The accounting and finance professions map

Five graduates, five branches

AFM graduates end up in a small number of places, and it helps to have the map before the first co-op posting asks you to choose. Follow five graduates of the same class.

Amara joined a mid-sized firm in Waterloo as an audit associate. Her employer is paid a fee by each client, and her work ends in a signed audit opinion on a client's financial statements. That is public accounting — and inside it there are three practices: assurance (audit and review), tax (returns, planning, disputes) and advisory (transactions, restructuring, systems). Amara's firm has all three under one roof; she will rotate.

Ben joined a Cambridge manufacturer as a financial analyst. One employer, a salary, and work that faces inward — budgets, month-end close, costing, the board pack. That is industry, also called corporate finance or management accounting. Ben will never sign an opinion; he prepares the statements Amara's firm opines on.

Chen is an analyst at a bank in Toronto; Dana is at an asset manager, building portfolio models; Elif is on a trading desk. All three are in financial services — banking, asset management and the markets — where the work is about money as the product rather than about a business's own books.

Farah joined a valuation boutique that prices private companies for sales, divorces and shareholder disputes, and does the expert work in litigation. Valuation and consulting is the smallest branch by headcount and the one students most often have never heard of.

Gabriel joined the Office of the Auditor General of Ontario. Government, Crown agencies, hospitals, universities and the CRA all employ accountants; that is the public sector, which spans audit, budgeting and policy.

The figure is the map. SAF's specialisations — names such as Professional Accountant and Financial Markets — steer towards one branch or another, but the map is the thing to hold; the specialisation names move from page to page.

Public versus private: the audit opinion

Every branch employs accountants; only one of them produces an audit opinion. The public accountant (Amara) is paid by fee, must be independent of the client, and signs an opinion that people outside the company — lenders, investors, regulators — rely on. The private or industry accountant (Ben) works for one organisation, is paid a salary, is expected to be objective but not independent of the employer, and produces information the organisation itself uses. The tax return, the budget and the valuation report are all real products — but the return is prepared on either side of the line, the budget is Ben's, and the valuation is Farah's. The opinion is the public accountant's distinctive product, and it is why the next lessons spend time on independence.

Accountant is not bookkeeper

A bookkeeper records transactions — invoices, receipts, payroll — accurately and on time. An accountant interprets, reports, advises and, in public practice, opines. The bookkeeper's work is the accountant's raw material. A designation is not what separates the two roles; the judgment is — although in this country the designation is what signals it, which is L12.2.

Place four titles

Before the questions: tax manager at a firm — public accounting, tax. Controller of a hospital — public sector, industry-style work. Equity research associate — financial services, markets. Litigation support analyst — valuation and consulting. Then draw the map cold.