Thinking of going into audit when graduating? Do Comp Sci

Hey all.

I was initially asked to do a webinar about this, but since WSO focussed away from my field, it would be morally wrong for me not to share this with you.

I'm working at one of the big 4 (doesnt matter which as all are doing it, just we're ahead - shots fired).

I'm not an auditor at all, im a data techy guy, and a project I'm working on at the moment is automating the audit. Plug into a clients system, download their data (imagine sales records for some of the mega corps), and tada, audit outputs on ALL transactions, not just a sample any more. (this isn't confidential, but how we do it is, so don't ask).

This will "save thousands of hours" (no your work days arent getting shorter, you'll just have fewer colleagues),

Anyway, there are massive changes coming to how Big 4 do their thing, but one things for sure. Lots is being automated and it's easier to teach a tech person to do finance things than the other way around.

Regards
T

 

This has been done for years. This was done back when I was in the Big 4 6 years ago. Data analysis is great for some things, but computers don't think like people. Sure, you can analyze and entire data set and look for outliers - but it doesn't address unexpected risks which occur and defy "computer" logic. For instance, you can test revenue at the transactional level this way... but you can't use it to adequately assess cutoff or reserve amounts.

Maybe my teams were ahead of their times, but I don't see how this is such revolutionary information. It's also not that difficult to get a data dump.

 
Managerette:

This has been done for years. This was done back when I was in the Big 4 6 years ago. Data analysis is great for some things, but computers don't think like people. Sure, you can analyze and entire data set and look for outliers - but it doesn't address unexpected risks which occur and defy "computer" logic. For instance, you can test revenue at the transactional level this way... but you can't use it to adequately assess cutoff or reserve amounts.

Maybe my teams were ahead of their times, but I don't see how this is such revolutionary information. It's also not that difficult to get a data dump.

given that we are first to market and it's in a pilot stage now, I find this unlikely, I don't mean electronic assistance to audit, i mean full on automation.

 
Best Response
trazer985:
Managerette:
This has been done for years. This was done back when I was in the Big 4 6 years ago. Data analysis is great for some things, but computers don't think like people. Sure, you can analyze and entire data set and look for outliers - but it doesn't address unexpected risks which occur and defy "computer" logic. For instance, you can test revenue at the transactional level this way... but you can't use it to adequately assess cutoff or reserve amounts.Maybe my teams were ahead of their times, but I don't see how this is such revolutionary information. It's also not that difficult to get a data dump.

given that we are first to market and it's in a pilot stage now, I find this unlikely, I don't mean electronic assistance to audit, i mean full on automation.

That sounds like some quality big 4 koolaid on "first to market". Man, I really dont miss that place.

 

It's called data analytics and it's just creeping into some of our clients now. It's a good 3-5 years away from being an actual thing, but it's coming.

The idea with auditing is to take out as much of the grind work so auditors can focus on the "professional judgment" aspect of the audit. We also offshore a ton of grind work to India which has helped a ton as well.

I see audit eventually being as much of an IT job as it is accounting. Companies will poach auditors not just for their knowledge on reporting guidelines, but also for their IT knowledge in implementing an analytics program to identify trends and weaknesses not previously identified.

I think this is a good thing because it turns auditing back into a "value-add" job that it once was.

 

IMO, sending work to India is a bigger pain in the ass than if I just did the work myself. After uploading all of the templates, typing up detailed instructions, etc.. it still takes them twice as long to do the work and half of it is wrong so I end up having to rework it. It also doesn't help that India is about 12 hours ahead which strains communications. I understand that partners are trying to keep audit bids competitive while making a better margin but from an associate perspective it is just a major headache.

 

When offshoring first came out I would have agreed with you. But they've been doing it for over 3 years now and the process is much faster, and I find the workers there much more competent than when this program first started. It has saved quite a bit of hours of grunt work.

But I do agree with a point you touched on - trying to keep bids competitive whilst increasing margins. This has been a huge pain in the ass. Big 4 firms undercutting each other on fees for clients WHILE trying to cut costs by giving us less time to do said audits WHILE introducing new additional procedures every year to make the audit more "effective". It's a lose lose which is so many auditors are leaving in droves. Less people want to be public accountants so we are getting more and more understaffed each year. Audit revenue at Big 4 firms is stagnant at best, firms are cutting costs more than ever, and morale is the lowest its been.

Data analytics will flip the audit business on its head, which is great because this business needs it to survive.

 
Big4Propaganda:

IMO, sending work to India is a bigger pain in the ass than if I just did the work myself. After uploading all of the templates, typing up detailed instructions, etc.. it still takes them twice as long to do the work and half of it is wrong so I end up having to rework it. It also doesn't help that India is about 12 hours ahead which strains communications. I understand that partners are trying to keep audit bids competitive while making a better margin but from an associate perspective it is just a major headache.

Your offshore staff might be terrible (it sure was while I was at a Big 4 firm - we eventually refused to use them on my client), but not all work coming out of India is terrible. The audit firms just haven't figured out how to do it correctly.

I'm now in industry and one of our segments is highly reliant on offshore staff for back-office functions. They pay above-market for India (significantly cheaper than US wages but reduces turnover), have them keep US business hours, have moved a few high-performers to the US to provide US-based support for the group, and approach training them as they would any resource with no working knowledge of what they are asked to do. I was initially leery when I heard the amount of reliance in offshoring but have been very impressed, even having them support our consulting projects if they relate to the segment. For them, they've really figured out how to make it work.

 

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