Here are some fun or interesting or useful tidbits from the October 2018 A&A and the June 2019 Not-for-profit conferences presented by California Society of CPAs.
“Get in or get out”
The second speaker who discussed peer review in previous post also said that if you are doing A&A work you need to “get in or get out.”
Let me translate that…
“Get in or get out” means you need to have enough engagements to be proficient, get serious about CPE, get serious about your professional reading, and get serious enough about paying attention to the massive changes in accounting, audit rules, and peer review that you really, reeeeeally know what you are doing.
Another speaker said that federal regulators (that means PCAOB for those who avoid that world like the plague) are fed up with the poor quality of broker/dealer audits. They have lost their patience, is how this speaker described the situation.
That means if you perform broker/dealer audits, you need to get very serious about complying with the specific rules for that world. Doing just one or two or three of those engagements isn’t enough to be proficient. “Get in or get out” applies here as well.
The same “get in or get out” concept applies if you are providing yellow book audits. You need to do more than one or two if you want to be proficient. The overall failure rate for yellow book audits is not very good. The failure rate for firms or individual partners who only perform a few is, um, bad.
If you don’t understand the “or get out” risk, please ponder that the federal regulator who looks at yout broker/dealer audit can drop a big hammer on you if you miss the boat. I perceive that the federal regulator who considers your pension audit to be deficient won’t hesitate to file a formal complaint with your state board.
If you are doing broker/dealer or yellow book audits, you need to either get very serious or drop those clients. Same with audits. Get serious.
I would suggest the same applies for firms only providing reviews & comps. Look at the disciplinary actions by the California Board of Accountancy and you will see practitioners getting their license suspended (with a stay of the suspension with three year probation) for failures in review engagements and even for compilations.
Get serious about these specialized areas or refer the work out to a colleague.
Next post: ideas for nonprofits