Sunday, June 21, 2015

How do I view auditors now?

When I was in Public, I always noticed that the toughest ones to deal with where the individuals with Big 4 experience - they thought they knew everything and so decided to tell us how audits should really be done and what we really need to get it done - i.e. a lot of what we were asking was superfluous.

When I first started - I certainly felt more sympathy towards the auditors than the rest of my group, and was very nice to them, helping them along the way. Now, I've switched gears -and I am now the kind of person who tells the auditors what they don't really need and that it's a waste of time. I'm well aware of this switch - and I can't help it. For the most part, auditor questions don't really add value (was aware of this on the other side too) so I don't really care much for it and either ask them to go to someone else or tell them why it's irrelevant. You sometimes expose the auditors too - by challenging them on why they need certain things. If it's the usual "because we received it last year" or "it's in our procedures", we tend to go after them so they don't repeat this again. There's always 1-2 people on every audit team that knows what they're doing, and those are the individuals who add value - since they can help you conclude on an accounting issue.

Where do I stand now? I don't really like wasting time dealing with them, but when I get requests/questions, I'm happy to give them what they need to get them to their conclusions - even if it's a painful request, with the caveat being that I understand why they need it. If I don't believe it's necessary, then I'm in the mood for an argument as long as it saves me time on the back-end. I do believe that there is some value to audit - I just don't want to be wasting my time on the non value-add part.

Life on the other side

There were a significant number of positive responses w/ re: to blogging on how it is on the other side after a long stint in Public - so I'm going to try and blog once in a while. I had a lot to talk about during my senior associate years, but it has since dwindled. So I wouldn't expect to be logging in significant blogging time.

The biggest change is that you move from a revenue center to a cost center - and for those that started directly in Public, you don't really notice some of the benefits of being in a revenue center as opposed to a cost center. In Public, we are the revenue-generating assets. Without us, the Firms do not make any money. We effectively ran the Firms (well - the partners and senior leadership did, but they were all accountants and know what it's like). In Private, our only representative in the strategy team is usually the CFO. Even then though - the interests of the Accounting group doesn't play much of a role - we're just in charge of figuring out how the numbers should look based on performances from other groups. For example, software is run by engineers who design and update this software (with a sales team trying to sell this software - but they wouldn't exist without the engineers). Financial services is run by the bankers (the "deal" makers), and on it goes. The only real revenue-generating accountants are the ones in Public, the ones who've set up their own CPA firms, and the various tax groups that help figure out how to file/minimize taxes for a fee.

 So what does all of this mean? Strategic decisions for the Firms are made without much regard to the Accounting Groups - we're just G&A, we're no longer operating expenses. So when we reach out to the revenue generators with questions (since we need to account for all their decisions), they effectively look at us as "accountants" - a cost center, a nagging and bothersome but necessary evil. Thankfully, I'm at a Company that's been doing a great job at making sure the other groups understand why our group is important -but I know this isn't the case at various companies.

One can ask - what's the difference - our clients in Public also looked at us as a necessary evil who they hated dealing with. Well that's true, except we would still get a lot of what we wanted at the end of the day, we just had to deal with more difficult personalities since they openly didn't like us. And the clients also needed our blessing to issue financials, so at the end of the day, we got what we wanted. We could force the Companies to implement change too - always had that in our hands.
In private - not so much, unless you're the CFO.



Sunday, April 12, 2015

Pivot

So I quit.

After years of anguish, ups and downs, various emotions, I decided to move on. 

As if it wasn't obvious already, I never liked this job. I still made sure I was really good at it though - made sure my teams liked me, the clients liked me and that the audit was a quality audit. I went back and forth on it for years. I even started blogging as a form of therapy years ago so I could vent about some of the absurdities of this job. I struggled because I was debating whether it was worth it to become an Audit Partner - were these short term pains all worth it for the long term gains. So I stayed and kept plugging away, working my way up the ladder. Then, as the industry changed, the work became more and more unbearable. The client service went away, and our work became more fear-based. The auditors were doing audits to present a product to their auditors (the PCAOB). While some saw this going away, I didn't. I tried to visualize myself as a Partner going through this, and I just couldn't. I started to value happiness more over money. I spoke to several partners during this time, and heard their cases to convince me to stay. I spoke to several other individuals who left the audit firm - the one thing they all shared was that they were happy they made the move.

To some, it may have been just a matter of time before I quit, but there was a period when I genuinely believed that in spite of the job itself, the holy grail (partnership) would be worth it. This kept me going. I couldn't do it anymore. 

I have more to say here, but I have to go. One thing though - I'm considering pivoting to write about working in private and dealing with the auditors - let me know if this is something you'd be interested in. If that is the case, I'll keep this blog alive. Otherwise - it's been a fun ride...


Sunday, October 5, 2014

9-5?

Sorry for the delay, losing the energy for this blog, I may give in soon.


Hey I'm curious what are the hours typically like during non busy season. Obviously busy season is brutal but do you ever get to work a mon-friday 9-5?


9-5 in the big 4 is dead for the foreseeable future. Under the PCAOB era and the  shift in focus to be more on the regulators that the clients, the amount of work we do is borderline insane. The current model as it stands is definitely being stress tested. The attrition level is back to high rates. But I digress...in the past (before I started, the summer hours were true summer hours). Now it's the time to bolster walkthroughs and control testing for 404 purposes, since the PCAOB is now focusing on 404 just as much as the financial statement audits.





Saturday, July 26, 2014

insider trading

Reading an article on insider trading now made me think of the unfettered access that we as auditors have to financial information before the press release is out. And it's not just us, it's the clients we audit too. Outside of certain companies, most public companies don't exactly have the best control over their financial reporting; so individuals can get access prior to the public release if they wanted. While the audit firms do a great job of stressing independence, can't help but think of the bad apples who are getting away w/ leveraging such information for personal use. Yes, the Firms can audit your stock accounts but you can always give it a friend of yours who invests in stocks. Feel like that environment is way too lax, and I can see it changing once an auditor gets caught in a high-profile case.

Sunday, July 20, 2014

bad performance rating

I work at a big 4 and i got a rating of 4! I am pissed off and want to leave the firm! I worked really hard during the busy season and i feel like my work wasnt recognised and appreciated at all. I am on my way of completing the ACCA ( 1 more exam left) and i have 2 years of work experience. I am only thinking to stay there one more year in order to qualify and then leave. Even if I stay will I have any progression there with my career? Or the rate 4 will always be there like a ghost in my performance review background to hunt me? 


You can always bounce back, and get a better rating the next year. Reputation will unfortunately spread throughout the Firm, and people will politic to get you on their teams or get you off their teams. Before people add you to their teams, they will ask around to get your rating. It sucks because the only time you come in there with a blank slate is your first day there. So work hard, and get a better rating the next year, or if your rating still stays the same, it's just not the right industry for you. And there's nothing wrong with that, it's not exactly the industry of people's dreams.

blackout list big 4

I would like to understand whether auditors can actually make investments of their own? especially index investing, would it compromise on their independence or ethical issue (if any)? 


We can; but every Firm has a blackout list - of pubic companies that you can't invest in. These are companies they either audit or are looking to pursue. As a big 4 auditor, you are essentially precluded from investing in about 25% of public companies in the US. There are still about 75% you can invest in, that's a pretty big %. This blackout list can be accessed using your respective intranets. As a partner, you get audited a lot, but if you are below that, you may not get audited but you can. I would play it safe, only invest in stocks you are allowed to, find out whether you can invest before you invest in it. It's not worth losing your license over it, even if you don't have any inside information.