After years of talking to clients about what bothers them about their audit, there are two main themes I heard a lot:

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• Partners and managers know their business and understand accounting but the lower staff are so green that at times they feel like they are teaching the accounting firm how to do an audit.

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• Audits are just not efficient because there are new team members on the engagement each year, and the ones that stay on the engagement move to new roles on the team and are still doing new items for the first time.

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Most public accounting firms use a staffing model that is broken. It’s an up-or-out mentality that encourages staff to keep moving up the ladder from staff to senior then to manager all within about 5 years. This pushes staff to constantly learn new skills at the risk of not mastering the old skills. We have heard for years that on average it takes a person 10,000 hours to master a skill .

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Outliers is the "10,000-Hour Rule". Based on a study by Anders Ericsson, Malcolm Gladwell claims that greatness requires enormous time.

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At other firms, new staff work on the following audit areas for approximately the first nine months.

• Cash

• Prepaids

• Property and equipment

• Accruals and Liabilities

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They also rotate to a new client approximately every three weeks during this time and therefore see on average about 12 clients during the nine months.  They will audit the areas above on their clients for an average of about 8-12 hours per client. This is a total of approximately 150 hours spent on each audit area before moving on to a new area.

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After that, most firms push the new staff to start working on different areas to get them ready for the next year. Therefore, for the next nine months most staff will work on the following areas:

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• Accounts Receivable

• Basic Investments

• Contributions Receivable

• Debt

• Deferred Revenue

• Expenses

• Revenue

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They still rotate to new clients approximately every three weeks during this time and again see about 12 clients and have 12 opportunities to learn the new auditing sections. After that, most firms push the staff to start working on different areas to get them ready to be a senior. When they make senior, they have an entirely new set of responsibilities and they have to remember what they did when they started two years ago as it has been that long since they have done those areas. Therefore, the staff that the average client gets has less than 150 hours of experience in testing the areas that they are asking questions about.

 

Do those staff really understand what they are doing and more importantly WHY they are doing it?
 

Overall this model is not efficient. Can you name any other industry that has this format?

 

TBFoster has solved these issues!

 

At TBFoster our staffing model is very different from industry norm and more like any other large company. Our firm has specialists in each audit area lead by a team manager who also specialises in that audit area. For example, instead of have a new person do the cash, prepaids, property and equipment, and accruals and liabilities for 9 months, we have a team that just does cash, and a different team does prepaids, etc. There is a manager who oversees just this part of the engagement--not the whole engagement. This allows our staff to spend a considerable amount of time in one area and become masters of the audit process.

 

Think of it this way. If I gave you a 20 piece puzzle and asked you to solve it, how long do you think it would take you? Now what if you were putting that same puzzle together for the 10th time, would your time be faster and more efficient? That is what we are trying to do. Our staff are experts in one area, understand the controls, risks, and audit procedures around one area. Next year when we recur on the engagement, the same person will be auditing the same sections they did last year. Therefore not only will they have seen, for example, cash 100 times vs. 12 times like other firms, but they also will have worked on your cash cycle and understand your systems and controls. This is a huge benefit to you as there is no more repeat training. Our teams get in and out faster, and give you more time to keep up with your normal business operations during the audit.