Updated: Oct 22, 2020
For those of you who are wondering what sort of specialty to pursue in accounting - you actually have some options! I think the majority of people associate accounting with audit, which is fair considering it's a big part of accounting. I feel Tax is starting to grow as a practice within public accounting firms. Even when I first started working in 2014, the "Direct to Tax" program had only been running for a couple of years, whereas previously, if you wanted to go into tax, you had to do audit for a couple of years before transferring in to tax.
To back up a little bit, I had initially thought about going into audit when I first started applying for jobs - mainly because I didn't know any better. However, during a networking event, I met someone at a Big 4 who had specialized in tax so I had also asked the question, "Why did you choose Tax?". I still remember the response, because it had became my reason for pursuing Tax.
Tax vs. Audit
Tax has two aspects - it can be retrospective and prospective. Most people associate tax with just doing compliance, or tax returns. This can be seen as retrospective because you prepare tax returns and calculate taxes owing or refunds based on the individuals' or companies' past financial performance. However, in order to calculate taxes, you need to understand tax law, specifically the Income Tax Act, here in Canada. I find that a lot of people in my field are also lawyers, who help their clients with tax planning but also with tax litigation and going to court. The prospective side of the job, and in my opinion, the fun part of tax is tax consulting. In this case, clients will be coming to us for ways to efficiently structure their businesses or position themselves to minimize (not evade) taxes. There are often cases where businesses, that are poorly structured or that don't plan ahead, have a lot of costs flowing out the back. One of the costs you can minimize among others are taxes. By planning ahead and comparing/calculating alternative structures, companies can save thousands to millions of dollars depending on the size of the corporation (ie. you may have read the news about Google and Apple saving billions of taxes using certain tax schemes, but I won't comment on the legitimacy of such structures since it's quite controversial).
Even for individuals, by knowing certain tax rules, you can plan on saving quite a bit on taxes using tools such as RRSPs, first time home buyer benefits, principal residence exemption, life time capital gains exemptions and/or deducting certain allowable expenses against income to reduce tax liability. At the end of the day, the more you understand the tax laws, the more tools you have in your pocket to creatively plan for the ideal tax situation - or even use past proven structures already established that proved to be low risk with the CRA (ie. Canada Revenue Agency).
In addition, tax is further broken down into different specializations such as Corporate Canadian Compliance, US Tax, International Tax, Transfer Pricing, Private Client Services, Mining Tax, Scientific Research and Experimental Development expenditure claims, Technology and Media sector, indirect tax (ie. GST, PST, HST), Customs tax - I mean the list is pretty endless.
For me and as a numbers person, what I found most appealing was the concrete value I can be providing to the clients, such as being able to plan and help save $XX amount in taxes and clients wanting to come to us and pay for such advice.
In comparison, audit focuses on the past. Auditor's main purposes is to verify to some extent that the financial statements are reasonable and reliable for key stakeholders, such as lenders, investors, etc. Most of the work is based on testing certain items on the financial statement, such as Inventory, which you may end up spending all of your time on for the duration of the project. (I have even heard of inventory counts that needed to be performed on New Years' Eve!). For the first few years of your career, you may find a lot of the things you are doing is pretty manual, instead of analyzing and being creative with the work you do. You are also frequently required to be on the client site, which may or may not be ideal for you, based on whether you like traveling to different client sites all the time. Some of these client sites will be different parts of the city you work in, maybe even some hard to reach rural areas, or even a business trip to a different part of the country/abroad. You won't have a set desk space at the office (like tax), but rather need to be mobile with all the equipment you need. Furthermore, I've heard that auditors on site are not the most favoured by clients since they feel that their work is being evaluated and it adds to their work pile.
However, please note, that I've never done a rotation in audit long enough to give you a full picture of what they do. The best way to figure it out for yourself is to meet and talk to people who have walked down the path you potentially want to go and hear their experience for yourself.
Check out my video for more info!