Amid the cute little kids in their funny costumes, this pleasant Halloween night there was a grown man in a suit at the door asking for candy. White shirt, red tie, gray pinstripe.
Not so scary, thought I.
“What are you dressed up as?”
“An auditor,” came the reply.
That’s not frightening, since I’ve been an auditor for a long time. But it did explain the old-style, standard issue uniform.
So, putting on my peer reviewer hat, I asked, “what audit work do you do?”
“Oh, only one pension plan….
When I awoke, I found my wife had moved me to the sofa and had placed an ice pack on the goose egg where my head hit the floor.
For you see, Hollywood with all its special effects and makeup hasn’t dreamt up anything as scary to me as an auditor whose entire audit practice consists of one pension plan audit. Or one Uniform Guidance audit.
Not sufficient to induce a blackout but still scary is an auditor who provides only one audit in total.
The dangers of material errors and fright from material omitted audit procedures top any horror movie ever made.
Some post-recovery comments
Now that I’ve stopped shaking and the swelling has gone down, there are a couple of serious thoughts.
Pension audits and Uniform Guidance audits are likely the most risky work a CPA can perform short of getting into the SEC world. Performing just one or two of those audits is extremely dangerous.
Yet some CPAs do just that. I’ve had many conversations with firms doing so.
There are serious requirements that go far beyond the usual GAAS work that we auditors are comfortable with. If you don’t know what extra work is required, you can get yourself into serious trouble.
From what I can see, the federal IGs don’t have any hesitation to refer defective work to the state boards for investigation. If you want to have some unhappy thoughts, think about an investigator from the state board going through a complete set of your workpapers to see if you did a professionally competent job under the pension or single audit rules.
So if you are doing just one employee benefit or Uniform Guidance audit, make really, really sure you know the requirements.
Might be a good idea to let go of that audit if that’s the only one you perform.
You might want to be veeeeeery careful if you only do a couple audits outside the pension & single worlds, even though that isn’t frightening enough to make a CPA pass out on Halloween.
(Tale of this particular night was originally posted on October 31, 2013.)
(Cross post from Attestation Update.)