The failing on display is a suspect commonplace, not just in Grant Thornton, but in many of the mass of audit failings noted by the FRC amongst the major audit firms each year.
There is an expectation that we should have cheap audits. Firms deliver them using, very largely, quite junior staff who are in their early twenties, who have almost no experience of accounting, very little on the job training, and who have never done any actual accounting because opportunity to do that is almost unknown in larger audit firms. The primary goal of these staff remains what it has been throughout their lives to date, which is to pass exams and then move on. Audit is for them little more than a ticket to a right of passage, which is qualification as an accountant and the financial rewards that brings. Their interest in audit is marginal, at best.
These are the people that sustainable Cost Accounting depends upon to decide the costs of going emissions neutral, to decide whether a company is carbon bankrupt or not. The entire economy is to be delivered to peeps 12 months out of university who aren’t actually interested anyway and who have no particular skills either.
What could go wrong?
Audit is for them little more than a ticket to a right of passage
Does he mean extreme right of passage?
Sounds to me like a plea from a beancounter for more money for beancounters. With the emphasis on the beancounter in question. The details are irrelevant.
People who know nothing, go in to big firms to learn something then move on to better things. Who’d have thunk it.
Rite of passage, Shirley?
“Firms deliver them using, very largely, quite junior staff who are in their early twenties, who have almost no experience of accounting, very little on the job training, and who have never done any actual accounting because opportunity to do that is almost unknown in larger audit firms.”
When auditors do ‘actual accounting’, Ritchie complains that the firms are not independent. Heads, spud wins. Tails, the auditor loses.
I wonder how interested Capt Potato was in auditing when he was training for a Big 8 firm? I suppose the revealed preference, that he set up a firm dealing with accounts for minute enterprises as soon as possible after qualification, says it all. He had done enough auditing. Of course, he now has to pretend that it is a fascinating field of intellectual endeavour. Unfortunately he doesn’t seem to remember much of what he learned
In fairness most low level auditing is grunt work require those 2 nice people called Tick and Bash so using low level trainees at a lower cost per hour is rational and reasonable, especially as few people would choose to do the job otherwise. That is also why the qualitative bit is done by the experienced people the juniors are just doing confirmation.
The more difficult problem is that with complex issues like long term contract valuation say where there is a subjective element it’s often not hard for someone who does it say in day out and knows the company systems and the accounting rules to be able to run rings around an auditor in terms of devising a reasonable justification. This is a drawback of rotating auditors to stop company capture but then sometimes with controls you have to have trade-offs