The External Audit

9/3/2013

With both external and internal audits scheduled right after year-end there has been no down time as we dive straight into preparing for what is needed for when our friends, the PwC auditors, come in and hassle us with a multitude of questions in regards to our accounting system. It was a completely new experience for me to be in the shoes of someone being audited as opposed to my prior position as an auditor. From this new perspective I could understand a little more clearly the exasperated sighs of clients as an auditor came back question after question.

One of the main tasks assigned to me for this audit was to find out whether invoices paid out in January relating to 2012 work was correctly accrued in December. This in turn would help verify that our P/L statement for 2012 was a correct and fair representation of what happened in that year. However this turned out to be an arduous and tedious task because there was nothing to show in SAP whether invoices paid out in January and beyond related to 2012. The only way we could confirm that was to go through all the invoices processed in the early months of 2013 and determine manually which of them related to 2012 work. Sometimes it involved getting into contact with the person who had created the Purchase Order (PO) for the expensed item and to clarify with them whether it was 2012 or 2013-related work but this almost always resulted in a time lag as responses are hardly ever immediate. As hundreds of invoices are processed monthly this task seemed almost impossible so I sat, scratching my head, trying to generate ideas that would allow me to complete the task in significantly less time but to no avail. I was feeling quite defeated and stressed at that time so I finally decided to seek advice from one of our grads and the advice she gave me was to go back to our Financial Controller and discuss it with her. After discussing my problem with the FC and seeing the impracticality of the task at hand, she introduced a materiality bracket which meant I’d only have to go over invoices that are of a significant amount. After sharing my worries I felt much more refreshed and eager to get back to work since my goal felt much more achievable. If I had shared my issues and explained my problem earlier I may have saved myself some stress. Not only that but from that task, I’ve also learnt that asking for advice is a good first step for when you’re stuck in the mud!