – I keep a “temp” folder for items that I don’t need to organize, but, at the same time, I don’t want them to clutter my desktop.
- Reference – I keep files from training or company guidance that may be relevant.
- Pending items – This will be a big help, and I wish I had done this sooner. What I usually do is take whatever sections I’m assigned to for my current client, then take the prior year file and somehow get it into a project management mode in Excel. (Depending on your firm’s software, it may be easy to do.) For each test and file that was in the workpapers last year, I put it in a row in Excel.
- Additionally, I keep a running check on what tasks I have finished and what tools/info I will need to complete it. I will also list questions I need to ask, as well as whatever is pending from the client. I like to put something like “sent request for XYZ detail 8/21/20.” Also, you can get creative with color-coding too. I know this sounds basic/like overkill, but you will soon realize how important organization is to your performance rating.
My Detailed Folder System
Within the client folders, I have a folder for controls testing and substantive testing. These two will hold the bulk of the documents for a client. Also, in my main client folder, I keep:
- The trial balance for the current year and the prior year trial balance
- Financial statements
- AssignmentsSchedule — a schedule of when my sections are due. These due dates are usually given to you by a senior when you start the engagement.
Within the controls or substantive folder, I have a sub-folder for each process, such as fixed assets, expenses, or revenue. Within those folders, I will have a subfolder within them. So, for example, substantive procedures for fixed assets I might include:
- Fixed Asset Rollforward
- Construction in Progress
Email Folder Organization
You may find that some seniors/managers keep emails in subfolders similar to how I have it on my desktop above. I do not recommend you implement this practice until after your first year. The only problem with this is that when you try to search for something, you may not be able to find an important file easily or at all.
On the other hand, you should keep a folder dedicated solely to outstanding client requests. When I send an email requesting a response or document from a client contact, I drag that email from the sent folder to “client requests.” When they respond, I move it back to the sent folder (don’t delete it — never delete anything). This makes it easy to track when you sent requests and with whom you need to follow up.
Within Outlook, you should also utilize the “task” feature. When you get an email, there will be a little box or check to the right of the email. If you click it, it will move it to a task pane on the bottom right-hand side. This is especially helpful when you are in the middle of something and don’t have time to respond or deal with it immediately. Instead of relying on your ability to remember such things, it will be there sitting in your taskbar. When you get a moment, go through and try to and clear the running list of things.
3) Take notes
You will get this beat into you non-stop during training, so I’ll give you tips on how to do it effectively instead of just saying to do it.
- You will need to manage watching the senior/second-year show you what to do while jotting down notes. It may be a struggle because some people are “do-ers” meaning they learn easier by doing, rather than just watching.
- If your firm uses Outlook, it has tools for quick note-taking. Using the taskbar mentioned earlier, you can double click the subject line and start typing. Also, using Outlook for this purpose is excellent when a senior begins to give you a task randomly.
- If you take notes on paper and have lousy handwriting, get them onto the computer so you will be able to read it.
- Ask for clarification if you don’t understand what the senior/second-year is telling/showing you. If you don’t know now, you likely won’t know later when you’re trying to figure it out.
- And bring a notepad with you whenever possible. You always want to look AND act the part of a top-rated Big 4 accountant 🙂
4) Never underestimate the amount of documentation needed for “walkthroughs”
I’m giving walkthroughs their own section because they’re that big of a deal. You will go on the walkthrough and think you know everything about the process, only to realize you didn’t cover half of what you needed to. While on walkthroughs, keep in mind that you need to be focusing on:
- When/where transactions hit the accounting information system. For example, when a sale is recorded, when an account payable is recorded, and so on
- Which information systems the reports/files are being pulled from, and where the document comes from. So, you can ask, “Is it an excel file that your team created or is a report generated from your SAP system?”
- Keep in mind that the prior year documentation may not have everything you need. There has been recent guidance from the PCAOB about walkthrough procedures.
5) Diligent Self-Review so You Can Be a Top-Rated Big 4 Accountant
Again you will get this beat into you, but there are some things you have to do before signing off on a workpaper. The extra time taken to review your work will save tons of time for you and the reviewer.
- Make sure tickmarks are referenced out (see below)
- Work on something else for a few minutes, and then come back and check for spelling/errors. You will hardly ever find mistakes like this if you do it right after you finish.
- Within the audit software, you will see that “assertions” from the audit class are back. CEAVOP didn’t go away, and they are relevant to your work. If the audit program the senior set up says we’re testing CEA of fixed assets, but the testwork shows C&A, you need to ask questions or fix it. These are great “coaching moments” for you to understand how specific methods of testwork apply to each of the assertions.
- Did you perform the tests the audit program says? The software will usually say, “XZY obtained the ZXY schedule and performed the following procedures…” So, make sure you performed what the audit program requires.
- Ensure the dates are changed. Almost all workpapers are “rolled forward,” meaning you will take the prior year document, change the substance, and re-use it.
How Tickmarks Work
Tickmarks are a way of saying that the number on workpaper A also appears on another workpaper. A tickmark (TM) is usually a reference to the number assigned to a workpaper within your firm’s audit software (an example could be 18.104.22.168)
When a number is going to another workpaper, it goes on the right side of that number. If it is coming from a workpaper, it goes on the left side. If you’re on w/p 1.4.2 have put a TM to workpaper 1.4.3, there should be a TM on 1.4.3 with that same number going to 1.4.2.
Auditing is all about levels of detail. So, at the top, we have the financial statements, and then you have the trial balance (TB), which is more detailed and breaks out individual accounts and subgroups. Within each trial balance account, you have a detailed list of transactions/entries that have a total equaling that trial balance account.
So, say you’re working on SG&A expenses, and the financial statements show SG&A is $50M. There will be a “trial balance” with amounts for each SG&A account and subtotals within each group (payroll, maintenance, etc). The grand total under SG&A on the trial balance will be $50M. Further, let’s say admin expenses are $10M and there is only 1 account. You will get a detailed list of transactions totaling $10M. Since the detailed transaction is the supporting documentation, the numbers are going UP to the financial statements.
For fun, let’s say the workpaper that has the detailed transaction is workpaper 2.5, the trial balance is TB, and the financial statements are FS. It would look like this:
On the total on the detail at 2.5: $20,000,000 TB
On the trial balance: 2.5 $20,000,000 FS
On the Financial Statements TB $20,000,000
It’s easy right? Now don’t forget to check your references. Your reviewer will always check your TM references so this will be just one less thing to fix.
Other Tips to Become a Top-Rated Big 4 Accountant
- Don’t whine — nobody likes a complainer.
- Have fun at first-year training and network with people.
- You are not there to find fraud, and you will most likely never see any. There is also usually a reason for any “mistake” you find.