Aug 02, 2022

The False Choice of “Public or Private”

James Caruso, CPABy James J. Caruso, CPA (inactive), CGMA

“Public or private?” All CPAs ask themselves this question at some point; often it's when seeking their first job or when they’re ready to move on after a few years in an entry-level position. While most of us have asked it, it is the wrong question to ask. It is a false choice that may bias your evaluation of the opportunities before you or divert you from considering the full range of available career options.  

There are endless questions to consider when evaluating a career path, and just about all of them are more relevant than “Is the job at a CPA firm or is it in private accounting?” The term “private accounting” is a common catch-all for “anything other than public accounting.” It encompasses so many different types of organizations, work environments, and roles that it is simply not meaningful to view them as a homogenous group when making a comparison to public accounting. Any CPA who is eager to “get out of public” should keep in mind that while many private accounting opportunities may compare favorably to those in public accounting, many others do not.  

A collection of numerous question marksPrivate accounting encompasses many different types of organization, each with its own unique considerations. In a family-owned or closely held business, you may find an environment characterized by a lack of appreciation for the value of accounting and finance, where nepotism abounds and prevents you from becoming part of the inner circle. In a publicly traded company, you generally won’t find these problems since compliance demands elevate the profile and sophistication of the accounting and financial reporting function. These are usually larger companies that offer interesting career paths. The downside, however, is that Securities and Exchange Commission (SEC) reporting deadlines could result in hours just as long as those you might be seeking to put behind you in leaving public accounting.  

Opportunities in publicly traded companies can be further categorized into divisional roles versus corporate roles. Depending upon the size of the division, there may be less upward or lateral mobility than in the corporate office, and you may not get exposure to functions generally managed at the corporate level, such as tax, treasury, or other shared services. Start-ups and venture-capital backed, early-stage companies can be exciting and dynamic places to work, allowing you to wear multiple hats, some outside finance and accounting. Companies in this category span a wide spectrum of size and stage – as well as viability. Private equity-backed businesses can combine the positive attributes of publicly-traded companies (i.e., the need for a strong finance function) without the rigid Sarbanes-Oxley or SEC reporting demands. However, these are generally middle market companies, where challenges may include high leverage, tight budgets, and limited prospects for promotion. Not-for-profit opportunities are often grouped under “private accounting,” despite being a unique form of organization with its own peculiar dynamics.

Public accounting firms also span a spectrum, differentiated not so much by type but by size, array of services, industry concentration, etc. Similar to private accounting environments, this variety should suppress the tendency to put them into a uniform group when making a career decision. There are also other types of consulting and professional services firms that are not focused on accounting and assurance.  

As you can see, deciding what type of organization is right for you is much more complex than whether or not it is public or private. And I haven’t even touched on the many other considerations. There are numerous organizational attributes to consider, including purpose, values, culture, strategy, stage, financial health, and viability. And you absolutely must consider the characteristics of the role itself: the nature of the work and its technical domain; potential for learning and development; whether it is a specialized or generalist role; remote work policy; work/life balance; among others. The central point is that most of the attributes that make a position desirable or undesirable are independent of whether the position is in public accounting or private accounting. This is true of the nature of the work itself: while assurance work may be unique to CPA firms, you can find tax, financial analysis, internal audit, or M&A-related opportunities in both public accounting and private accounting environments. You can even do traditional controller or CFO work in a public accounting firm as outsourced accounting and interim management services become more common.  

Whether the role is in public accounting or private accounting should never be the first or overarching question. You will be doing yourself a disservice. The public versus private canard is an oversimplification of your career path options. Instead, evaluate the attributes of each individual organization and opportunity on its own merits, relative to your own interests and goals.

James J. Caruso, CPA (inactive), CGMA, is CFO of Knipper Health in Somerset, N.J., and a member of the Pennsylvania CPA Journal Editorial Board. He can be reached at james.caruso@knipper.com.

Sign up for weekly professional and technical updates from PICPA's blogs, podcasts, and discussion board topics by completing this form.


Leave a comment
  • James Caruso | Aug 05, 2022
    Mike, thank you for reading and for your comment. Your point is well-taken and I do not disagree. My intent was to point out the potential pitfalls that job candidates need to be aware of and look out for in each type of private accounting opportunity, especially those who are so anxious to escape public accounting that they fail to realize not all private opportunities are created equal, or automatically superior to public... But I definitely do not want to imply that every family-owned business would have these particular negatives.
  • Mike De Stefano | Aug 05, 2022

    Interesting look at the view on career choices for career options in accounting to help others when at the fork in the road as to which path to take.  In my experience, the quick dismissal of private accounting in the form of a family held business is a very narrow and incorrect view of the impact one can have working for this type of entity.  

    The idea that this career choice would solely be characterized by a lack of appreciation and blocked by nepotism is not an accurate depiction of what an accountant/financial profession would experience.  While there can be elements of this in some companies, the vast majority allow for input from a CPA professional that brings financial expertise into the organization that is very much needed along with the discipline to guide the entity through controls, compliance and have an impact on all facets of the business.  I thought it only fair to point out and/expand on the description of the impact a CPA can have on this business as the majority would not fit into the categorized description provided in working for a family owned business.

  • James Caruso | Aug 04, 2022
    Diane, Michael and Rick, Thank you for reading, I appreciate your comments! Diane, you're right, it seems that the default option everyone is pushed to out of school is public accounting, and then people can't wait to get out and go to private. Instead, private may be the best fit coming right out of school. Conversely, public could be an option even *after* having spent a number of years in private - not a typical path, but it's one that I've taken (and then went back to private again!) The main point, as you said Michael, is there are so many varied opportunities in the profession!
  • Diane Heyde | Aug 03, 2022
    Excellent article, James. One of the attributes of accounting is the variety of opportunities available across sectors. University professors often come out of the big accounting firms which fund colleges and push students in this direction. Anyone with experience hiring knows that interest and fit are critical to successful hiring. Professors need to stop pushing an agenda. 
  • Michael Gregory | Aug 03, 2022
    Great article and so true! This is the type of information we need to get out there for young professionals and students to get excited about the profession. The CPA route has opened so many doors for me.
  • Rick Stiebritz | Aug 03, 2022
    great article, thought provoking. 

    Leave a comment

    Follow @PaCPAs on Twitter
    PICPA Staff Contributors
    Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.