Auditor Responsibilities
What exactly are the day to day responsibilities of an auditor? What do you do when it’s not the busy season?
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Most likely, the same thing Jeffrey Epstein's prison guards were doing
depends on what line of service you’re in, but generally it’s the same type of work but just a bit more spread out. Process/risk assurance testing was roughly the same during the year as it was in busy season, just that there was a lot more work. Not sure about all of the Big 4, but I know for one of them (so I assume for the others it’s the same) you need your CPA to advance (with pay, I heard of some people getting promoted to senior associate without getting the pay bump without their CPA), so during slower periods of the year you can study for that if you’re young enough and not on super busy projects.
Overall, it’s insanely boring and you’ll literally feel yourself growing older. I’d rather watch paint dry.
what does process and risk assurance testing entail? is that most of what an auditors job is?
You basically check other peoples work for a living.
It’s a god awful, shit for brains job. Girls just call you a nerd and they move on to the real finance chads. Save yourself the depressing life and go do something worthwhile!
why do Corp fin roles like fp&a prefer ppl w auditing experience if it is checking work? why wouldnt they prefer someone who started out as a fin analyst out of undergrad and already has exp doing the job
I’ve done everything from staff auditor to CFO work - the people giving answers on this topic are smart enough to know some basic finance and modeling skills and naive enough to think that makes them more than marginally different from an auditor in terms of difficulty of the work and required intelligence. I get pay, prestige etc etc but people overstate their own jobs
Apparently in EY in Germany, you don't have any!
Former auditor...Although most busy seasons run from January-April, there are still auditors who could have another one in the summer or fall, depending on the client's filing deadline (i.e., they are not a YE filer). As for what they do when it's not busy season, it defintely varies depending on the type of client you are on (e.g., public or private). Typically during the summer is when the planning process occurs. This can involve filling out/rolling forward mundane forms, performing the scoping process (figuring out which components of the business and corresponding BS/IS accounts you are going to test), and prepping the audit file for the upcoming year. If you are on a public client, you'll perform quarterly reviews 3 times a year. The higher up you go, the more interesting it gets. For example, if the client has acquisitions, significant or unusal transactions, etc. then you'll be in meetings with the partner figuring out how you are going to test it.
During the fall is usually when the majority of control testing takes place (read: boring). The rest of the time is spent prepping for the audit come January.
What transferrable skills do you learn from being an auditor? From my understanding most ppl do audit then go into F500 fp&a role so what is it that those companies llike about auditing experience? Also if you could explain what some other exit opps are from audit id appreciate that as well
What are you trying to do long-term exactly? I think that could help answer your question better. Not sure where you heard that most people from audit go into FP&A. I don't think that's true. It can actually be somewhat difficult to make that jump from an audit background. It really depends on how long you stay. Most people that leave within 1-4 years are looking at financial analyst/sr fin analyst roles in industry; i.e. doing JE's, updating rollforward schedules, monthly closes, etc. 5-7 years you'll be looking at a managerial role/assistant controller in industry. 8-10+ years maybe a controller, director of x, etc. Exit ops really vary depending on what you want to do. Like I said, most people will go into industry and work in some accounting centric role. Some may go into FP&A, others will go to law school/MBA, and a few may quit accounting/auditing all together and do something completely different.
very few auditors move to pure Corp finance roles (FPA, treasury., internal M&A teams...etc). most auditors (not speaking big 4) tend to move between internal audit, controls, and finance project management (ie finance transformation / system integration)
I’ve seen big 4 auditors go to controllership then hop to Corp finance.
Mainly planning for the audit and testing towards year end. If you have any publicly traded clients you'll need to review their interim statements throughout the year. I audit financial institutions so we actually do loan reviews, BSA Compliance audits etc. Not just F/S audits. I also travel to give presentations on accounting and regulation law/rule changes to clients.
Does anyone know what PE/VC audit entail and how are they different (if they are) than auditing commercial companies?
Did a few years of audit. I got rusty with concepts now but will do my best. Auditor's main role is to 1) provide reasonable assurance that the financial statements are legit (without material mistakes) 2) provide reasonable assurance that internal control related to the financial reporting process is tight (without material weakness)
Outside of the planning, scoping, etc. the main activities of a junior auditor revolve around the two goals above and basically entail the following: 1) testing of details: this is actually checking the numbers on a 10k. aka, tick and tie all day every day. For example, client says there's $2b of cash. Auditors will reach out to the bank to confirm, and then ask client to provide the reconciliation. Oh Wirecard, you say you have $1.2b of accounts receivable, well give me the detail list of transactions that make up that $1.2b and auditors will select a few transactions (using a statistically sound method) and ask for invoice, receipts, reach out to clients for verification, etc. Trust me, this is one of the more exciting things you can do as a junior auditor 2) review of internal controls: this is what drove me away from audit profession. At the time it felt like a complete waste of time, but it's just no different from any compliance work. For example, IT control, how do you know your 10k that's about to be disclosed isn't accessed by then altered by a disgruntled ex-employee? Now you gotta test the IT access control of system (do users have password that's robust and changes every 3 month?) ! Are financial numbers properly reviewed and signed off by qualified and properly trained accountants? Do Wirecard and Enron and Worldcom top execs seems to behave ethically? Auditors will go chat with all the "control owners" and "walk through the process" and then obtain client work papers check if the documents are timely reviewed and signed off,
In a nutshell, audit is compliance work. It doesn't add value. I don't know if all the analytics changed anything. But in essence, it's just a necessary burden on audit clients. Auditors do really, really well for themselves. The job is stable. And audit partners have a good life honestly. I sometimes think back and not sure if it was a good idea to get out.
Thank you this was a really well done in-depth description. Then what are the real transferrable skills you gain as a junior auditor? It doesn't really seem like the job is very analytical (correct me if im wrong). From this description I feel you would gain a better understanding of accounting through a FP&A position or FLDP (again correct me if im wrong here; just trying to understand the position)
i agree the job is not very analytical in nature. the marketable skills you can gain as a junior auditor is that you are well trained by world class accountancy firms and have a good understanding of accounting, you have good interpersonal skills, you have a team work spirit and might have already started leading a small team two years out, you may even work directly with a mid senior level client at a Fortune 50 company. and you are hard working. It's all relative, I know. a junior auditor's understanding of accounting will be not as good as the folks in accounting advisory. the interpersonal skills will not be better than the strategy consultants, and lastly, as a junior auditor, you don't work as hard as the bankers. but getting a job at the big 4 as a junior auditor is still a stamp of approval of a reasonably smart, well rounded recent college graduate.
Juniors leave audit in droves after two years. Most moves to Corporate Accounting or FP&A roles. Many also choose to move to Transaction Services (FDD, Valuation) or Accounting Advisory (help clients with ASC 606 implementation), be in internally or externally to another large professional services firm (Accenture, Deloitte, EY, KPMG, PwC, RSM, etc.) From there, you essentially becomes a specialty consultant, and usually you will be at a juncture in your career, in which you have to decide whether you want to continue on to a niche function, or exit to MBA to reboot your career.
I worked in audit too and I'm surprised you say you're not sure if it was a good idea to get out. I'm curious what you're doing now and what made you say that? To me, it was a very long slog to make Partner and the work along the way was very boring. As you said, it's purely compliance work/very detail oriented and doesn't at all deal with the actual financial data/what drives the financial statements. Furthermore, I felt there was limited learning because I was basically following an analysis someone already made and checking it against guidance that has already been referenced or researched.
Creating these schedules from scratch, doing the research to figure out what needs to be done, and how to create the process/policy is where CPAs make their money. As such, I thought it would be detrimental to my own ability to think critically and add value to clients/internal stakeholders if I made a living of signing off on peoples' work my whole career.
curious as well what you're doing now and how you used your audit experience to qualify you for the role
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