Accounting for a Detoured Economist

Krupo has been on a hot streak over the last few weeks. I know this because I find myself dead tired in my hotel room fighting the urge to write posts in response to his but not able to muster the grey matter to write anything more than jibberish. Good job Krupo.

Update: Have you read a good post on accounting/audit that hasn’t had a comment from Krupo at the bottom? I’m having trouble thinking of one. Where do you get all the free time Krupo?

A few months ago there was an article written about how to recognize a good computer programmer if you are a business manager that has trouble recognizing what makes a good programmer. There are several indicators and counter-indicators that the article lists such as…

Positive Indicators:

Passionate about technology
Programs as a hobby
Will talk your ear off on a technical subject if encouraged
Significant (and often numerous) personal side-projects over the years
Learns new technologies on his/her own
Opinionated about which technologies are better for various usages
Very uncomfortable about the idea of working with a technology he doesn’t believe to be “right”
Clearly smart, can have great conversations on a variety of topics
Started programming long before university/work
Has some hidden “icebergs”, large personal projects under the CV radar
Knowledge of a large variety of unrelated technologies (may not be on CV)

Negative Indicators:

Programming is a day job
Don’t really want to “talk shop”, even when encouraged to
Learns new technologies in company-sponsored courses
Happy to work with whatever technology you’ve picked, “all technologies are good”
Doesn’t seem too smart
Started programming at university
All programming experience is on the CV
Focused mainly on one or two technology stacks (e.g. everything to do with developing a java application), with no experience outside of it

I believe that this list can easily be applied to auditing. Here are a few of the indicator applied to the auditing field.

Passion for Audit (No I am not referring to Grant Thornton)

Good auditor is always passionate about their job. Good auditors would be in investigative careers even if they weren’t being auditors. Good auditors will have a tendency to talk your ear off about some technical detail of what they’re working on (but while clearly believing, sincerely, that what they’re talking about is really worth talking about). Some people might see that as maladapted social skills (which it is), but if you want to recognize a good auditor, this passion for what they’re doing at the expense of social smoothness is a very strong indicator. Can you get this guy to excitedly chat up a audit war-stories or new standards, for a whole half hour, without losing steam? Then you might be onto a winner.

Self-Teaching and Love of Learning

If you’re thinking of hiring someone as a auditor, and he ever utters the words “I can work with that, just send me on a training course for a week and I’ll be good at it”, don’t hire that guy. A good auditor doesn’t need a training course to learn a new standard. In fact, the great auditor will be the one talking your ear off about a new standard that you haven’t even heard of, explaining to you how it will affect the firm and the clients.

Intelligence

Some people assume that lack of social tact and lack of intelligence are the same. Actually, intelligence has several facets, and emotional/social intelligence is only one of them. Good auditors aren’t dumb. Ever! In fact, good auditors are usually amongst the smartest people you know. Many of them will actually have pretty good social skills too. The cliché of the auditor who’s incapable of having a conversation is just that - a cliché.

Formal Qualifications

This is more of a non-indicator than a counter-indicator. The key point to outline here is that formal qualifications don’t mean squat when you’re trying to recognize a good auditor. Although to have much of a career in our field you need to be certified, this is not a sign that the certified individual is even a decent auditor. The only thing they indicate is a certain level of knowledge of a accounting. They’re safeguards that allow recruitment people in large corporations to know “ok, this guy knows tax/standards/GAAP and he’s got a certification to prove it” without having to interview them.

Can you think of any other indicators/counter-indicators of a good auditor?

Well after almost two week off for Christmas/New Year I am taking another week+ of time off to go to Walt Disney World in Florida. Although the slow season sucks when you are trying to achieve billable hours goals….the huge benefit is the amout of time that can be taken off to make up for all of the long hours during the busy season. Have fun…I know I will.

Is this supposed to be some sort of intelligent comment on the status of sexism in the American cpa job market? If it is it went straight over my head. This is not evidence of sexism. It is evidence of a new trend of female domination which will result in a dominant female presence in management in around 20 years as all of those females get their years of experience under their belt and move to positions of management.

PS - I would have just commented in the post, but Telberg’s spam filter software would not recognize that I was typing in the proper image text. Oh well.

Well it has been a while since I have written here. To be frank, it has been a while since I have even come to this site. I have fallen into a rut. Now a rut isn’t always a bad thing…in the short run. Life has consisted of the following….

1. Waking up
2. Playing with my lovely 1.5 year old daughter
3. Going to work
4. Working through lunch (if at all possible, pesky social events often get in the way)
5. Driving home at a devils pace.
6. Playing with my lovely daughter.
7. Dinner, chores, bedtime for Maya
8. Spend time with my wife
9. Watch a little boob-tube to wind down from the day
10. Go to bed
11. Repeat

I used to look forward to blog posts, but ever since I moved to North Carolina the activity has lost its luster. Strange…I am enjoying myself as I write this…but the activity is no longer a draw.

Work has been consuming lately. Going to a new firm is more challenging then I expected. As an ‘experienced hire’ I am expected to know what I am doing, and for the most part that is true. However, there are a plethora of landmines that I walk into daily that slow my productivity down compared to my coworkers (I am at a senior auditor level sniffing a manager position, but being held back by my lack of certification — AHHHHHHHHHHH!). Planning for clients with a risk based approach has proven to be difficult for me. I have been assigned to clients I do not know in industries I am not familiar with. How the hell do I know what the industry and client risks of material misstatements are…I am intelligent and can give a good guess, but I guess the idea of guessing at it seems wrong to me. During the June 30 year ends I was thrown into clients in industries I am familiar with but did not plan and walked into the middle of audits that I was expected to close. Let me tell you what a pain in the ass that was.

On top of all of this I am having to learn a new audit software package, new standards that change audits to a more risk based approach (I was used to a substantive overkill audit method) and a lack of knowing what a GP3 is (that is what my coworkers call the fraud assessment workpapers…even though they are now labeled something else in the audit workpapers). I went from comfortably knowing what I was doing and being the go to guy for questions to being a average auditor that barely treads water most days. A humbling experience, to say the least of the situation.

Also I am starting to feel my age. There is a partner at my firm that is just a year or two older than me. Fuck! It is hard to feel competent when I am not even certified and that guy is pulling in a fat paycheck. Now to be fair to myself he went straight from high school to an accounting degree to a job at a firm with no detours. Whereas I went straight from high school to farting off for years to a community college to two other colleges to an economics and statistics degree path to a PhD in economics to a PhD dropout to a what-the-hell-do-I-do-now career path to finding auditing. But still…fuck! If I was disciplined and had focus and drive from an early age where could I be right now?

Talk about a gut check. I am beginning to find my stride at the new job so the pain of the last six months is subsiding. I am also to the point where I will have enough credits in accounting to take the damn certification test (which means I still have to take MORE college accounting courses-FUCK! [Why can’t I take the test without 30 units of accounting coursework…if I can pass the exam without that bureaucratic obstacle why would I be less then qualified to practice as a CPA?]). I may write more in the near future…Maybe not. RSS me and find out.

Ta-Ta.

In the United States a new set of audit standards are taking effect that are providing guidance to external auditor that may have a dramatic effect on non-SOX audits. The Statement of Audit Standards (SAS) 103 through 112 will force auditors to prove why they assess the risk for an entity (as opposed to just defaulting to high risk and over-auditing each section). Furthermore, the auditors will be required to do more written descriptions that explain control risk for specific accounts and assertions. We will no longer be able to blindly follow audit programs and checklists. The managers will have to delete and add audit steps based on risk and relevant assertions. This is bad news for many auditors that have risen through the ranks in the last few years.

I know of more then a few auditors of all levels that get completely lost when they have to think independently and can’t rely on a standard audit program and last years workpapers. These people will be in trouble if they can’t begin to think independently about the objectives and risks of each individual audit area and assertion. Personally, I get bored stiff following audit steps blindly. I become the most intellectually stimulated and have the most fun when problem popup that cause me to go outside the standard audit steps to prove an assertion that substantially limits the risk of material misstatements. I look forward to the new standards…I wonder how many other feel the same way?

In a few months I will want to strangle myself for saying this…but I want to get out of the office and do some field work. In the past two weeks I have done almost 50 hours of CPE. Yuck! With a lack of billable time from clients, in anticipation of June 30 clients getting info to us soon, I have been banished to the world of CPE time filling.

Since I am the new guy I have had the joy of countless hours of Independence, Revised Audit Standards (especially in GASB land), and all the other crap the firm want me to learn so they can cover their ass if anything ever goes wrong (you know the we had him take 10 hours of CPE on this audit standard so he knew what he was doing was wrong). Needless to say a cash reconciliation is looking mighty interesting at the moment. Board minutes?…anyone have board minutes for me to read?…please!

Well I finally have some free time and thought that there is no better use of free time then to write inane posts on a blog read by a small niche of the small niche of accountants that read blogs to begin with. Hi. My wife, daughter, and I had enough of the San Francisco Bay Area and its $800,000 fixer-0upper starter houses and decided that if we ever wanted a house we had better move to an area in the US that we could afford to buy a starter house.

The search was difficult because we had soo many requirements for a place we would consider moving. After living in Ithaca, New York for a while we knew we didn’t want to live anywhere that had snow for more then a few weeks a year, which cut out more then half of the country. The demographics had to be right, we prefer living in tech savvy towns with educated population demographics, low crime and good schools. Furthermore, salary scales had to be very similar to the Bay Area and housing had to be at least half of the price. With those criteria in mind we narrowed our choices to Raleigh, North Carolina and Austin, Texas…both places I had considered attending graduate school a few years ago.

Since the wife didn’t want to live in Texas North Carolina became the sole entry on the list. So a couple of months ago we flew out so that I could test the job market and we could get a feel for the city. The trip was a raging success. With three job offers in four interviews the job situation looked promising. We decided that living in a suburb of Raleigh (Cary, NC) would be desirable and found a house in one day…made an offer, and as of the end of June we have become proud North Carolinians.

The last box was unpacked yesterday and I can now commute to work without the help of a GPS device so posting will become a bit more regular. I hope all is well with you. TTYL.

My family is moving to the Raleigh area of North Carolina from the San Francisco Bay Area. I have accepted a job as a senior auditor in Raleigh and we are in the final stages of buying a house (inspection, closing escrow, etc.). Needless to say life is traveling at a speed faster than is comfortable for anything but a short period of time.

We are moving to North Carolina due to the substantial increase in quality of life and standard of living we could achieve from the move. An entry level single family home in a half-way decent neighborhood in the bay area hovers around $650,000 while a comparable home in Raleigh is less then $200,000. All the while I actually received an increase in salary to move! Needless to say my wife and I jumped at the chance…Laura’s parents, who currently live a few miles away, are going to need a few months to accept the decision…apparently taking a grandchild thousands of miles away can be a traumatic experience.

We will be driving across country on June 20th and will sign the purchase paperwork on June 27th. So don’t expect many posts for the next month. With packing and all the extraneous chores that come from a cross-country move I anticipate very little free-time to blog, or relax.

I have noticed that many of the audit blogs have been really slow lately. This would be an optimal opportunity for an up and coming blogger to collect readers with demand far exceeding supply. If you want some readers, email me at csilvey@gmail.com and I will post a link and your RSS feed.