Tax vs Audit for a CPA firm

<p>Which one would you choose and why?</p>

<p>It would be especially helpful if people already working in the industry can give their insights? What do you like and dislike about what you are doing? I heard that audit generally has higher TO than tax? If that's the case, what makes it "worse" than tax?</p>

<p>I find tax may be a bit more interesting to "play with" at the moment. Planning and structuring look "fun". But I am also attracted to opportunies in SEC, GAO, and bank examination and feel a bit more sense of purpose in those jobs (I live in DC). My permanent resident status means I am not eligible to apply for most fed jobs until 2011 (though Permanent Res maybe be considered if they are really short on people). In the meantime, auditing experience seems to provide a more relevant experience and preparation for them. One may wonder why not IRS as far as "sense of purpose" goes; I find protecting customers and investors more satisfying than going after tax revenues. Besides, IRS got a bad rep everywhere. Perhaps I shouldn't think that way but I really don't want to be the running joke when I tell people where I work. ;)</p>

<p>Well, first understand that there are MANY, MANY more audit jobs than tax jobs. Every major government agency has auditors. Audit is the backbone of accountants.</p>

<p>Secondly, although all areas of law and accounting change, nothing seems to change as much as tax. It requires a large amount of continuing education.</p>

<p>Third,Auditors can get a LOT more in fees than tax work;however, they also have a LOT more liability exposure....think Author Andersen et al.</p>

<p>Forth: Accounting firms, for the most part, have a very structured way of training auditors. They don't just throw them into an engagement and say "go." You have training, audit checklist, prior audit reports and seniors on the engagement to direct the engagement. In tax, you are basically thrown into a situation and told to do it.... There is a LOT more independance in tax than in audit,which is why more accounting firms want folks who have already taken a number of tax courses before they get hired. </p>

<p>Fifth, tax folks are in less demand then they were twenty years ago due to the proliferation of tax software that folks are using. Moreover, few people are willing to pay for tax planning. They might pay a lot if they get into trouble,but they don't normally pay for planning. Obviously there are exceptions,but this is the general rule.</p>

<p>Sixth: tax involves more legal research while auditing, especially at the lower levels, is dictated by the audit manual and check list which is usually standardized in the firm. This is done to minimize liability and to assure as much as possible compliance with statement of auditing standards. They also must understand statistical software use for choosing items to audit.</p>

<p>Seventh: Auditors need to understand the Statement of Auditing Standards and accounting theory. Tax folks need to understand the Internal Revenue Code, regulations and pronoucements and learn to use tax preparation sofware.</p>

<p>Eighth: Audit is a much better preparation for learning the material for the CPA exam. There is very little tax on the CPA.</p>

<p>Ninth: Although there are exceptions, tax people rarely travel. Audits can do a lot of travel.</p>

<p>Before I went into tax, I was an auditor. I can tell you that nothing was more enjoyable and fullfilling than when I uncovered a fraud during the audit. It was a hoot. However, this is relatively rare.
Personally, I think tax work, overall, is more fun, but I am sure that there are plenty of audit folks who would disagree.</p>

<p>^thanks A LOT!</p>

<p>Great post Taxguy!</p>

<p>Thanks taxguy.</p>

<p>That was awesome thank you!</p>

<p>Well I couldn't tell you because I'm in the same boat as you. But what I have been doing is talking to professionals who do audit, or tax, and see which they prefer and why. But the best way either you or myself are going to find out is through first hand experience.</p>