So please forgive me if I come off as insensitive.

Are all newbie auditors just inexperienced or what?

I am frustrated and so are all the other accountants to say the least. The past two year end cycles I have gotten some of the most ridiculous questions.

1) An auditor didn't get why we didn't have an accrual entry, because we recorded actuals (we only accrue if we have to).

2) Not understanding what a cash call is and that a specific invoice may be paid for with one or several cash calls, but hardly ever is there a specific payment for that invoice number because they paid via a cash call.

3) Third party answering confirmation claims no knowledge out an outstanding invoice. They must login and download invoice electronically. I login to website and show them a person at the third party's account and timestamp where they logged in and viewed the invoice with no disputes, but somehow it is my fault the partner is in lala land and didn't answer the confirmation correctly.

4) Another third party refuses to answer confirmations. I gave them three different contacts at the third party that are ignoring their queries. I send them information for a fourth contact but the auditor writes me back to tell me they didn't receive the information when it in the body of the email.

I am just frustrated. Maybe I just need to suck it up and set aside a week every January to train new auditors on our business or maybe they do stink. Who knows.

Our Big 4 auditors are usually pretty good, but our current batch combined with the oil and gas climate might drive me insane.

Welcome to checklist auditing 101.

Audit firms like to send out the newbies after providing them with the prior year or two workpapers and an audit checklist of tasks to complete.

Said newbies may understand basic concepts and the situation, but have little to no context. And of course their supervisors/managers are having meetings with people more important than you.

Last year it was so bad I went to where we office them and met with their manager. We of course basically keep them in the basement. They have windows, phones, and several workspaces, yet I still hear griping. Of course the manager was like yeah, I get xyz no big deal. This was after 2+ weeks back and forth with his staff.

This is my 7th year end financial audit at my company. The first 5 were not this miserable.

Probably my 30th audit of statutory, financial, tax and partner audits. There was only one statutory audit that was miserable two years in a row so we politely fired them after the two miserable years. The escheat audits are awful but that is the states' fault.

I'll play defender of auditors here, though its completely possible the people doing the work just aren't smart.

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1) An auditor didn't get why we didn't have an accrual entry, because we recorded actuals (we only accrue if we have to).

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Doing things outside of normal business patterns, specifically at year end, may get a question. Just because a question is asked, doesn't mean they think you did something wrong. They don't know the rationale behind everything and may not be able to see everything to connect the dots.

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2) Not understanding what a cash call is and that a specific invoice may be paid for with one or several cash calls, but hardly ever is there a specific payment for that invoice number because they paid via a cash call.

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The situation you're describing is both jargon-heavy and pretty industry specific. Having your partners directly pay your bills, without the cash first coming through the company and then out to the vendor, is hardly routine and normal. Maybe for your company, but not in general. Unusual transactions take some hand holding some times. Companies do fishy things with equity sometimes and any non-routine transactions, especially larger ones, should expect some level of investigation.

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3) Third party answering confirmation claims no knowledge out an outstanding invoice. They must login and download invoice electronically. I login to website and show them a person at the third party's account and timestamp where they logged in and viewed the invoice with no disputes, but somehow it is my fault the partner is in lala land and didn't answer the confirmation correctly.

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If you're not able to see that there is a real risk here and should expect questions, it may be impossible for you to understand their perspective ever. Just because you have some system showing that someone has received an invoice, doesn't mean its legit. There are always reasonable and routine reasons why confirmation procedures don't get the desired result, but a lot of times they can also turn something up. A negative response is something that has to investigated further, and as the company's accountant, you're going to end up having to do more to provide evidence for them to see that your receivable is real. They can't ignore evidence just because 'you know its good'.

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4) Another third party refuses to answer confirmations. I gave them three different contacts at the third party that are ignoring their queries. I send them information for a fourth contact but the auditor writes me back to tell me they didn't receive the information when it in the body of the email.

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I'll take your side on this one... if someone doesn't want to respond, then there are other procedures that can be done. The only reason I can think of to push it as hard as they are is if its some really big, individually important amount they want to confirm. As for missing the info you provided in the email... sloppy. Probably not getting much sleep this time of year, but still. If it were me back when I would be doing that type of work, I'd have just apologized and made a joke about it.

I think you misunderstood the cash call comment.

So by cash call...

We have a large several hundred million dollar offshore well. We operate and own 50% working interest. We have two other partners that each own 25% working interest.

So we are starting this big project soon. So in March and April we estimate costs to be $50MM. In February we send out a cash call to each partner to pay $12.5MM. They prepay the well costs so we don't have to spend the entire $50MM of our own money and basically float them a free loan. In March and April the actual costs come in and we invoice them for their share. Instead of us having them pay the invoices we apply the cash call the previously paid to the invoices. We repeat the estimate every month based on what has been already called and estimated expenses incurred.

I probably wouldnt be so frustrated if I didn't have to explain the same thing a few times a year, year after year. I have now explained cash calls to them 3 times in the last 12 months.

Auditors auditing an O&G company should understand the cash call process. It's extremely common.

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So please forgive me if I come off as insensitive.

Are all newbie auditors just inexperienced or what?

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In short, yes. Remember that you know the background of every transaction and how your company operates in general. Someone who is coming in fresh out of school knows none of it. I think it is understandable for them to ask questions that might seem basic, but then again, I've been in their shoes.

Unless you're a huge company, you aren't getting the A Team from the Big 4. Talk to your company about audit inefficiencies and recommend putting your audit out to bid in the middle market space. You'll be a higher priority and if there's a real issue with dumb questions, the senior or manager will step in.

However, keep in mind that you know these transactions more than any 20-something staff. They will ask you to reconcile payments to invoices in general. If their boss doesn't think it makes sense, they get sent right back to you. Maybe try bypassing these people and talking to their supervisor?

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Unless you're a huge company, you aren't getting the A Team from the Big 4. Talk to your company about audit inefficiencies and recommend putting your audit out to bid in the middle market space. You'll be a higher priority and if there's a real issue with dumb questions, the senior or manager will step in.

However, keep in mind that you know these transactions more than any 20-something staff. They will ask you to reconcile payments to invoices in general. If their boss doesn't think it makes sense, they get sent right back to you. Maybe try bypassing these people and talking to their supervisor?

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Is a $13 billion market cap big? I agree we need to rebid it out but that is about 4 levels above me for making a decision. Remember I am just a peon answering audit queries. Yes I have had to bypass them in the past and go to the Manager and will do so again. I just seems like the past two years the audit team has gone downhill. Maybe we are just getting the B team these days.


Anyhow thank you for letting me vent. This made my Friday bearable. Hopefully they are satisfied on Monday, if not I might scream.

Keep this in mind.

Staff auditors - literally have zero real world experience. They are asking the questions they are told to ask. They don't know how stupid or how smart a question might be. The world is black and white to them. So just answer their questions, clearly explain your business processes and look at it as a chance to grow your mentoring skills

Senior auditors - still have zero real world experience BUT they have been doing audits for a few years and they have seen enough companies and have hopefully been coached after jumping to enough conclusions that they are able to see shades of grey. So when a staff auditor says something ignorant, discuss it with the senior.

Managers - might have some real world experience but at a minimum they have seen enough companies that they should be able to make decent judgment calls. So if the you still think the senior is off base, bring up the question when you have your status meetings or initial finding good discussions.

If you still feel it is bull****, talk to the Sr mgr/partner.

Basically there is no reason to get angry with a staff auditor, but there is plenty of reasons to get frustrated with them. They are a dangerous combination of ignorance, intelligence and arrogance

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Managers - might have some real world experience but at a minimum they have seen enough companies that they should be able to make decent judgment calls. So if the you still think the senior is off base, bring up the question when you have your status meetings or initial finding good discussions.

If you still feel it is bull****, talk to the Sr mgr/partner.

Basically there is no reason to get angry with a staff auditor, but there is plenty of reasons to get frustrated with them. They are a dangerous combination of ignorance, intelligence and arrogance

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This.

Always remember, THEY work for YOU.

Or the shareholders.

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Always remember, THEY work for YOU.

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I know some of them forget they work for the client. The auditors we fired were performing statutory audits in a specific jurisdiction. After 2 years of problems and difficulty with their firm we ended up filing our audits six months late because of them! They acted shocked and appalled we would go to another firm that was smaller and better met our needs. The subsidiaries being audited had low materiality and they were small companies. That doesn't necessarily warrant being put off for weeks at a time because they were "busy" with other larger clients. So we went elsewhere.

I am hopeful our Big 4 Audit firm is content with what we provided.

Honestly, if the auditor is that clueless, they likely want you to hold their hand.

Associates want to look good in front of their senior associates and managers. They would love your help in learning your business.

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Unless you're a huge company, you aren't getting the A Team from the Big 4. Talk to your company about audit inefficiencies and recommend putting your audit out to bid in the middle market space. You'll be a higher priority and if there's a real issue with dumb questions, the senior or manager will step in.

However, keep in mind that you know these transactions more than any 20-something staff. They will ask you to reconcile payments to invoices in general. If their boss doesn't think it makes sense, they get sent right back to you. Maybe try bypassing these people and talking to their supervisor?

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Agree. OP has posted about his auditors in the past and I still have the same opinion...either your audit team is bad or your process is bad, maybe some of both.

Educating your auditors and paying an audit firm is a cost of doing business. Sure lots of companies do "X", but they don't all do it the same and as an auditor you need to understand how the client is accounting and reporting their operations.

They are inexperienced, and yes, you are going to have to spend some time each year training them and dealing with questions of someone that has spent a few days or weeks at your company vs years. You may find your blood pressure drop if you just accept this reality, pateintly explain things to them, and foster a decent relationship with them vs getting frustrated and short.

That's the business model because companies aren't willing to pay for the alternative where you only get a staff full of very experiencced heavies where the same exact team returns again and again, year after year.

I've posted this before also, but if your process never changes than put pen to paper and write it up so you can give it to the auditors to explain the ins and outs. A good memo goes a long way...

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I've posted this before also, but if your process never changes than put pen to paper and write it up so you can give it to the auditors to explain the ins and outs. A good memo goes a long way...

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Well I have been in several different roles the past few years. We have written documentation in the positions I left that describe our practices. In my current role since May we have been just trying to document processes. We are finally now starting with process improvements as I have a staff of more than just me. I'm hopeful that in another six months everything will be fully documented and serious headway will be made to improve our current processes. The current processes need improving as I don't know how many times I heard, "that's how we have always done it," or "you can only do it this way" without explanation of what it would break/hurt.

The problem I currently have is that the processes in my current role haven't changed much in the past five years. So from the audit perspective they shouldn't be confused on what they are auditing. Things of course change and the materiality and focus changes, but overall the concept is the same. Everyone up knows we had problems last year so I am hopeful problems this year will get us somewhere but I am not going to hold my breathe.

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Are all newbie auditors just inexperienced or what?

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By definition, newbie auditors are inexperienced. Not only that, but O&G accounting is a specialized kind of accounting.

The auditors are exhibiting what is called "professional skepticism". They aren't SUPPOSED to take your word for it. If you are doing something that doesn't fit patterns or expectations, you're going to get asked questions.

My mother manages the audit for her firm and she's always complaining that she has to train them every year. It's the nature of the beast, really.

All this being said, I always thought it odd that the people most likely to encounter problems, as a result of their proximity to the details work, were also the people least likely to recognize a problem, due to their lack of experience.

was an auditor in big 4. if you got a crappy staff it is because of apathy. They make us work 90 hours a week during a 4 month busy season at 3 different companies dealing with annoyed company accountants. The training is whatever and to be honest most of the newbies dont know anything. Once we do figure it out after the long busy season we get a $100 amazon gift card as our yearly bonus and half of the good workers bounce to industry jobs. The last half is the top quarter who will become seniors and managers...the other quarter is the crap leftover that cant get an industry job and will be stuck in an endless cycle of ****ty busy season clients and will likely be perpetually stuck at the manager level if they ever get there.

fyi i was a staff accountant who hated my job and bounced after 2 years when i finally learned enough to become useful on the job.

I remember being on one of my first O&G industry audits when I worked for a "big 6" firm. I didn't understand what I was supposed to do, really. I asked the senior on the job to explain to me the point of the procedures I was assigned. Her answer? "Just do what we did last year." Well, they had changed systems and it was impossible to do "what we did last year" because the new system couldn't run the same reports. All of my questions aimed at figuring out the point of the procedures, so that I could request comparable reports, were met with "just do what we did last year". Even after I explained that wasn't possible because they couldn't generate the same reports. I was forced to pester company staff to try to figure out the point of the reports that were run in the previous year in order to get the same information, if in different reports for the current year.

So, I was on an audit where I was clueless and the senior was either also clueless or apathetic. The client staff suffered for this.

I feel your pain, OP. They can be pretty frustrating.

I am in Internal Audit ... Each company I have worked at I have gained a reputation with our external auditors ... generally I will only talk to one or two of the seniors and then the Manager, eventually their staff just avoid me. If they get really annoying just pick up your phone and call the manager with the staff in the office, tell them that they need to come be involved in the conversation because their staff is not understanding sufficiently and you don't want to waste 2 weeks going back and forth.

I am at a small business <150 employees, so we don't use big 4 here. It is so refreshing to sit down and have a conversation with an experienced CPA that is not just jumping on the scene. I have received quite a bit of feedback from the senior that performs our audit. For me, it is a value-add beyond getting audited financial statements at the end of the process.

I have been through big 4 audits as well, and I agree it is hit or miss. Many times the big 4 staff guys are just trying to get done, because the lead is kicking their ass on schedules. I had one audit where the junior auditor found what I viewed as a legitimate issue. Instead of using his sample to investigate, he asked me to find enough valid data points for him to make it pass the audit test. Makes me chuckle... after audit wrapped up, I followed up on the matter and found a material issue, and we made a procedural change.

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I am at a small business <150 employees, so we don't use big 4 here. It is so refreshing to sit down and have a conversation with an experienced CPA that is not just jumping on the scene. I have received quite a bit of feedback from the senior that performs our audit. For me, it is a value-add beyond getting audited financial statements at the end of the process.

I have been through big 4 audits as well, and I agree it is hit or miss. Many times the big 4 staff guys are just trying to get done, because the lead is kicking their ass on schedules. I had one audit where the junior auditor found what I viewed as a legitimate issue. Instead of using his sample to investigate, he asked me to find enough valid data points for him to make it pass the audit test. Makes me chuckle... after audit wrapped up, I followed up on the matter and found a material issue, and we made a procedural change.

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i know a few colleagues who did this while a staff at big 4. When you are 90 hours into a work week and you just found something that will keep you there all weekend with absolutely no extra pay then whats the motivation. At 45k starting out with a masters there were more than a few apathetic souls barely making min wage when the work week was up so the partners could pay for their second home.
apathetic was an understatement for most 1st and second year staff.

Certainly the staff people are often apathetic. At that point, you haven't weeded out the people that aren't cut out for it.

My advice for a company's accountant who is going to be working a lot with the auditors... in line with the idea of writing up a memo/narrative describing the process... just have a sit down with the senior at the beginning or before year-end when things are less busy. Use this as an opportunity to make sure they understand things... so many questions from auditors are often the result of the accounting group providing just the raw data and not providing any explanation or context. I guarantee you know a handful of transactions or patterns or deviations from the standard process that happened, and these are things that will probably get asked about. Often times getting in front of things like those save a ton of time and annoyance on your part later. These are just my suggestions from being a part of this process for long enough.

The crazy thing with people's complaints about their Big 4 auditor is that those Firms are so much better than the smaller ones.

Overall, I agree that Big 4 is solid. My experience with Big 4 for tax and compliance issues has always been great. I think audit just generally sucks as a task, and because the nature of the work involves accounting staff interacting directly with entry-level auditors, it makes it worse. I think many staff accountants find audit intimidating, especially staff accountants without audit experience, so then tend to blame the auditor for being "stupid" when the reality is that the accountant just isn't very good at explaining things. That's my perspective. I can remember being a relatively young accountant working with a young auditor... blind leading the blind in some aspects.

I don't know ... I have seen controller level people get frustrated dealing with staff auditors. Public Accountinng in general, not just Big 4, provide very little on the job training that is relevant to the companies being audited and frankly don't give a damn if they have crap staff because it is such a cumbersome process to change your auditor.

I'd like to thank everyone for letting me complain. Hopefully I have so good ideas to combat this from happening again next year. One is a chapter on how cash calls work from an oil and gas accounting book. Going to start there and add documentation. I wish I had a week every year to teach them, but December and January are tough and very busy so they are going to get lots of reading materials instead.

I guess the first five years we had good seniors and staff accountants, but this batch needs help!

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I am in Internal Audit ... Each company I have worked at I have gained a reputation with our external auditors ... generally I will only talk to one or two of the seniors and then the Manager, eventually their staff just avoid me. If they get really annoying just pick up your phone and call the manager with the staff in the office, tell them that they need to come be involved in the conversation because their staff is not understanding sufficiently and you don't want to waste 2 weeks going back and forth.

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If you worked for me, you'd be on my **** list before the audit staff.

Internal auditors... the only people worse than external auditors, am I right?

Unless you sit on the board of directors for a large company there is little chance I will ever work for you.

And I don't know what kind of internal auditors you guys have, people love my department.

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Unless you sit on the board of directors for a large company there is little chance I will ever work for you.

And I don't know what kind of internal auditors you guys have, people love my department.

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Yes, because IA groups never have the unmentionable and unspoken dotted reporting line to Controller/CFO groups. I guess you've never seen an IA VP get tossed out?

I mean if you want to discuss the reporting nature of Internal Auidt we can. An IA head getting tossed from a public company can only officially be done by the board, what freedoms the board allows their executives varies obviously. I have always been a fan of administrative reporting for IA to be through legal, so many benefits of that structure.

But no, internal audit does not "work for" anyone but the board. Dismissal was not mentioned. I have never worked for a company where Internal Audit scope or audit plan was approved by the c-suite. I have also never seen an IA head dismissed due to job performance by the c-suite, dismissed for conduct, sure that is usually within their power.

Still doesn't change the fact that my department is fairly well thought if by most in the company. If you dislike IA you likely have a ****ty IA group.

We get asked in to look at things and we don't go on witch hunts lookin for stupid ****, we also try not to let external audit get away with writing up stupid ****. Of course my boss is like me and has never done public so we don't operate our department like a pseudo-public firm. Your mileage may vary, I can only speak to my experience.