1st Year Audit Staff (Big 4 Busy Season)
I want to give you a day in the life of a busy season audit staff so that you can see what it could be like at the worse end of the spectrum. Don’t let this scare you away from the profession entirely because these busy periods are not year-round. I can remember hearing the horror stories about working late and thinking about how bored I would be for the whole time but that really isn’t the case. When you’re working late, you’re extremely busy, and time FLIES. You will eat lunch, blink, and it will be time for dinner.
Arrive at the client site and get settled into my audit space. We’re in a conference room, which has a decent size but not big enough for the managers – which is great since they will have to sit somewhere else. We’re not in cubes so there is less privacy, but everyone generally uses a “privacy screen” which makes it so that the screen looks black if you look at it from an angle. It is supposed to be for protecting confidential information, but it is more used for scouring Reddit and stumbleupon every once in a while. Since it is January and we’re really busy, none of that is going on (well maybe while eating dinner).
I scan my list of things to work on and things that we are pending from the client. The items with the most priority are things that need communication or further support from the client – because they can take a while to get us what we need sometimes.
I got some documentation from a sample we selected so I plug in the support into the testwork. An example of a test performed would be the search for unrecorded liabilities. The purpose of the test is to see if they should have accrued a liability before year-end, but didn’t. One way of testing for this is seeing the checks written from the A/P account after year-end and looking at the support. We run a statistical sample using the check # on our in-house software and it returns 10 check numbers. We send these check numbers to the client and ask them for proof of payment (a copy of a check or bank statement showing the transfer) and a copy of the invoice. We inspect the invoice and look to see when services were rendered or the goods shipped (depending on shipping terms) to determine when they should have accrued the liability for accounts payable. If it should have been accrued in the prior year, we look for the detail of what makes up the accounts payable balance and see if it is in there. If it’s not, we have an exception. If the services are rendered after year end then it should have been accrued in the prior year. This test is pretty boring but there are other tests that are a little more “interesting.” The test comes back clean and everything was properly accounted for.
I have to create a new type of document – this sucks because as a first-year your bread and butter is “rolling forward” (which means you take the prior year’s excel/word file, change the dates and plug in the information related to this year’s audit). Since there is a memo that has a new template due to my Big 4 firm having new requirements, I have to actually think. This is going to be a multi-day project so I have this to work on while I wait on the client to get us the support for other tests.
First years or interns will usually pick up lunch if it isn’t as easy to have it delivered. Some teams may go out to lunch or dinner but it depends. I have everyone send me their lunch order, I go get it, and make sure the order is “complete and accurate.” I have been working too late for too long and start to think in auditing terms. The order is 1 meal short, and it’s a manager’s order so I make sure they make it really quick. I’m glad I checked. I actually enjoy going out to get lunch. I can make phone calls, run some errands if I can be quick, and get out of the office for a little bit. I bring back lunch to the office and grub out. I try to eat healthy on the firm’s dime, but when the best part of your day (and the only thing you do outside of work) is eating, it is difficult to get a boring salad.
I have a meeting to go meet with the VP of Credit to discuss the movement in the A/R aging “buckets” (current, 30-60 days late, 60-90 days late, 90+ days late). In this case, a senior went out to the meeting with me but sometimes you can go alone if you’ve met with the client contact before. The purpose of this is to be able to explain the changes from prior periods (usually compared to prior quarter (PQ), and prior year (PY). For example, if in the last quarter, there was only 5% of total AR in the 90+ days aging bucket and now there is 15%, it could mean they are having trouble collecting and may need to increase the bad debt reserves. These conversations can be interesting and informative and a good way to learn about the client and industry. I take notes on the conversation and then document in our paperwork that shows the aging bucket analysis why there was movement.
I get back to work on the memos. I go talk to the manager about a question I have on these because he has dealt with these on another one of his clients and have a good idea of what he wants. The client is giving some pushback on the questions we’re asking them regarding the information we need because they don’t really care about it and feel it is a waste of time. We still need that information, though.
We start to talk about dinner and this process usually kills about 30 minutes of time between coming to an agreement, pitching it to the partner (On this engagement the partner is on site about 50% of the time, which is between average and high), and getting the orders in. I place the orders online, work for a few more minutes, then get some hints that I should go start heading out. I get the food, come back, and by this time just about the only cars at the client’s office are our cars. We eat in the client’s break room so the audit room doesn’t smell like food. We all eat so much we don’t want to move, but know there is a lot of work left for the day. It’s still the beginning of the engagement so we’re mostly in good spirits still. It’s nice to joke around about how crappy a situation is, how the client’s work is really messy, and talk about the partner/manager if they aren’t in the room. As we finish eating the cleaning crew comes through and is disgusted at the amount of boxes and trash the take-out food created. There is an unspoken dislike for the cleaning crews because although they come in at night, they still get out before us. We realize we can’t sit and waste any more time and get back to the audit room.
I start working on the memos again. I’ve gotten one of the memos pretty far, so I send it over to the manager and he brings me in to talk about what needs to be changed and what we have left to do with this project.
One of the seniors gets me to help her with “rolling forward” some documents. This again is the bread and butter of a first year, so I am eager to take on the task. This procedure is an analytical procedure that documents the reason for the changes in the accounts within a certain threshold. For example, if debt increased by 25% since the last year we would document how the company issued debt in which quarter, how much it was, and where to go to find test work over the debt. However, if something like misc expenses only increased by 4% we would leave that alone. I go into the prior year’s audit files, open up the testwork that was done last year and I get to work on updating it. I highlight all numbers and dates in the paperwork and only unhighlight when it has been updated. The spreadsheet is a financial statement comparing current year numbers to prior year-end numbers and current quarter numbers to PQ numbers (Q4 vs Q3). My job is just to update all the numbers and dates. Since the senior has a much better understanding of the client, they will fill in the explanation for the changes. If they don’t know, they will ask the client, but usually, they can look at the paperwork to find the reasons.
The partner and managers say goodnight and go back to the hotel. They say don’t stay too late, but make sure to finish X, Y, and Z, so we can stay on schedule. Ok yeah sure sounds great. Our productivity starts to slide, the joking and trash-talking continue, and inside jokes develop. I finished with the paperwork I was rolling forward so I send it over to the senior. I got some “review notes” during the day I need to work on. A review note is the way people above you leave notes when they are reviewing your work. Sometimes these can be vague and it is frustrating because you don’t have any idea what they want, and they often ask it in question form. For example, “Do you think this is the best way we could have tested this?” It looks like it is all clerical stuff like I forgot a tickmark here, or need to update something or to upload another document somewhere. I finish these up so they can “clear” the notes in the morning.
We leave and go to the hotel rejoicing and disgust at how late it is and how early we have to get up. I get back to the room and take a quick shower. I get in the extremely comfortable hotel bed and attempt to use all 6 of the awesome hotel pillows and fall asleep, only to wake up 6 hours later and do it all again.