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Shortcuts in audit procedures?
2 October 2001
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It would appear that the Auditing Practices
Board, the BBC and a variety of others are stirring up a
hornets nest with the results of a recent poll on audit
procedures. When I learned to audit, I was told to tick anything that moved. In fact, many managers insisted that I ticked anything that didn't move as well, just in case. After some years, someone far more able than myself realised that you didn't have to tick both sides of each transaction, and that ticking one side would suffice. Feeling my passion for auditing slipping away, I realised that this new-fangled Directional Testing reduced the time taken for decisions regarding which type of tick to use, and which colour of pencil was needed this year. As I was moving away from auditing, the directional testing was being replaced by risk-based auditing. Hmmm..."risk-based" Doesn't that imply some sort of, er, risk? This is nothing new, but my comments so far don't help. If auditors are taking shortcuts and if this is a problem, we should be looking at the causes. Auditors take shortcuts because they're under pressure to do so. Fees are under pressure, so the time available is under pressure. Let's examine the equation (we all like playing with numbers after all) The fees are fixed Staff salaries are more-or-less fixed as a result of labour market forces Overheads are more-or-less fixed The amount of audit work is also pretty-well fixed. Partners are getting fed up balancing the equation by drawing less from the business, so the only remaining variable is Time. But, Time is a limited resource, so the only answer is improved efficiency. So, how do we improve efficiency? You talk to Cynare that's what you do! |
Copyright Cynare Ltd 2002
Last updated 25/06/2003