Earlier this year, I came across an internal secondment opportunity within Transaction Services (TS). If you are not familiar with TS or what they do, I will of course be sharing this information with you. This six-month secondment is not something I went out looking for but it did grab my attention. After hearing more, I decided to take the leap and put myself forward for this Big 4 secondment. This application process involved a director interview and a TS case study. Spoiler alert, I was not successful in the end but I do have a lot I can share with you.
Big 4 Secondment Opportunity
I cannot speak on behalf of all Big 4 firms but I am pretty sure they do all offer internal secondments. If you are unfamiliar with the term, a secondment is a temporary transfer to another service line within the business. As an external audit graduate, secondments are typically offered to those who are assistant managers (between 3-4 years of working at the firm). It becomes more difficult to second as a manager and in all honesty, I am not sure if I have ever heard of a manager being on a secondment. Perhaps it is potentially prohibited but this is something to confirm.
You can either seek out secondment opportunities yourself by speaking to others in the firm, networking, attending talks or in my case with this secondment, the opportunity may be presented to you. One of the graduates in my cohort was one of the few in Transaction Services (TS) and he kindly emailed our intake asking if we were perhaps interested. Following an initial briefing call, I took the leap to apply as I thought the work sounded interesting and would be a great opportunity.
What Do Transaction Services (TS) Do?
I am definitely no expert in this area so I will firstly share with you information that is already out there. I will then go in to add my extra bits of detail I can provide through my own thorough research and what I have been told by those I spoke to who currently work in the role over a variety of industries.
WikiJob gives a pretty basic summary where “a transaction service typically refers to a third-party service provided by a professional services firm when a business transaction takes place”. The most common business transaction where TS tend to get involved is when a merger or acquisition (M&A) is to take place. The third party service (usually Big 4 and other firms) can work for either the buyer and perform buy side due diligence or for the seller and perform vendor due diligence. Other business transactions include management buyouts, IPOs and refinancing.
The simplest way this financial due diligence TS role was explained to me was that any big purchase would tend to have some checks. For example, if you were buying a house, home inspectors are usually involved to ensure the foundations are not crumbling and minimises the risk of any unforeseen issues. Similarly, buying a car a mechanic can be handy or even a medic for a football transfer. The main point is that the review is independent.
The third party service aims to perform due diligence to help the client make an informed decision. You may be wondering why the seller would need help as they want to sell. This work can involve helping the client prepare financial information to help for sale readiness. Vendor due diligence tends to be full scope with a higher liability cap meaning the engagement will typically be longer, lasting 6-8 weeks.
Looking back, I have actually made a LOT of notes (6 pages worth) on TS financial due diligence. This includes the day-to-day role, the importance of the Quality of Earnings (QoE) calculation, how it works and much more. If you are interested in this, perhaps if you have your own interview in Transaction Services for a Big 4 secondment or a graduate role in TS, this PDF will help.
Why I Chose to Apply for this Big 4 Secondment in TS
Typically, many people who apply for secondments are those who are in a rush to leave their current role and a secondment can be a good way to go about it. This is definitely not always the case and it was not my why. I was not looking for a secondment at the time and I do not mind my current role on the whole. Here are a few of the main reasons I chose to apply for the Big 4 Transaction Services secondment:
- TS from an outsider perspective seems to fix the generic pain points of audits. For example, clients genuinely want you there to help them rather that it being a statutory requirement and additional work.
- You can see the direct fruits of your hard work as when a deal is announced, your firm is likely to be credited in the news article. This made the work seem quite exciting and one that does make a difference.
- As you are constantly working on new projects that can initially be spread across different industries, you will inevitably learn a lot.
- I did not want to pass up a great opportunity and I had nothing to lose by applying. If I did the secondment, I could still go back to audit if I wanted to.
Side note: if you are applying to TS as a graduate, the ACA qualification is obtainable through this route.
Given the above information and the 6 page PDF, I clearly did my preparation. I asked questions, reached out to those I already knew in TS by booking calls to gather information as I really wanted to ensure I was as informed as possible. Ryan, if you are reading this, thank you again for your time! You know what they say, fail to prepare, prepare to fail (slightly awkward as I did fail in the end anyway).
I asked questions about both the interview and case study process and asked for any general tips that may help. For the interview specifically, I went about the preparation in the same way I would for any interview. More details can be found here. I would highly recommend reading that blog if you have an interview coming up. It is of course much harder to prepare for an unseen case study.
The interview itself was the first step of the application process. In order to move onto the case study, you do need to pass this initial director and associate director interview. It was not all bad news as I did get very good feedback for my interview!
Given the pandemic, my interview was virtual. I cannot say this made it any less nerve-wracking but after the first few minutes or so it became a much more comfortable conversation. I will not give too much away here but the obvious question as to why I wanted to work in TS came up. I was probably talking for about 3-5 minutes here as my list was much longer than the four points shared above. The full list is shared in the PDF.
The other hint I would give you if you are applying to a role in TS is that an important quality as you progress in the role is the ability to network. You would want to be positioned well where customers may come to you directly for your help in a M&A situation for example. Thankfully I was able to touch on my blog but I would urge you to think about your network and how you think it could help you in the role.
Now onto the case study, my downfall. This was honestly a bad experience from the moment it was meant to start. My laptop was ready to go until five minutes prior to starting, I received the dreaded update pop up. I genuinely have no idea why I thought it would be good to restart but this was my first mistake. This resulted in me being late to the briefing of the case study and delayed my start time. I had emailed off my work phone to minimise the impact of this but I was flustered to say the least. Thankfully, this was not factored into the reason for being unsuccessful.
Case studies are very overwhelming and are a daunting experience. This case study was two hours long from the point of ending the briefing. It would undoubtedly be related to the role so for example, reviewing the pages and pages long sales document that a company would send out to interested buyers. What would be the key risks (seasonality, debt like items, ageing board, etc) and what adjustments would be required to EBITDA (earnings before interest, tax, depreciation and amortisation)? At the end of the two hours, I had to prepare a report style presentation and feedback my findings to a director.
The two hours went extremely quickly and it took me a while to relax from the initial late start. However, I managed to get through to the end although I did have less time for the last part of the requirement that I would have ideally hoped. My presentation was put together on PowerPoint and looked very professional if I do say so myself, with graphs and all sorts. I believe I presented well which is of course very important to demonstrate and on the whole I thought it went decently.
Lessons Learnt and Feedback
As I have very clearly pointed out throughout, I was unsuccessful due to my performance in the case study. Fortunately, I was able to have a detailed feedback session and this was very informative. I prepared my potential weaknesses and discussed these as I wanted to know whether I had identified the key issues. For example, being very in the detail with each point so I found it hard to step back to give the key points. I also knew I had made few points on the last requirement.
It was confirmed that my downfall was a result of the final EBITDA adjustment requirement. I recall that although I did not have much time left, I did struggle on this part of the case study. The director knew I had identified certain risks as I had already mentioned these in the first part but where I was let down was being able to actually pull these through to the final requirement. It came down to linking through the points and being able to demonstrate an understanding. This is an area other applicants were much stronger at.
The EBITDA adjustment is an important part of the TS role as you may be required to calculate this using the quality of earnings (QoE) method depending on your grade. Again, this is explained further in the PDF. If you look past the jargon, this essentially means that I was given the chance to demonstrate I would be good in the role but I was not able to do so. For me, my key takeaway was that in actual fact, I may not have done well in the role and as a result, it was not for me.
Although I was unsuccessful, I hope this blog demonstrates that taking the opportunity was worthwhile. I learnt a lot through the process and I would encourage others to take these leaps, reach out and speak to others in your network. Rejection is natural and should not be unspoken of. It could actually help you figure out the path for you.