Audit

Bull semen inventory count

You Can Count on Inventory Counts to Be Bad (Again) This Year

So here I am crouched over in front of my laptop on the last Saturday of 2018 when I should be outside on my bike enjoying the unseasonably warm Richmond temps. Why? Well, partially because I convinced Bramwell publishing this post on the weekend rather than on a Friday would be a good idea, but […]

NASCAR Needs Deloitte’s Help

Saw this come across my Twitter timeline the other day: ⚡@NASCAR has hired @Deloitte to audit teams’ finances and create a common accounting platform, per sources. ➖ Teams agreed to the unprecedented step to help find a new competitive balance framework and determine if a budget cap will be introduced. 📰: https://t.co/k3NVwsvQx3 pic.twitter.com/eWUpQW43X6 — Adam […]

Auditor

How Accounting Teams Can Avoid the Year-End Audit Scramble

Webster’s defines the word “scramble” as “to move with urgency or panic.” If you want to see a scramble in action, turn on any college football or NFL game and watch the quarterback try to elude several angry 325-pound defensive linemen. While accounting and finance teams don’t have to worry about large, angry auditors chasing […]

transaction services

Should You Make the Switch to Transaction Services?

I’m not too far removed from Big 4 Audit. I remember what it was like. There were some aspects of it that were appealing: I enjoyed having a mix of projects and clients. I worked with a lot of great people. But the thing is, I knew about three months into my audit career that […]

Assurance Dimensions timesheets auditing

Like Auditing But Hate Timesheets? This Florida Firm Wants You

Ah, the timesheet. Not the CPAs worst enemy, but certainly in the top five. You already know why timesheets are such a pain, but just to torture you a bit, here are the reasons we don’t like them: They’re (ironically?) time-consuming to fill out They punish CPAs who work quickly, regardless of the value of […]

Congratulations, Audit Managers, You Made Glassdoor’s 25 Best Jobs List

We're used to "accountant" making stupid lists from Yahoo on the world's best careers but what about this Glassdoor list of the 25 best jobs that came out today? Glassdoor explains the formula: The Glassdoor Job Score is determined using three key factors – earning potential based on average annual base salary, career opportunities rating […]

Make the Best of Busy Season, You Big Babies

On Monday morning, a new face joined me in the elevator. He donned professional attire and wore a sullen look. “Back to work?” I asked. “Yes and not looking forward to it,” he replied. In contrast, I was in a completely different space. After taking ten days off, I was returning to four weeks of […]

Baker Tilly Hong Kong Won’t Be Picking Up New Audit Clients Any Time Soon

For those of you constantly bellyaching about the pesky regulators and how "close enough" audits are perfectly acceptable, perhaps you should go work for Baker Tilly Hong Kong Limited. You see, that "close enough" mentality appears to have slapped them in the face, based on news from the SEC today: The Securities and Exchange Commission […]

Going Concern Presents: The Worst of Auditing 2014

Another day, another "year in review best of" list. Except this list is actually the "worst of" 2014. It's been an exciting year for auditing. PCAOB inspection rates were some of the worst to date, and then there was that whole thing where an audit partner was banging the Chief Accounting Officer at the client's. […]

Auditors Reminded That If They Keeping Screwing Up, They’ll Be Making the CAQ’s Job a Lot Harder

Auditors, consider this your friendly reminder not to fuck things up this busy season. Just in case you were thinking about blowing off revenue recognition or going concern issues (that's the standard, not this website), the Center for Audit Quality has released a cheat sheet for you. The following considerations should be strongly considered, per […]

Ex-Crazy Eddie CFO’s 10 Tips for Advancing Your Accounting Career

Generally speaking, you can't trust Sam Antar because he's a crook. But when it comes to advice on advancing your accounting career, you can trust these tips. Sam studied under Abe Brilloff at Baruch, graduated in 1980, became a CPA in 1985, worked for Crazy Eddie predecessor auditor Penn Horowitz (which was replaced later by […]

PwC Gives Up a $7 Million Audit Over a $105k Independence Conflict

Remember, kids, to check your independence at the door: Logitech International (LOGI) (SIX: LOGN) (Nasdaq: LOGI) today announced a delay in the filing of its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2014. As previously disclosed, Logitechs Audit Committee, with the assistance of independent advisors, conducted an independent investigation of certain […]

McGladrey Reminds Audit Staff to Stay Billable This Busy Season

McGladrey isn’t just clinging to the billable hour, they’re trying to put a ring on it.

Let’s Watch This Audit Senior Quit His Job in the Most Fabulous Way

If you’re going to go, you might as well go out in style.

KPMG Exec: If the Public Knew How the Audit Sausage Was Made, They’d Appreciate the Taste a Little More

"I can understand why the public at large might feel let down. In hindsight, it is tempting to wonder why auditors were not more alert to a possible financial crisis. If the diligence and expertise that underpin audit reports were more visible, public views of the profession would be far more favorable." – Isabelle Allen, […]

Tired of the Constant Badgering, NQ Mobile Has Fired PwC

Well, if that won't light the rumor mill on fire, I don't know what will. Let's see the press release: NQ Mobile (NYSE: NQ), a leading global provider of mobile Internet services, today announced that it has engaged Marcum Bernstein Pinchuk LLP (MBP) as its independent Registered Public Accountant. The Company's Audit Committee has dismissed […]

The #2 Reason California CPAs are Disciplined by the Board May Surprise You

Forgive me for that Upworthy-esque piece of hit bait excuse for a headline, I almost went it "CPAs Are Getting Disciplined in California; You Won't Believe Why!" so I guess it's not as bad. In the Winter 2014 issue of the California Board of Accountancy Update, the Board takes a quick look at the top […]

All These Years Later, the Fraud Triangle Is Still a Staple

Times may change and fraud schemes may evolve with those changes but for the most part, the root cause and therefore the subsequent behavior of would-be fraudsters generally remains the same. As the Journal of Accountancy wrote way back in 2000: It’s said that accountants’ predecessors were the scribes of ancient Egypt, who kept the […]

What’s a Day in the Life of a Typical Audit Intern?

The New Jersey Society of CPAs has a breakdown of an average day for an audit intern, and by average we mean very average. As in, arrive at the office at 9am and leave promptly at 5pm. Do you remember those days? Let's see: 7:30am: Wake up, eat breakfast and get ready for work.  8:20am: […]

Deloitte Kicks off PCAOB Inspection Season with a Respectable Failure Rate* (by Deloitte Standards)

Oh lookie here, PCAOB inspection reports are out today. We shall gloss over Mantyla McReynolds, LLC and CF & Co., L.L.P, going straight to what we want. Deloitte is first out of the gate for the 2013 inspection season, perhaps due to the fact that 52 audits were inspected and only a measly 15 deemed […]

Per Criminal, PwC is Preferred Audit Firm for Criminals

Our favorite 1980s felon, Sam "The Ham" Antar has given his enthusiastic endorsement to every fraudster's favorite audit firm:   Tip for Fraudsters: Every criminal mastermind loves to hire PwC pic.twitter.com/CeinNT9w1C — Sam E. Antar (@SamAntar) March 28, 2014 Hey Sam, can you grab us one of those Koozies? Thanks, guy!

Accounting Career Conundrums: Is Getting the Boot From the Client a Career Breaker?

There are times in life when we have expertise and wisdom to share. And there other times when we don’t and need to pull in resources to support us. To help out the following worried reader, how about we try out both in this week’s accounting career conundrum?  I'm an S2 at a big4, large-ish […]

One Deloitte Office Wants Staff To Have a Restful Holiday With Friends, Family, and the Client

We're feeling a strong sense of bitterness coming from the tip box today: I'm an audit senior at Deloitte & Touche and wanted to send along this lovely E-mail every Audit staff member [in my office] received this afternoon.  Note that almost everyone has 10-20 learnings due Jan 4th that we were told to book […]

Big 4 Revenue Bigger Than Ever in 2012

The website Big4.com likes to put out an analysis of the Big 4 firms' revenues every year and we're pretty grateful because we sure as hell don't want to do it. That said, it's largely just a press release for all the firms to remind everyone how much they're crushing it. And although Big4.com "believes […]

KPMG’s Audit Business Is Back on Life Support

Last night we finally learned KPMG's revenue results for FY 2012 and they were…UGH. Leave it to my former employer to set me up and allow me to make a prediction that was DOOMED to be wrong. For whatever reason, I thought the House of Klynveld could pull off 8% global revenue growth, what with booming […]

Inexperienced Audit Associate Is Curious What Happens Once Work Starts

What did public accountants do 20 years ago when they had to face a new career on their very first day without the guidance of the entire accounting community on the Internet behind them? This is why partners drink as much as they do nowadays. You're still allowed to drink but instead of heading to […]

Delaware CPA Exam Candidate Isn’t Sure About Audit Hours

Are you a CPA exam candidate desperate for answers with no clue how to find them? Let me do the Googling for you, shoot me a note and I promise I won’t get snippy (my doctor adjusted my dose).

Hello Adrienne,

I do have 99.99% of the education requirements needed to sit for the CPA exam. All but one, I don’t have any auditing credit hours. Am I going to be able to sit for the CPA or should I go back to school and complete this requirement?

Here’s the good news: in some states, you can sit for the exam before you meet all licensure requirements, and in most, that means experience can wait until you have sat for and passed all exam sections. The lengtave to complete these experience requirements varies by state and due to the ever-changing nature of exam requirements, you will want to verify any information I’m about to give you with the state board directly just to be safe. No one’s perfect, especially me. Delaware candidates may contact NASBA’s Delaware coordinator Misun Shin at mshin@nasba.org or (615) 880-4263.

So, once you sit for and pass all four parts of the CPA exam, you’ll need to take the AICPA ethics exam, which you can order directly from them. Don’t trip too hard, it’s self-study meaning open book. AICPA members get it cheaper than non-members so be sure to join first before you buy it.

Assuming you’ve aced those two steps, you can then worry about your experience.

Delaware work experience is based on the degree you hold. If you have a Master’s, you will need 1 year of experience as an employee of a CPA firm or equivalent experience as an accountant in other fields (e.g., government, commerce, industry). Bachelor’s holders must have 2 years of experience and Associates (yes, Delaware allows you to sit for the exam with a 2 year degree) must have 4 years of experience to be licensed to practice as a CPA in that state. You can no longer receive a certificate (non-practicing CPA title) from Delaware as of 2006.

Your other option is to complete your work experience requirement as an owner, principal or employee of a public accounting firm (full-time). Double the numbers above; 2 years for Master’s holders, 4 for Bachelor’s and 8 for an Associate.

Nowhere on the Delaware Board of Accountancy’s site do I see a mention of audit hours.

The Delaware State Society of CPA’s BeaCPA website states:

2 years experience obtained in engagement, resulting in the preparation and issuance of financial statements prepared in accordance with generally accepted accounting principles or other comprehensive bases of accounting as defined in the standards established by the American Institute of Certified Public Accountants

as a requirement for Associate and Bachelor’s holders. Master’s candidates must obtain 1 year experience including any type of service or advice involving the use of accounting, attest, compilation, internal audit, management advisory, financial advisory, tax or consulting skills.

What this says to me is that you don’t actually need audit hours at all unless you plan on doing audits. Delaware would like auditing to be a part of your 21 required accounting units that make up your education requirement but does not require it.

Again, check with the state board just to be 100% sure but it looks like you’re all clear to sit for the exam at this point, no reason to wait until you have the experience.

Good luck and please check in with us to let us know how your exams turn out!

Comp Watch ’11: Deloitte Audit Comp Call Details Are In

Thanks to our tipster who spilled the dirty details just moments ago:

No specific salary increases or bonuses were addressed, as the call was high-level. But here are the approximate levels:

Raise and Bonus Percentages:

3-rated (average) – 7% salary increase, 5% bonus
2-rated (middle) – 8.5% salary increase, 7% bonus
1-rated (highest) – 10% salary increase, 10% bonus

Milestone promotions (senior, manager, senior manager) would be 3 to 5% on top of the salary increases above. No additional bonuses or raises for new managers.

As expected, Deloitte talked a bit about salary multipliers, but not nearly to the extent that PwC did in their presentation. Of note on this front are the fact that experienced audit seniors can expect to earn 1.3x their starting salaries, as opposed to 1.5x at PwC. Also notable is the Deloitte model is “total compensation” (salary + bonus + rewards received), whereas PwC’s structure appears to apply only to salary.

New Audit Associate Details Her First Busy Season Via the McGladrey Blog

Who knew that being able to ask all the questions you want is how you have a good busy season?

Via Success Starts Here, the McGladrey career blog meant to give you “[a] view into what it’s like to work for McGladrey”:

Starting as a new hire in Audit at the beginning of busy season was a little intimidating since not only were the hours lengthy but there was so much to learn. Would I be able to learn and understand things quickly? Were the clients nice? Would my team have the time or patience to sit down and teach me about the Financial Services industry? Those were the questions running through my mind during the first few days of orientation.

As I progressed through busy season, the hours got longer and the work load became heavier. I noticed the more work I was assigned the more questions I would ask. Thankfully, my team was very easy to work with since they were more than happy to take time out of their busy schedules to sit down and walk me through certain audit procedures. Knowing that I was free to ask any of my superiors questions made my first busy season experience that much easier.

The associate goes on to describe a bright spot in her busy season, 20 minutes taken to eat cupcakes sitting outside with the Private Equity gang. “Sitting outside and eating a simple cupcake made a world of a difference for the rest of the day,” she writes. Can you imagine having the kind of job where you appreciate the opportunity to take a cupcake break? Oh wait, I forgot who I’m writing for…

Not to be distracted by memories of that cupcake, Emmy wraps up on a positive note (it is unclear whether or not this is a requirement to post on the Success Starts Here blog) “As busy season came to an end, not only had I learned so many new skills but I also kept thinking to myself ‘It wasn’t that bad.’ Even though the hours are long and the work can be a little tougher in the beginning, working with a great team can make a world of a difference. It reminds me that I’ve made a great choice by choosing to work at McGladrey.”

Conveniently enough, McGladrey has added a jobs tab to its Facebook page if this entices you. All you self-loathing masochists out there know what to do.

CPA Exam Candidate Is Worried About IFRS in AUD

The gmailmen have delivered the following reader question:

Hey Adrienne,

I have already passed BEC back in November 2010, and am sitting for AUD next week. I know with IFRS now being included in the curriculum, I can expect to see a few questions related to IFRS topics. I only have 2009 study materials, so they do not include IFRS.

I know with FAR and REG I will most likely need to either A) Buy new materials or B) borrow another coworker’s, but as far as the AUD test, how much emphasis should I put on studying the IFRS material at this point a week before my exam. I figure a day or 2 to skim through the IFRS stuff should suffice?

Thanks in advance for the advice!

Let’s once again for the 10,000th time consult the CSOs (Content Specification Outlines) for the information we need. When in doubt, this is your go-to for what will be covered on the exam and in what concentrations. While the AICPA doesn’t give exact figures (such as “you’ll get 15 bonds questions per FAR exam”), it is a great tool for figuring out what you can blow off and what you’re going to see a lot of. Hint: no matter what the CSOs say, your particular exam will probably contain an unusually large number of questions on whichever topic you chose not to study.

That being said, the good news is that IFRS has very little relevance in Audit at all (in comparison to FAR, as you pointed out). However, international auditing standards will be tested in AUD, and that part you are going to need to know.

Can you study from outdated AUD materials and still pass? It’s certainly possible. New material only makes up 5 – 10% of the 2011 exam by my estimation (based on the CSOs, my gut feeling and feedback from candidates who have sat for the exam this year), so it’s not all that crazy to suggest that you could do really, really well on old material and still pass. Keep in mind, however, that most people do not do really, really well on any material, new or old.

I would suggest, at a minimum, picking up a used 2011 textbook from Amazon and flipping through the new material. Entire sections have been moved in and out of Audit, meaning you’re going to be missing a huge chunk of it if you’re studying from such outdated material.

Think about it: the exam changes twice a year. So if you have materials from 2009, the exam has changed 4 or 5 times since then, once significantly. Normally this might mean missing a handful of questions but in the case of CBT-e, I suspect the AICPA will be testing larger numbers of new questions going forward as they get more comfortable with the new format.

Good luck!

How Much Harder Is AUD Going to Be in 2011?

Continuing with our previous posts on the 2011 CPA exam for FAR and BEC, we proudly present one heck of an Audit wrap up for those of you planning to take it next year.

Audit, unfortunately, is the one section that I think will be just a tad harder than it is this year but only in one small area. We’ll get to that in a minute.


Simulations – As with FAR and REG, Audit will contain 7 smaller simulation problems next year (called “simlets” or “task-based simulations”) instead of two large simulations. Written communication is gone and placed into BEC. Since AUD was the largest exam time-wise up until now, a half hour will be moved out of Audit and put into BEC. Now 4 1/2 hours, it will be cut down to 4. Since AUD is often one in which candidates run out of time even in 2010, it is all that much more important to learn important time management strategies to assure you do not run out of time.

MCQ – Multiple choice questions will make up 60 – 70% of your score while TBS (task-based simulation) problems will make up the remainder.

Research This is where Audit gets tricky and why I feel it is the only section that will be slightly harder in 2011 than it is now. Currently, research is just a tab buried in simulations and frankly not worth your time unless you have tons left and really love looking through the Code of Professional Conduct (or need something to copy for your written communication, though we would never recommend such a thing).

In 2011, research will be its own TBS with the same weight as other simulation problems (if graded). For FAR and REG this isn’t much of an issue as you only have the ASCs to dig through in FAR and just two sets of code for REG. But for Audit, you have a grand total of TEN different sets of code to search; the Code of Professional Conduct, PCAOB ASs, SASs, SSARS… you get the point. It wouldn’t hurt to try out the new research problems on the AICPA’s website here so you can get an idea of what you are up against. It is very similar to 2010’s research except that it is on its own and actually worth a couple points.

Ethics and Independence – Content-wise, professional ethics and independence are moved out of REG and into AUD (except those that pertain to tax practice, which will continue to be tested in REG) and international audit standards will be peppered in throughout. Planning the engagement will now make up 12 – 16% of problems whereas before it accounted for up to 28% of this section. Internal control is upped to 16 – 20% (from 12 – 18%). Audit procedures will get far less testing than in 2010, going from 32 – 38% of questions to 16 – 20%.

Hope that helps and see you on Tuesday for our last 2011 wrap up, Regulation!

Accounting News Roundup: Improving the External Audit; Another Accounting Firm Bolts Greensboro, NC; AICPA Opposes Nonsigning Tax Preparer Rule | 04.27.10

Weighing the Worth of an External Audit [Compliance Week]
Does the external audit still have value? Some people have questioned that notion. Despite that grave assessment, there are still many that believe that the external audit has value. However, most have no illusions about the challenges before the profession.

Colleen Cunningham has a post up at Compliance Week with her thoughts:

[W]e need a fundamental shift away from the rules and complex accounting standards we currently use in the United States. The move to International Financial Reporting Standards would certainly help. IFRS is based more on principles and concepts, and while some people worry that these are “lesser” standards than U.S. GAAP, I believe that we will see more transparency about choices, options, and assumptions through enhanced disclosure under IFRS…

Perhaps the audit opinion should be less boilerplate to allow the auditors to provide more information and commentary. This could add needed transparency. Unfortunately, the litigious environment in which we operate would make this a risky proposition.

We like these ideas but more information and commentary would mean…more professional judgment! Hopefully the PCAOB would be okay with that idea because the trend seems to be that auditors can’t be trusted to do their jobs.

Dixon Hughes will close GSO site, shift staff to H.P. [Triad Business Journal]
Dixon Hughes is the latest firm to pull up the stakes in Greensboro, North Carolina. What is going on down there?

Jones Soda Announces Change of External Audit Firm [Market Wire]
Organic soda company drops Deloitte. Peterson Sullivan will take it from here.

AICPA Submits Comment Letter on IRS PTIN Proposal [Journal of Accountancy]
The AICAP submitted a letter to the IRS re: the proposed reg that would, among other things, require Preparer Tax Identification Numbers (PTIN) for tax professionals that don’t sign the returns. T

he AICPA isn’t so thrilled with this idea, and the JofA reports some of their thoughts, “(1) a successful implementation of registration and use of PTINs, along with the imposition of Circular 230 on all preparers should be sufficient to address unethical and/or incompetent tax return preparation and provide tremendous gains to tax administration in general; (2) it may cause confusion among taxpayers about the relative qualifications of tax return preparers; and (3) the additional burdens to the tax preparers and pass through of these costs to the taxpaying public should be considered.”

Here’s Your Study Plan for the Audit Section of the CPA Exam

Friendly reminder: >75 is here to answer your CPA Exam questions so send them over.

A reader sends us the following dilemma:

“I took the audit section only and failed, most of it was due to not committing enough time to it. If you have any tips to develop plans I would like any suggestions to creating a plan.”

First of all, no offense but I think you have already identified where you went wrong, are you sure you need our help? Oh well.


Let’s talk about Audit, shall we? The average CPA exam candidate will spend 60 – 90 hours studying for the Audit section – that assumes watching your CPA Review lectures 1 time and spending 2 – 3 hours on MCQ/sim practice problems for each hour of lecture. If you are taking the self-study route, you will obviously need to spend more time on MCQ/sims (about about 2 or 3 hours on top of the 2 – 3 you would be doing if you had videos to review) and create a structured study plan based on the most current CSOs (Content Specification Outlines), which you can always find on cpa-exam.org.

Those of you taking exams in early 2011 will want to be on top of exam changes planned to kick in in the first quarter, though the AICPA has been helpful and already released the CSOs for that period.

If you’ve taken the exam and failed, you already have an incredibly useful tool at your disposal – your score report. The report provided after you fail will compare you to other candidates: IGNORE THOSE NUMBERS. Who cares how you did relative to other candidates? All you need to glean from that information is an idea of where your stronger areas are in comparison to your weaker sections. The score report is broken down by different components of the CSOs for that section so obviously you will want to focus harder on areas that you performed poorly in.

About a week or two before your new exam date, give the entire section a once over just to be sure you are also sharp in areas you did well in the first time.

Schedule your new Audit exam AS SOON AS POSSIBLE as the information is still fresh in your mind. If you have a new exam scheduled in the meantime, reschedule it if you can. Unless you REALLY bombed Audit (68 or below), you will want to jump right back in while it is still floating around in your brain.

As for exam preparation and planning, we’ve covered that plenty of times on Going Concern so check out this, this, and this.