Choose Finance over Accounting?

Accounting or Finance?

I am sure in the last 5 years (2003-2008), many business students will choose Finance over Accounting. But seriously, 10-15 years ago, it wasn't even the case. Everyone was going to fight for the seats in those Big 8, Big 6, Big 4, now it's down to Big 3 highly-regarded accounting firms. For what? The prestige? The honor? The great compensation? Are you sure you will always uphold all accounting rules, and be the ultimate policeman in the business world?

Forget it. That is just a dream. Bad guys exist because good guys need to work, they need a job. And more importantly, without the bad guys, good guys won't look too good anymore.

I remember once a professor told me a joke:

A small company CEO is trying to look for a person who will be in charged of the firm's financial statement. He got three candidates to choose from. The first one was the best student in engineering school, who obtained 4.4 over 4.0 GPA in the 3.5 years of study. The CEO asked the question, "Can you tell me what 1+1 equals to?" The engineering student answered, "It's 2. It is because ...." And after 15 minutes of detailed explanation using all those super crazy formula he learnt from any engineering courses he took, he tried his best to show the CEO what he knew about the answer. The CEO was very pleased and asked him to wait for his call back later that day.

Then, the CEO is ready to meet with his next person - the best student in the mathematics department. Same question was raised by the CEO, and of course the math student used all kinds of derivatives equations and all sorts of post-PhD materials to show to the CEO why 1+1 equals to 2. The CEO was again very pleased, but still insisted to meet with the last candidate first before making the final decision.

And at last, the CEO met with this accounting major candidate. After he went through this kid's average resume and gone through those lame interview questions, the CEO asked the very question. The kid thought for a while, taking much longer time than his peers/ competitors before, and finally said, "well, what do you want me to tell you?"

The CEO's eyes went wide opened, surprised and yet delighted, and without a second thought, he made an on-the-desk offer to this candidate.

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Of course, what's that mean? Like a lawyer, you learn not to obey the law, but to find ways to "swim" between rules, to catch any fine prints and even turn things upside down, black into white. Accountant is like the same. You find ways to work the way out, to make number looks good - hence, the very simple addition question posted by the CEO, can be a very complicated one that you will be forced to perform in real life. CEO will not just simply ask you to report whatever numbers that should be listed, but instead, he will ask you to report his version of numbers - most of the time are legal; but in some extreme cases, they could be very illegal.

For instance, accounting method changes such as inventory valuation from LIFO to FIFO; accounting depreciation method from straight line to accelerated depreciation; investment asset classification from trading securities to available for sale securities; pension expense and expected discount rate adjustment, and so on. All these can present very different pictures out from the same financial statement.

At the end, before you make a decision to choose between Finance and Accounting, ask yourself: can you survive the pressure your boss is going to give you about doing the "right" thing or doing "his" thing? and lastly, do you really want to be the policeman or the guardian of the most fundamental backbone/ support of business?

There are lots of pressure in either jobs. The more money you make, the more responsibility you are going to have. Just like Spiderman's Uncle Ben said, "With great power, comes with great responsibility..."

There is no right or wrong in this decision, but can or cannot.

Good luck in deciding...