The High Cost of Inadequate Fieldwork Workspace
With no place to work in the office of the housing authority of a major city, the audit team was provided tables and chairs in the hallway of a renovated apartment building that connected the swinging front door with the elevators. In the middle of winter in a city located on a bay, the wind swept into the hallway driving temperatures to near freezing. Clothed in parkas, scarves, wool hats and gloves, the audit team struggled through the engagement.
Auditing rural hospitals, CPA firm personnel were ordinarily assigned to a patient room for workspace since there was no room for them in the hospital office. This year there were no patient rooms available so they were assigned to the morgue! Steel tables and high stools were their accommodations. Formaldehyde, dead bodies draped in sheets and the medical examiner’s buzz saw greeted them each day.
The auditors of a plumbing contractor were assigned a dark, damp room in the basement for workspace. The room was two flights of stairs and several hundred yards from the accounting office.
Two auditors were assigned workspace at a desk adjacent to and facing the controller. The controller smoked, they didn’t.
I could relate more true stories on and I suspect you could add your experiences to this list of inadequate fieldwork workspace. Here are some obvious questions:
1. Did any of these scenarios increase time charges on the engagements?
2. Who had responsibility to correct or prevent these circumstances?
3. When should corrective action be taken?
4. What actions should have been taken?
Question 1: Of course time charges were increased! The auditors of the housing authority said the audit required almost twice the amount of time it should have. The hospital auditors lost numerous hours going for fresh air and to the restroom to vomit! Going back and forth to the accounting office wasted enormous amounts of time, although the team did lose weight. Not only was the health of the non-smokers impaired, they wasted time leaving the room to discuss audit issues and securing all working papers and electronic equipment every time they left the room.
Question 2: The in-charge accountants on these engagements had responsibility to run the fieldwork but their “stick” wasn’t big enough to get the managements to change their workspace. It was the engagement leaders’ responsibility to speak with managements to correct the situations.
Question 3: If the workspace could not be improved internally, a nearby motel room, a recreation vehicle parked outside a client’s facility or an electronic air filer could be remedies. The cost of these alternatives is likely far less than the unbillable wasted time.
Question 4: This is a planning activity! Proper workspace should be arranged by the engagement leader before the fieldwork begins. Engagement profits can be increased considerably by using foresight and arranging for proper workspace!
Making more money on audits results from the audit team taking advantage of every opportunity to save time. Arranging proper workspace is just one of those opportunities. My Small Audit Series of live and on-demand webcasts is filled with numerous time-saving opportunities. A syllabus for each webcast and registration is available at www.cpafirmsupport.com .
by Larry Perry, CPA, CPA Firm Support Services, LLC - Larry has over 40 years experience as a CPA practitioner, author of accounting and auditing manuals, author and presenter of live staff training seminars and author of webcast and self-study CPE programs. He is co-founder of CPA Firm Support Services, LLC (www.cpafirmsupport.com), an organization providing resources, training and consulting to smaller CPA firms. Larry writes a weekly blog on AccountingWEB.com focusing on small audits, reviews and compilations. He is currently developing documentation manuals and handbooks for small audits, reviews and compilations and related electronic practice aids.