Friday, February 20, 2009

Joining the Work Force

So, after finally graduating college, I finally sold my soul to... I mean... joined the work force. Actually, I am very glad to be working right now. With today's economy, I'm lucky to have a great job. I work as Staff 1 Auditor for the Salt Lake City office of Ernst & Young, LLP (EY). Some of you may already know about EY, but for those of you that haven't, here goes.

What is EY?

So, in the world (not just the US, mind you), there are 4 internationally-recognized, public accounting firms: PricewaterhouseCoopers, Deloitte & Touche, KPMG, and EY. These four firms have been dubbed, "The Big 4". Each firm has an office in just about every major city in the world and has a great reputation for integrity and ethics in the accounting practice. So, working for one of these companies (here, I'll just say it)... is a big deal. Working for any of these firms looks great on a resume, and the experiences you getting really learning accounting are incredible.

Each of these firms focuses most of its work on either Auditing or Tax. In addition to these two practices, each firm has elements of consulting, IT auditing, transaction service, etc. But, I work in EY's audit practice.

What is Auditing?

When most of you hear the word "audit", the hair on your neck stands up, and all you can think of is the IRS coming to hunt you down for tax avoidance. Rightfully so. I thought the same thing myself. But, that is not what auditing is in my case.

Think about your policemen. They're kind of annoying when you are breaking the law: speeding, vandalism, etc. Nobody likes policemen when they, themselves, are doing something bad. However, everyone appreciates policement because they protect us from harm. They hunt down the bad guys so to speak. Well, I am a financial policeman, or as one of my colleagues put it, I am a "defender of the capital markets".
Auditing is a necessary evil in the world we live in. If everyone did everything right and made no mistakes (fraud or error), my job wouldn't be that necessary, I'll admit it. But, because we don't live in a perfect world, my job is very necessary.

So, auditors are needed for three reasons:

1. Public Companies

Any company that is listed on a stock exchange (the New York Stock Exchange, Nasdaq, etc), needs to have auditors to report on the company's financial statements. Unfortunately, companies can't just come out and say, "Yeah, we did really well this year. We have 50 million of assets on our books, no debt, and we made eleventy-billion dollars." Why? Well... Enron... Worldcom... you can't just trust the company. Therefore, auditors from a public accounting firm come in and look those financial statements (and all the underlying documentation) and decide if those financial statements are legit or not. So, as investors are trying to decide which companies to invest in, knowing that each company's books are beeing audited by a reputable firm helps provide some comfort that the investment would be a good idea. Therefore, the investors choose to buy or sell shares in the company. Hope that helped.

2. Private Companies

Just as public companies need auditors to look at their books, private companies (not on a stock exchange) do as well. In some cases, private companies are also owned by shareholders, and need an audit for the same purpose as a public company. However, other instances are for banks. Banks lend money to private companies, and want to know that the money borrowed will be repaid. So, if a company's books have been audited, it gives the banks comfort that they will collect the loan and interest.

3. Count ballots at the Oscars or the Miss America pageant.

My Clients

I'm lucky to work on a wide variety of clients.

Public Companies

I work on one public company, which is a construction company. It is a rather large and complex client. It is headquartered in Salt Lake City, with subsidiaries in San Diego, Houston, Detroit, etc. I spend about half of the year on this client.

Private Companies

The rest of my time I spend working smaller, private companies in the insruarnce, venture capital, and pharmaceutical industries.