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Making a career in accountancy

My talk for Speakers for Schools at Salford City College. It recounts my own career and guides students on how to get into the profession.

Summary

Delivered 26 January 2016. Posted 6 February 2016

I was introduced to the charity Speakers for Schools just over a year ago, and have so far given eight talks for them at state schools in the North West.

About half of the schools have asked for a talk around my life, career and the nature of success while the others have asked me to cover a specific topic. I have previously spoken on:

On 26 January 2016 Salford City College asked me to address their students at their Pendleton Sixth Form Centre on careers in accountancy. I have now converted that talk into this page, after making the changes needed for an article to be read rather than a speech to be listened to live.

Careers in accountancy

I’ve been asked to talk about careers in Accountancy. In particular:

I’m going to talk for about 20 minutes, and then we can spend the rest of the time on questions. As well as accountancy, you can ask me about anything else. I’ll do my best to answer.

My talk is in three parts:

My own career

I had never heard of accountancy until, about the age of 16, the careers teacher at school recommended it. I was not in the least bit interested. My goal in life was to become a research scientist, probably in theoretical physics or astronomy. That is why I did science A-levels, and then read mathematics at Cambridge.

At Cambridge I realised the sad truth. I was not bright enough to be the kind of scientist I wanted. That is still the greatest disappointment of my life. It also meant I didn’t know what I wanted to do; I never had a plan B. Since I didn’t know what I wanted to do after Cambridge, I did a postgraduate certificate in education as a way of putting off any real decisions. Obviously after doing a PGCE, the next step is to get a job teaching. That is what I did.

About the same time, a family friend had suggested starting a small business where I would deal with the paperwork. This never happened but as part of that I looked at some accountancy textbooks. They were dreadfully boring; almost designed to put you off the subject. However, it did mean that I knew accountancy existed.

In my first half term holiday teaching, I had one of those moments of luck which can change your whole life.

In Central library in Manchester, I saw a book on the shelf. The title was “Accounting: the basis for business decisions.” The book is still in print. When I looked on Amazon today, the 11’th edition, with the same title and written by Walter B. Meigs and Robert F. Meigs is available for purchase.

The title of the book interested me. I turned a few pages, and was still interested, so I borrowed it. A week later I had read all 900 pages. I then read the intermediate volume, and the advanced volume and was hooked. That is how I got interested in accountancy. If you want to know why it was so interesting, ask me a question later on.

Despite my interest, I only decided the following July to train as an accountant. By then, all of the big firms were full. I didn’t want to wait for another year so I started with a very small firm, 3 partners, about 24 staff with offices in Ashton under Lyne and Hyde. 18 months later the firm split, and I did the second half of my training in the Hyde part of the firm, which had one partner and 11 staff. You can see that this was not a big firm!

My job consisted of preparing accounts from incomplete records. A small business would bring you a bag or a box with bank statements, cheque book stubs, invoices, maybe accounts book. My job was to convert this mess into a set of accounts that made sense. We also had to work out the taxable income, and that is how I first got interested in tax.

I was never going to stay at that firm after I qualified. A recruitment consultant told me that if I was interested in tax, the only firm worth joining in Manchester at that time, 1977, was Arthur Andersen. So I joined them. Shortly after joining Arthur Andersen, I gained my second professional qualification. I passed the exams to join what is now called the Chartered Institute of Taxation. At Arthur Andersen, it was great experience with lots of international tax work.

Only 2 years after I joined them, I was part of a 3-person team (me, my boss the tax manager and his boss the tax partner) working on the reorganisation of the UK arm of the 19th largest US multinational. This reorganisation involved companies worth over $2 billion. At the age of 30 I became a manager and went overseas for the first time in my life to Arthur Andersen’s training school near Chicago.

My job at Arthur Andersen was very well paid. When I was 31, there was some kind of scandal in the papers about the highest-paid head teacher in Bury and it mentioned his salary. I was shocked to find that I was being paid more than him. However, I got fed up with Arthur Andersen for reasons I won’t cover now and left.

In particular, I wanted the greater freedom of a small firm so I joined a 6 partner firm with about 60 staff. 18 months later I became a partner in that firm. About 18 months after that I realised I hated it and decided to leave. Accordingly, in 1987 I joined Price Waterhouse, now called PricewaterhouseCoopers, in Manchester. In 1990 I became a partner and I stayed with the firm until I retired.

In my 40s, while a partner I decided to take some more examinations and became an associate member of the Association of Corporate Treasurers. You never stop learning. I joined the Association of Corporate Treasurers because it was relevant to my specialist interest in Treasury taxation.

From the time that I qualified and joined Arthur Andersen, my work was always in taxation. Some of this was for individuals and small businesses.

The single piece of work in my entire career that I am proudest of is reorganising a small family company in 1985. It wasn’t technically complicated. All the challenges were managing the human relationships involved. The clients were two elderly parents who had 8 children and a small company. The father was afraid that after he died civil war would break out inside the family. He had seen it happen when his brother died, with the brother’s children and brother’s family company. My work meant that when the father died, running the company was left to 3 of the children. They could manage it, when 8 children would never have agreed on anything. The other 5 children basically got money instead of part of the company. Eventually the company did spectacularly well and the three became multi-millionaires. 30 years later the family still get on with each other because that deal was fair, even though some became far richer than others.

However most of my work was with big companies, especially international companies, both UK multinationals and American multinationals. Big companies have more complex problems and more scope to do things to save tax. I’ll be happy to talk about tax avoidance in the question and answer session. It was mentioned that I was a member of PricewaterhouseCoopers Supervisory Board.

All of the big firms, including PwC, are partnerships or more precisely limited liability partnerships. The partners in PwC elect a Senior Partner and give him almost total power to run the firm. When somebody has that much power, you need others to keep an eye on him. Accordingly, PwC’s partners also elect a 15-person Supervisory Board to oversee the management. There are many things that the Senior Partner and his management team cannot do without the approval of the Supervisory Board.

So looking back on my career, how would I summarise the upsides and the downsides?

The upsides

I was never bored. Every day brought new challenges. I worked with incredibly bright colleagues and with bright clients at the top of very big companies. It was well paid. You work indoors, with no manual labour, and nice comfortable offices and technology!

The downsides

The role requires total commitment. You cannot play at it, or dabble in it while also trying to do other things. I often worked long hours because the client’s needs always come first.

The longest I have ever worked in a continuous stretch is to start at about 9 AM, work all through the day, all through the evening, all through the night and all through the following day until about 4 PM when you stagger home feeling brain-dead. I did not do that very often but probably about five times in my career.

Working late into the evening or part of the night and then going home I did much more often.

Accountancy today

I have been talking about professional practice because that was the kind of firm that I worked for all through my career. Professional practice in accountancy today involves both very big firms, known as the Big 4, medium-size firms, and also there are plenty of very small firms like the one that I trained with. I talked about tax because that is what I did. However, the Big 4 have extremely varied businesses covering tax, auditing, management consulting, actuarial work, legal work in many cases, and so on.

I have some figures on the Big 4 with me.

Big 4 firms - summary of 2015 accounts

£'m £'m £'000 £'m
Firm Turnover Profit Profit per partner Highest paid partner Staff headcount Partner headcount Staff per partner ratio
PricewaterhouseCoopers        3,083           818               889                 4.9          19,741               885 22.3
Deloitte        2,827           592               822                 2.8          17,759               721 24.6
Ernst & Young        2,010           455               729                 2.5          12,305               624 19.7
KPMG        1,958           372               623                 2.2          11,652               617 18.9

You can also train as an accountant in industry and commerce, or in the public sector. There are professional bodies specialising in each of these fields.

What you should do if you might be interested in accountancy

Spend some time looking at websites. In particular:

Think about your study choices. I believe that you have already decided upon your A-levels. Think about which university to go to. The principle is very simple. Go to the very best university that you can get into. [In the questions and answers session, I also covered non-graduate routes into accountancy.] The degree subject matters much less. Do what you are interested in. Something which genuinely fascinates you. I used to have a partner who audited insurance companies. His degree subject at Oxford was music.

Build your knowledge about the real world and the business world. My single most important recommendation is to subscribe to “The Economist” which is a weekly newspaper. Look for internships that are relevant.

For a career in accountancy, you must have strong numerical skills but also strong communication skills.

Do things that will give you leadership experience. At school I used to run the chess club under the supervision of one of the teachers.

With that, rather than carrying on talking, let me throw it open for questions.

 

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