A Counting School - Hardcore Chartered Accountancy

Don't audit late into the night

If you stay up late to finish work, you may just get it done. But at what price?

You turn into some sort of 24 hour automaton.

Remember how to stop and relax, then do it.

One of the things I enjoy about my job is the flexible work schedule. Coming from a student journalism background, I'm well versed in the joy and pain of pulling an all-nighter to get things done once in a while.

The risk, of course, is that you'll wake up. Sort of. You'll be groggy, and you'll hit snooze and pass out for another hour. And whoever tried to wake you up will hear you muttering about what you were doing when you were awake. Like searching for super users in the application you were testing.

I wouldn't have thought of sharing this thought, since it's not all that interesting to me, except for the pure comedy of finding out you were spewing out jargon while asleep, until I read Dennis' points about the joys of blogging about the German ERP. And you'll know you had to be babbling jargon if the person waking you up almost thinks you're speaking a foreign language. And in this case, you just might as well have been, if you're using the software's original terminology.

Diving into new and exciting hidden corners SAP is some sort of never ending adventure. As with most facets of AuditLife, the moment you master one challenge, you're handed something brand new and increasingly more difficult. And if you really want to just "get it done," you might not necessarily want to call it a day at 5 pm. Or 9 pm.

Having pointed out that questionable habit, I checked my timesheets from last year and noticed I had even worse weeks, in terms of workload - so the fact that I'm balancing my workload slightly better is cause for celebration.

Now, to avoid working late into the night and turning into an IT audit zombie.

Shocker: CA firm lays off staff immediately after the 2009 UFE

My dear readers have reported experiencing something horrible: layoffs immediately after the UFE!

Although it's one thing to decide, "we have too many young staff, let's tell some of them not to come into the office on Monday", saying, "well, let's get it over with quickly and call them to the office immedately after they have finished their 13 hour exam."

Seriously - calling someone in on a Thursday afternoon to tell them they're being let go? Is that someone's idea of a sick joke?

It's marginally better than doing it before the exam itself - that's a cardinal sin which I decry even more loudly, since it throws people off their game for preparing for the exam - but you would think that firms would realize that, "hey, we're doing campus recruiting right now."

What does that mean?

It means that students across Canada and in other parts of the world are currently applying to work for accounting firms. If students find out that you have an itchy trigger finger when it comes to firing people, and they're deciding between working for you and your competitor, where do you think they're going to end up working?

If all the best candidates run for the hills instead of choosing you, will that not perhaps harm you over time as you're unable to grow the strongest talent in-house?

I'm baffled, mystified and angry about this - not necessarily in that order.

Americans, I find are typically in a funny position and advice for them is different since they don't necessarily write their CPA exam immediately, but keeping in mind the US-centric nature of the advice here, this article is also worth reading for additional tips on what to do.

From what I've heard the money situation is tight, but not as bad as what Francine comments on - but make sure you read her words carefully.

Don't let your firm take back any money they gave you for passed exams or study materials or days off. Tell them you'll file a claim with your (province or) state's Labor Department: Wage and Hour Compliance Enforcement. If you were let go for anything other than "cause" (which means you seriously breached policies or did something illegal,) you deserve every penny you have already been paid or promised even if cut for "performance."

There's a tradition in many firms to go out and celebrate the night after the exam is complete - simply for 'surviving.' How perverse to not actually allow people to 'survive.'

More than one office was affected and people are no doubt mulling their severance options and contemplating contacting employment laywers as I write this so out of respect for these peoples' difficult situation I won't be naming names, but you can always write to me if you're suffering for advice and other guidance. Click the contact link above or just e-mail my gmail account. You'll find my address is acsblog. Or if you have comments, you can always leave them here too.

Challenging job interview questions: what's your worst quality or biggest weakness?

 Reading the adventures of new recruits on myCAsite reminded me of Homer's job search:

   Smithers: What would each of you say is your worst quality?
   Man 1:    Well, I <am> a workaholic.
   Man 2:    I push myself too hard.
   Homer:    Well, it takes me a long time to learn anything,
             I'm kind of a goof-off...

I love those quotes, but how about something useful?

"I have no fear of fire" is only a good interview response to a limited range of career options. Is audit one of them? Sometimes.

Something to keep in mind is that most of the major firms use behavioural interview questions.

 A quick search will reveal sample lists - the link above is one good example, apparently used by the State of Kansas in their interviews.

From that same post, you'll read someone's comment which shows how to fail at these interviews: "dude plz post the answers to all these questions if possible."

Fail.

The thing about these interviews is that there is no single "correct" set of answers because they're designed to get a customized answer from the respondent.

So I could answer those questions to mess with people, but that's all I would accomplish: my answer to some questions as a student would reference my experiences at campus newspapers, a current interview would reference my more recent audit experiences. Because just saying, "I dealt with an issue" is empty. You'll be probed with follow-up questions to get specific details about your experiences. You can't do that by copying someone else's answers. You have to describe your own life experience. The alternative would be making up a giant fake past about yourself, but how exactly would you expect that to transform into a successful long-term career?

That would simply land you back in a position like that of Homer and his ill-fated job search:

Marge goes through the bills, and Homer says he didn't get the job.
(``They wanted someone good.'') Marge invites Homer to feel the
baby kicking.

Homer: [to his unborn son] Kid, I won't let you down.
I swear to you, when you come out of there, the first
thing you're gonna see is a man with a good job.
Patty: Yeah, a doctor!
-- ``I Married Marge''

Homer tries various jobs, but screws up all of them. First, he
works at Ye Olde Candlemaker Shoppe in Olde Springfield Towne. Then
selling knives door-to-door for Slash-Co Knives.

Homer: Good evening, Madam. You have been selected by the good people of
Slash-Co to reap the benefits of their new Nev-R-Dull knife edge.
Here, shake hands with the Slash-Co! [hands her the knife]
Woman: [grabs the wrong end] Aaaaaagh!
Homer: [to himself] Handle first, handle first...
-- Homer's job experience, ``I Married Marge''

He then works at the Pitiless Pup Attack Dog School, but not for long.
Next, he attends a `Million$ for Nothing' seminar.

First, let me assure you that this is not one of those shady pyramid
schemes you've been hearing about. No sir. Our model is the trapezoid!
-- Shady seminar speaker at `Million$ for Nothing', ``I Married Marge''

The speaker hears a siren outside and leaps out the window (through
the glass) in panic.

"Anglo" Release date for 2009 UFE results: December 4

I've noticed people are wondering when marks are coming out for the UFE's 2009 sitting.

Yes, I vowed not to make any more comments on the exam yesterday, but left some exceptions. One of them would be people coming up to me and asking question, and I'll count "people landing on my site looking for answers" as an invitation to comment.

So to answer your question, in case you don't have access to your firm's UFE timeline calendar or didn't find the ICAO page - and you chose to stop reading the entirety of my article's headline - marks will be posted online Friday, December 4, 2009.

Edit: I forgot to mention when posting this originally, that the lucky ducks in Quebec find out the night before, on Thursday December 3.

Avoid post-exam anxiety by indulging in your local community's colourful fall street festivals.

To reward you for reading so far down, I'll answer some common questions about the process.

Are the marks always released on a Friday? Yes. (Unless you're in Quebec, as noted above.)

Will I get confirmation in the mail? Yes, usually the following week, and no, I don't they've ever screwed up by announcing one thing and mailing something else.

Do you still have the letter saying you passed? Yes, it's sitting in a box in my room. I stumbled upon it yesterday while cleaning things up.

What did people do before the internet made things so insta-magic? They had to go out early in the morning and buy the newspaper.

Seriously, trudging through early winter snowfalls in the dark. I've heard very touching and emotional stories of people standing under lamplight, scanning through the pages, eagerly searching for their name.

And of course jumping for joy, heading home, with loved ones seeing the look of joy on their faces, knowing that they had passed.

For the next two and a half months not thinking about the exam is crucial, but I guess it doesn't hurt to share the happy stories. There's a lot of intense emotion driven into the exam, considering people start thinking about it early on in university, weigh whether or not they want to get their CA simply on the fact that they'll have to go through this process down the road, and their professional career, well doesn't depend on passing, but will definitely be enabled by doing well.

With all that in mind it should come as no surprise that people take this so seriously.

2009's UFE: More freak-outs than ever

Word has reached me that on day one of the 2009 UFE, one writer, presumably in Quebec, had enough - and left the room after about an hour into the "comp" - the 5 hour comprehensive first day case of the three day exam.

I know of no other facts aside from the fact that it presumably looks like someone cracked under the stress of the, in total, thirteen hour exam.

If you're new here, I'm talking about the Uniform Final Evaulation - the Canadian Chartered Accountants' final professional exam, not some fitness competition. Although there's definitely some sort of mental fitness you need to possess to survive the exam's sick game.

Stress management takes many forms of awesome. Pictured: a relaxed survivor

Hopefully everyone who wrote the exam and who cares so much about it that they're reading the entries here passed. You'd have to ace the second two days exams' to have a chance at passing if you ran out of the first day's exam. And unless there's some sort of medical waiver permitted, I doubt that distressed writer will catch a break.

It's disturbing to point it out, but Densmore has already reset the UFE clock on his website, it reads 362 days until the 2010 exam. Wow.

At least I can safely recommend those services to the unfortunate first day comp refugee - it'll probably come in handy to avoid a repeat of that action next year.

And this concludes my UFE commentary for 2009, until either someone shares a copy of their question pack with me, or until the marks come out - whichever comes first.

Scratch that, if you just wrote the last thing you want to do is talk or think about it. You may think you do, but you really don't. Put it out of your mind, and focus and working like mad, or taking a a post-UFE vacation if you were fortunate enough to be able to take one.

I'll listen to anyone who wants to vent, but as one of my colleagues sagely pointed out - it's best not to broach the subject of the exam with a writer until they find out they've passed - two and a half months from now.

It's just more relaxing that way.

Checking out San Francisco's public art with esteemed local guides - also relaxing.

The 2009 UFE: more IFRS-y than ever

Across Canada a few thousand students are now sitting down to day 1 of the 2009 UFE. It's not going to have as much IFRS content as the 2010 exam, but compared to prior years, where good old GAAP was the only thing for which they had to furiously thrash out responses, it's something new.

Good luck.

IFRS: the three-wheeled motorcycle of accounting standards?

"MyCASite" rolls out

Another site is rolling out to add help create some sort of constellation of places for CA orbits to begin flying around - myCAsite.com.

This is one of those cases where I actually know the creator - we went to university together - but there's really nothing like it out there. Aside from the message board, which is humming with posts, there's a series of articles on becoming a CA student, and how to cope with the challenges encountered on the job, including plain English summaries of key CICA handbook sections.

It's always fun to watch the development of a site from a small germ of an idea to a fledgling showcase and ultimately a full-blown star. Here's your chance to get in at the ground floor. I'll be posting on the boards occasionally too as Krupo so feel free to wander in.

Watching the accounting kids flail about is almost as fun as watching the Air Show from the roof of the Palais Royale or out on Lake Ontario. Almost. But with less risk of sunburn.

Studying for the UFE isn't all smiles and sunshine

After a certain point, all the studying in the world will lead you to burn out.

But before you burn out, you'll simply get fed up with the ridiculous demands the exam places upon you.

Go and cheer up Jaycee who is hitting one of those walls you run into during UFE prep time.

Running into the wall, getting a birdcage in the chest. Either is painful to experience.

You'll get over it - but it's good to vent and share the experience, as it's actually one of the best ways to let out the nerd-rage that builds up while studying for the UFE.

That, and yelling at your exam paper, or the fictional idiots you're advising.

In real life the business people you help have problems, but they don't engage in cartoonish super-villainy. Sometimes on the UFE you'll find just such an example. If you see people plotting a nefarious scheme to destroy their coffee franchisees using ethically questionable methods, you're supposed to call them on that!

I had fun marking up my exam question paper with my angry responses to the fools I had caught in their act of malfeasance.

Note of course that you don't hand in your question paper, you only hand in your "answer paper" which, as of 2009, is apparently only a USB stick.

It's interesting to note that handwriting your exam is now being killed as an option. An logical considering it's a silly approach to take unless you're the world's worst typist.

Now that the trivia is out of way, go cheer up Jaycee!

Getting mauled by a lion: surely there's an allegory about Big 4 life

Thanks Videosift, you always brighten my day.

I'll let you come up with your own story for how this compares to the adventure in AuditLand so many young people go through, hopefully with less claw marks. I nominate Neil to give it a first shot, considering he's now technically in the allegorical doctor's office stage of the video.

It's been ages since I posted a video here just for fun, so let's do two while we're at it. This hits the "Learning from Mistakes" category: avoid walking behind horses, especially if you're an idiot.

What did the Livent fraud teach us about IT audits, frauds, and financial audits in general?

Livent was a Canadian theatre company which imploded in a massive accounting scandal in the 1990's which we learned about in university as a case study in how not to do several things on an audit.

The people involved are heading off to prison, at the end of a lengthy and drawn out legal proceeding, but that's okay because I only now noticed this article in Canadian Business shed some light on the IT side of things.

During one audit in 1996, computer experts from Deloitte & Touche – the accounting firm that audited Livent’s financial statements – spent at least 28 hours evaluating the company’s information systems, but failed to detect the changes, the court heard. Any inquiries from the auditors about changes were referred to Eckstein, Cheong said. A Deloitte report on Livent’s computer systems, however, noted the company’s lack of data security and warned: “The lack of sufficient logical security may result in unauthorized access to programs or data.”

What this article doesn't explain is that 28 hours is nothing on a job that big - simply judging from the size of the loss that ensued in the scandal. The number of hours spent and the conclusion point to one fact: the Deloitte IT auditors no doubt correctly identified the IT system as an unreliable black hole which should not be trusted.

I'm reading heavily between the lines to say this, since there's no mention regarding whether Deloitte discussed the problems inherent in how edits to Livent's financial software were made, but these edits allowed the accounting staff to quickly override the normal "accounting controls" that are present in a standard accounting program to prevent frauds half a billion dollar fiasco.

But if you have a company of any respectable size, 28 hours represents, at most, three full days of work.

A likely interpretation of "A life in the day of Deloitte's IT auditor at Livent" is as follows:

• 7 a.m. - Wake up
• 8 a.m. - Finish breakfast, head to Livent's offices
• 9 a.m. - Arrive at reception, announce arrival for 9 a.m. meeting, have a seat.
  
• 10 a.m. - Ask receptionist if client contact is in the office. Find out they're "in a meeting" but will see you shortly.
• 11 a.m. - Client contact comes out, after having been yelled at by accounting department for not introducing additional changes to hide massive fraud fast enough.
• 11:05 a.m. - Client contact meets with you in office, go over list of data requests needed to do audit.
• Noon - Lunch
• 1 p.m. - Obtain settings from the Lawson accounting software
• 1:02 p.m. - Note that critical systems are unlocked and can be manipulated at will
• 1:03 p.m. - Grit teeth.
• 1:04 p.m. - Realize the two-week-long job is going to be a lot easier, since you can go home today and announce a complete failure of IT controls.
• 1:05 p.m. - Do happy dance mentally.
• 1:10 p.m. - Start writing memo documenting findings. It's the 1990's so you may or may not have access to an internet connection, let alone a cell phone.
  
• 3 p.m. - Meet again with client contact, announce preliminary findings.
  
• 3:01 p.m. - Client says "duh, we know that."
• 3:10 p.m. - Pack and and go back to Deloitte office to meet with IT audit manager.
• 4 p.m. - IT audit manager not on site. Finish up memo, print it, and leave it on their desk to discuss tomorrow. Or e-mail it, I don't know what the state of IT was in audit firms 12 years ago, to be honest.
  

You'll notice that my imaginary scenario doesn't even account for a full 8 hours. Well perhaps they spent two days at the Livent offices, or they had an assistant come with them, which would double the amount of time "spent" on the audit.

Where were the investors' angels?

Whatever the scenario, 28 hours would include time spent by the IT audit partner, as well as the aforementioned manager, reviewing the findings, preparing a report, and basically communicating to the financial auditors that whatever came out of that accounting system could not be trusted, so they had better do a good job of testing things in a higher-risk environment.

Unfortunately the results of the ICAO disciplinary hearing against the Deloitte partners involved in this case indicates that there were problems.

Ironically the follow up article, which reports that the partners' appeal failed, and their conviction was upheld reveals that it was a failure of professional skepticism when dealing with some issues that were out in the open that was the problem - they were discussed among four partners in fact.

Interesting for people who believe that the Big Four people always stick together in defiance of what's right no matter the circumstances, note that in this case one of the partners successfully defended himself by pointing out his disagreement with the other three:

"(Dr.) Peter Chant, a fourth Deloitte auditor, was charged with misconduct but was found not guilty of any wrongdoing after testifying before the ICAO panel that he had tried— but ultimately failed— to convince the firm to resign the Livent account."

An incredibly experienced auditor - he even has a doctorate! - who serves as a good example of why it's worth standing up for yourself and what's correct. Wow.