|The women wear glasses and have their hair pulled back so you know they’re serious and smart!|
I don’t know if I’ve mentioned before that I had a career as an auditor, primarily internal audit. I’m currently between careers. However, the audit field does interest me … at least so far as I need to continue earning cpe to maintain my CPA. I recently sat through a cpa session concerning the controversy over government-imposed mandatory audit rotation. To the uninitiated, this would mean that companies required to have audited financial statements would have to change their accounting firm once every few years in order to prevent their auditors from becoming too “familiar” with their client. Naturally, almost everybody was opposed to the idea.
One thing that struck me as odd was this particular general complaint:
“They expressed concerns about both the cost of the audit and the cost in management and audit committee time that would be required to bring a new audit firm up to speed so it could perform a high-quality audit.”
I get the thing about costs. It’s the second part that I find vexing. You see, the audit field actually discourages the use of previously gained knowledge for the sake of efficiency. Not in the sense that there are rules against doing such a thing, but in terms of its culture and the way managers train their staff.
First, there’s a thing called “SALY” which is an acronym for Same As Last Year. This is used disparagingly, and every audit senior/manager will be all too eager to correct a staff accountant who dares to use the previous year’s audit work to guide their current testing. Did you refer to last year’s walkthrough to figure out what the key controls were? Tsk tsk. You need to do a new walkthrough because, who knows, the process may have completely changed. Did you conclude something based on knowledge you gained previously? That’s assuming, and it’s very, very bad. You need to go and ask someone a startlingly obvious question you already know the answer to. Nothing you infer could possibly be correct. You need to be told. Even then, there’s always the matter of professional skepticism which means you can’t trust anything you’re told.
So I find it funny that the audit field will insist that mandatory rotation of firms would be bad because it would result in a loss of knowledge when, in practice, audit firms discourage the use of knowledge in the first place.
- Stuff Accountants Like Blog
- The Anonymous Account Blog: Holy Crap, This Really Sucks (this blog post was written six years ago and its comment section is still an active place for accountants to sound off about their frustrations with this career.)