PQ magazine July 2016
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‘MISMATCH’ FOR YOUNG AUDITORS PQ magazine
ACCA gets tough in the exam hall
EXCLUSIVE
The whole audit process is being compromised by the social ‘mismatch’ between young, inexperienced auditors and older, more experienced client management, says awardwinning research from US academics Bradley Bennett and Richard Hatfield. Their study found that this age mismatch often impacts on the staff auditors’ willingness to gather the additional audit evidence needed to properly complete the audit confirmation task. Young auditors, sometimes with limited experience, can find themselves in intimidating situations with more knowledgeable and experienced clients, who according to the research can often quickly become annoyed with what they perceive as silly questions. The worry is that when young auditors are paired with these older, more experienced company accountants just 35% of them chose to meet with the accountant face-to-face to ask further questions and gather more information. When the age gap between the two was a better match some 83% of auditors wanted to meet face-to-face to ask those extra questions. This reluctance to ask follow-up
Bennett: firms need to provide training so your auditors aren’t intimidated
questions results in less evidence being collected and lower-quality documentation and conclusions, claimed Bennett and Hatfield. And it didn’t end there, as work papers were often prepared in a vague way, making the loss of information hard to detect during the review process. The only saving grace in the process has been the rise in the use of email. Younger auditors are much more likely (69%) to request additional evidence this way. Bennett and Hatfield said that email curtailed the reduction in evidence collection caused by avoiding live face-to-face interaction, but did not
eliminate it altogether. They said: “Overall, while electronic communication helps it does not completely erase staff auditors’ reluctance to ask follow-up questions and, importantly, such communication loses the richer context of in-person interactions.” Bennett told PQ magazine that there may be some specific training that firms could provide to address the staff auditors’ decisions when they feel ‘outmatched’ by client management. He felt that managers and partners must be fully aware of the problem so they can address Continued on page 10
Tighter exam security was in evidence at many ACCA exam halls during the latest sitting. Some candidates felt that invigilators seemed much tougher on what PQs can and can’t bring into the exam hall. We’ve heard stories of labels being cut off water bottles and mint wrappers being confiscated. All phones, smart watches and other electrical devices (including fitbits!) now have to be kept in clear plastic bags under chairs. As one student said: “They cut the label off my beloved Evian midway through the P1 exam today! It took me a while to get over the trauma.” Students are also being told they are no longer allowed to bring coffee or cans of drink into the hall. Even bananas have been confiscated. Turning to the exams, the big surprise was a ‘decent’ P5 exam. Students genuinely wondered if the ‘real’ examiner was on holiday! F5 sitters were worried about ‘the hardest MCQs ever’ and P1 candidates wondered why they had done all that revising when all they needed was a bit of common sense.