From Audit to a Credit Desk

Every commercial credit desk has people on it who came from practice — the Big Four, the mid-tier firms, the suburban practice that did the accounts for half the businesses in town. It is the most common route in outside the graduate programmes, and banks hire this way on purpose. An accountant arrives fluent in financial statements, which is the one thing a desk cannot teach quickly, and often knowing the client base, because the firm's clients and the bank's borrowers are the same businesses seen from two sides of the same set of accounts. The career path names it as one of the best-trodden entries; this page is the whole of that entry — what transfers, what changes, what to unlearn, and which interview you are walking into.

More than most candidates. You can read a set of accounts fast and know how the three statements connect — a desk spends a year teaching a graduate that. You distrust a number until it is supported, which is the whole of quality of earnings before anyone names it. You keep working papers that another person could re-perform, which is what a credit file has to be. You have sat across from owners and their finance managers, met deadlines that did not move, and seen what a business looks like when its accounts are late. And if you came from audit, you have already seen inside more businesses in three years than most bankers see in ten — which is exactly the volume judgment is built from, pointed at a different question.

Everything else on this page follows from that table. Audit looks backward at a period; credit looks forward through a cycle, and the Three Questions a desk asks — will it come back, is the bank paid for the risk, what is the way out — have no audit equivalent. Audit is trained on accrual; a lender reads through accrual to cash, because loans are repaid in cash and profit that the cash never followed is the commonest way a good set of accounts hides a bad borrower. Audit ends in an opinion on someone else's numbers; credit ends in a recommendation with your name on it, on a file that took days rather than weeks, and the owner across the table is evidence rather than a client to be managed.

Auditing the file instead of calling it. The commonest failure, and the one the career path page names: an accountant who finds every issue in a file and recommends nothing has done audit work on a credit desk, and the desk notices. Materiality. Audit trains you to set a threshold and pass what falls below it; a credit read is decided by one number that may be small — a customer concentration, a debtor that stretched, a drawing the owner did not mention. Completeness. An audit file is complete; a credit paper is decisive, and the paper leaves out what does not bear on the decision. “Subject to.” A qualification is not a condition; each condition in a credit paper has to answer a named risk, and a list of things you would like to see is read as a way of not deciding. Trusting the audited accounts. Most of the businesses a commercial desk lends to are not audited; the file is management accounts, a monthly pack and behaviour, and the desk reads the behaviour first.

The credit analyst seat is the usual landing and the one this site is about; whatever your grade in practice, that is where most people start, and a manager's experience shortens the first year rather than skipping it — though some banks bring experienced managers straight into senior analyst or credit manager seats. Three other doors open to the same qualification. The bank's own finance team — the financial accountant, product control, regulatory reporting — hires accountants to do accounting, in a building with heavier technical content than most; that is a different career, not a step toward credit. The credit risk and internal audit seats take accountants for their assurance habits, and credit review — re-reading approved files against the bank's standard — is the seat where an audit background is closest to the work. Relationship management usually comes after a spell in credit, not straight from practice. If you are choosing between the first line and the second, Credit Analyst vs Credit Risk Analyst is the comparison to read first.

The panel assumes your technical floor and spends its time above it. Expect the file question early — here is a borrower, walk me through it — and expect the panel to be listening for the reading order and the call rather than for the issues you can list; the ninety-second walkthrough is the shape it wants. Expect questions built for your background: a client you would not lend to, and why; a time you told a partner or a client something they did not want to hear; the difference, in your own words, between a set of accounts being right and a business being safe to lend to. And expect the trap that catches accountants most: answering like an auditor. A list of findings without a recommendation tells the panel you have not yet made the change of question this page is about. The credit analyst interview page has the round in full, and the quiz scores the temperament the panel is scoring.

Shorter than a graduate's and different in shape. The first quarter on a desk tests whether you can read in the lender's order — what grew and what it is made of, whether the earnings became cash, whether the request matches the need, and only then the way out — and write with the answer first. An accountant already has the statements; what the first ninety days add is the reversal of habit: reading the pack you used to prepare from the other side of the table, learning what a facility's covenants are protecting, and writing the first decline. The accountants who move fastest are the ones who stop asking whether the numbers are right and start asking what they mean for the money.

This site has a reading order built for exactly this crossing — from accounting or audit — which starts with the bank as a machine, moves through one file that gets a yes and its mirror that gets a no, and ends with a whole worked case and the interviewer's read. If you read nothing else first, read Credit Analyst vs Financial Analyst, which is the change of reflex in one page, and then make the call on a file below before you see the senior read.