What is the Biggest Time Waster on Small Audits?

There probably are a lot of correct answers to this question. In my opinion, one answer stands out…or maybe doesn’t stand out. The reason is doesn’t stand out is because it is a hidden cost. There is no line item on a budget, we usually don’t plan for it and there is little the staff accountants can do about it. I’m talking about inadequate work space in the field.

An old trick used by some CPAs when an IRS auditor came to work in their office was to give him the worst possible workspace, hoping it would be motivation to finish the audit quickly and leave! I’ve often wondered if the working conditions some of us have to endure at client’s offices is reaping what we’ve sowed!

Poor lighting, lack of adequate heat or air conditioning, desks or tables that are too small or work locations far from accounting personnel are examples of situations that hinder the efficient completion of engagements in the field. CPA firm leaders may not realize poor working space is a major time waster, but most staff personnel can testify this is true.

I’ve heard lots of stories in my staff training seminars but a couple top the list. One firm performed an audit of the Housing Authority of a major east coast city in March. Located in a renovated apartment house on a bay, the client had no room in its office for the audit team. Folding tables were erected in the hallway between the single-swinging front doors, which were directly across the street from the bay…and the winter ocean wind. Not only did the staff have to wear coats, hats and gloves to stay warm, they had to stop work every few minutes to talk with some of the elderly residents that enjoyed talking with the nice young people! This audit took twice the budgeted time to complete!

The award-winning story came from personnel of a CPA firm that audited rural hospitals. One of these hospitals had no office space to accommodate the auditors. Their patient bed-days were usually at 100% so the audit team couldn’t work in an empty patient room. You probably can guess—they had to work in the morgue! The in-charge accountant told us that after a few days the smell of dead bodies wasn’t really so bad! She said they even got used to orderlies rolling the bodies in and out of the vaults several times a day. What they never got used to, however, was when the medical examiner came into his adjacent room and cranked up his buzz saw! I asked if this wasted any time on their audit; to which she replied, “Only the three or four hours each day when I was sick in the restroom!”

The truth is engagement teams in the field have little success in correcting poor working conditions. Successful efforts occur when the engagement partner makes arrangements for good workspace with the top client official. Planning for proper workspace can save HUGE amounts of wasted time on audits of any size! Post a comment and tell us about your worst field working conditions.

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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.

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