Awhile back, we solicited questions from you all about what a career at the PCAOB as inspector might be like. It took some time (I blame myself!) but we've managed to get our interview with Helen Munter, the PCAOB's Director of Registration and Inspections pulled together.
First, some housekeeping: The Board video-recorded this interview between National Associate Director Renee Phalin and Ms. Munter this past summer. Collectively, the videos were a bit long so we opted to publish the transcript of their conversation instead. The dutiful ethics team over at the Board also wants everyone to know that, "Helen Munter is speaking for herself and the views she expresses are her own and do not necessarily reflect the views of the PCAOB as a whole or the Board or staff of the PCAOB."
Finally, I'll note that this transcript has been edited for clarity. If you'd rather watch the series of videos,
we will link to them as soon as they are live. UPDATE: You can watch them all here.
Q: Why should someone be an inspector?
Helen Munter: You should be an inspector if you like audit, if you enjoy the work that you are doing, you enjoy the challenge of that work, and you understand the importance of the audit to the capital markets. Anyone who likes audit I think would like being an inspector, and I think it's something that you really should consider as a career building opportunity.
Q: What is the profile of typical recruits the PCAOB considers for inspector positions?
HM: When we go to hire an inspector, we are looking for former auditors. We are looking for people who have worked at the audit firms. We hire mostly from the Big Four, but we hire from other firms as well. And we want people who have had direct experience. Our minimum standard requirement is five years of experience, so just promoted to manager on up, and hire people all the way up through retired line partners, people who have had experience in national office, people who have worked on significant quality initiatives at the firms.
Hiring a mix of people at different levels with deep experience in auditing and deep experience in certain very technical fields allows us to do the inspections in the field of the issuers that you are currently auditing; and to be ready for the task at hand when it comes time to engage with really qualified auditors like each of you. We want people who have good industry experience, especially in highly-technical areas like financial services or broker dealers.
We want people who have great communication skills. We want people who can write well. We also want people who can engage in a meeting with firm personnel, and engage in a meeting with people on your own inspection team. We want people with good opinions who can develop good support for their opinions and be active participants in the process of inspection. That's really what we are looking for.
Q: What if I'm under qualified? Do other factors aside from experience and title matter?
HM: Everything matters when it comes to getting the next job, whatever that might be for you. For us, the absolute minimum is you need to have a current CPA license, and you need to have a right to work legally in the U.S. Beyond that, experience does matter, but if you have a strong interest in other special qualifications that would be important to us, call us, send us your resume, we'd love to talk whether it's for a position now or a position sometime in the future.
When we hire someone with five years of experience, we're looking for them to fill a position as an inspections associate. And an inspections associate is someone who spends their time primarily in the field doing inspections work, acting as a part of a team of people looking at a particular issue or audit, working on a particular engagement. Those people have the chance to pair with much more experienced and senior individuals including some of these retired partners, if you will, who have come out of the firms. So there's lots of opportunity for you to develop professionally, for you to develop technically here at the PCAOB, as there are at the firm you are at now. It is a different path forward, but it is in that sense very similar, a path forward with good, on-the-job training and development that will help you to advance your career.
Fundamentally, everyone should think of an experience at the PCAOB as an inspector as being career enhancing and career developing. And I think that's very important for anyone with a strong interest, contact us. We'd love to talk to you.
Q: Is there any preference for particular knowledge about particular accounting, auditing issues or industry?
HM: Great question, and a great way to tee up for me to talk a little bit about how we do inspections. When we staff an inspection, and I think all of you, I hope all of you have some idea of this, a big piece of what we do is we look at individual issuer audits and that is a lot of the work that you directly would be doing as an inspector for us. You can appreciate how important it is to have the appropriate technical knowledge and industry background when you're going to be looking at the complex audit in the field.
We want you to understand the nature of the work that would be performed in a certain industry. We want you to understand the technical accounting and auditing standards that apply to that audit. So absolutely, it is very important to us to source the candidates who have that background that will be necessary when you're in the field doing the inspections.
Specifically, financial services is always an area that we recruit heavily for. Broker dealer experience is in high demand at the PCAOB right now. I'm sure you're all familiar with, if you're in that industry, our interim inspection program for broker dealer audits, and this is an area that is growing for us. It is the area that is most growing for us. And we've got very specific needs for recruits in that area.
In addition, we're always looking for all kind of IT auditors. We're looking for qualified people who have spent time in the technology and communications arena and we're also looking for good, solid generalists, people who have worked in a variety of industries, people who have the chance to have experience in companies, in retail companies, in manufacturing, companies in development stages, and experience with equity transactions. Lots of different backgrounds will be successful here at the PCAOB. And we're looking for all of those sorts of candidates.
Q: Are pay and benefits of PCAOB comparable to what public accounting offers?
HM: Great question, and it's a question that I know anyone wants to understand before they come interview for a job. We're really lucky here at the PCAOB. When we were created, Sarbanes-Oxley, the law, built into our structure the idea that we would pay a market rate of compensation. So yes, we pay market rate of compensation. How do I know that?
I know that because when I hire people from the firms, from the Big Four, I usually give them a raise to come here. That allows me to sort of have a check going on real time as to whether or not the compensation that we offer is truly a market rate of pay. But it's also very rewarding for me to understand that when people leave the PCAOB, leave a tenure as an inspector, they are able to translate that experience in the market in a way that is very additive to their career. I think it really demonstrates the value that one receives by spending time as an inspector, by investing in the overall contribution to audit quality, demonstrating a commitment to investors, demonstrating a commitment to public service in a way. And all of that is very important.
And I think as a recruit, you want to understand that whether you choose to spend the rest of your career at PCAOB, or this is a stepping stone along the way to different opportunities, your time and experience here are valued in the market place, and that's a very important thing to be understood.
In addition to pay, we have good benefits. The benefits that we offer, I think, are very comparable to the benefits that you have at the firm. It's a nice, rich package of benefits. Big difference, you have the ability to enjoy the benefits that we offer when you work here at the PCAOB. We work, and we have life. To us, work life balance is just that. It is work, but we're really working hard on an inspection, working well as a team, coordinating, interested in what it is that we are doing and focused on that. And when we're not working, we're not working. And to me, that's a really, really important difference between the job at the PCAOB and the job you're currently doing as auditors.
When I was back at the firm I worked in the San Francisco office, and I, from there was really lucky. I made it to almost all of my kids' games. I made it to almost all of their little shows in kindergarten or what have you. And I spent the entire time in the taxi on the way there, the entire time at the field checking my email, and making sure that no one really noticed that I wasn't, in fact, in the office.
When I'm here at the PCAOB, I travel. I do other things. I can't make it to every game, but when I'm there, I'm there. I never check email. I never am worried about what fire is going on back at the office. And that is very, very different. It's very relaxing. When I'm on the weekend, I don't really check my emails hardly at all.
I remember the first time that I went on vacation once I had started working at the PCAOB, you know, I let everyone know I was going on vacation. I put out the extended absence greeting and then I made a ton or arrangements with the IT group — I was traveling internationally — to say hey, I want to make sure I can get all my important emails and calls. I gave everyone ten numbers where they could contact me.
I realized after four days the phone hadn't rung and the only emails that I had received were the general news updates. And I was kind of disappointed, you know? I was kind of like whoa, I guess I'm no longer an important person, because I'm gone on vacation and nobody cares.
But it is incredibly refreshing to recognize that the world goes on without you. You can go on vacation and no one is going to call you. We know when you're coming back. When you come back we'll be in contact. We will get something done. It's really nice to have time off that is time off and it is your own time. Think about that when you head out to dinner tonight and start checking your email before dessert comes.
Q: Is there a lot of travel with the PCAOB?
HM: Again, very practical, very great question. Let me start off with the question about travel. We do our inspections of individual issuer audits, frequently, we do those inspections in the field. That means that this is a travel job. People do spend a certain amount of time traveling. We monitor it. We care about how much people travel. We found that on average an inspector travels about 20 percent of the year.
And when we travel, we're spending usually a week in the office of the firm, looking at a job. That means that you fly out on Monday morning. You fly home on Friday afternoon. And you're gone for that set amount of time. That's a burden to you. Doing the work that way, though, allows us, and allows you as an inspector to really have a chance to collaborate together with the other people who are on your team, to work closely work with the engagement team and to get a lot of work done in a very concentrated period of time.
When you're not in the field doing inspections, you're working on your inspection, if you will, and other things that you will be assigned, from whatever office you are assigned to. We have regional offices in eight cities around the country. We have another five or six satellite locations around the country. So we have a lot of opportunity for you to work for us from wherever it is that you currently live.
Those assignments are all done at a national level. So we make assignments without regard to team assignments, without regard to where you live. And that means that everyone has an equal opportunity to participate on the different inspections that we offer. We have great tools that allow for remote work, that allow for collaboration. It's done in a virtual fashion, whether it's via videoconference, phone conference, or just working together on shared documents over the web. Through the cloud is probably the right way to say it at this point. So we have lots of opportunities for that.
When you take a job as an inspector, you should understand that you will be doing a fair amount of traveling. I've found that for many people, we recognize up front that this is a travel job. Lots of people tell me that they were traveling as much or more at [their] firm when they add together all of the different trips that they took. I think the real difference is one of mindset. We go into this saying I'm taking a travel job. It's part of what I do. I'm going to be traveling certain weeks out of the year, and it tends to be concentrated in certain time periods.
When you're at the firm, you don't necessarily think that you have a travel job, although you might travel for your job. So as you think about the question about can I handle a travel job, you should just reflect back on the last year, the last couple of years. You should add up how many nights did I spend out of the office? How many nights was I not at home? And you kind of figure out what that means to you, if you will, if you get to spend a few hours at home, are you really at home? But figure that out for yourself and then that might cause you to think differently about whether or not you are up for a travel job.
Q: How many hours do inspectors work in a given week?
HM: How much you work in any given week will really depend on what it is that you have in front of you to accomplish for the week, what is it that your team is working on, and what is the related important deliverables. I think one of the real things that a job as a PCAOB inspector offers is time. And it is time to do the right job. Time to do the job that you think, that you know you need to do.
We want you to pursue the issues that you think are most important. We want you to have the time to get through the work, to do the appropriate documentation, have the communication, and we want you to have time to think. We want you to have time to think about whether something really is an issue or really is not. And if it really is an issue, who might you consult with? Who might you collaborate with? I think that's a big difference from at the firm. We don't have clients, so we don't have those sorts of outside influenced deadlines.
We're serious professionals, so we have time lines that we are interested in following when we engage with firms. I have a lot of respect for the firms that we engage with. I want to be able to treat them with a lot of professionalism, and do our inspections in a way that is predictable and understandable by the firm. So it's important to us that we be productive, but there will always be issues that take a little extra time. And from our perspective, that's a good thing. And that's something that we really want every inspector to understand. Time is on your side. Take the time you need to do the job that should be done. Because at the end of the day what we really care about is quality. We care about quality. We care about consistency and we care about getting to the right answer.
Q: Are there international assignments or opportunities?
HM: We do about 100 inspections outside of the U.S. each and every year. And lots of people work on those inspections. We care about whether you're interested in working on non-U.S. inspections. It's a question that we ask you early on because it's the sort of thing that is, in a sense, very personal.
Some people really love to go abroad, do inspections, experience a new culture, work in a different country in a different environment, and they're excited by the travel and those opportunities that go along with it. Usually, when we do those inspections, they span the course of two weeks, so you have that weekend in the middle and you can take advantage of different cultural opportunities wherever you find yourself around the world.
Others are a little intimidated by the idea — and intimidated is probably not the right word. Others are just really not interested in going around the globe to do the inspections, but we find that there is absolutely enough of an interest that we're able to let you tell us whether this is something that you would be interested in doing.
When we send people out to do inspections around the world, lots of times we are lucky because many of our inspectors have language skills that they bring to the table. We have about a hundred inspectors on staff who speak another language, which is a fairly incredibly diverse group of people who we're able to hire as inspectors. Not everyone comes to us with those language skills. We also have a program where we help inspectors ramp up their language skills, whether it's through some sort of an online course, or a coach who helps them to focus on their language skills and bring up whatever skill level they're at so that they can more effectively engage with the firm and be comfortable in the country where they are traveling to do the inspections. So that's something that's important to us.
When we do international inspections, especially when we're talking about inspections in various European countries and some of the Asian countries, we frequently will do those inspections jointly with a regulator from that other country. And this really presents an interesting dynamic for inspectors who are doing this kind of work in the sense that they are ambassadors. They're working both a regulator-to-regulator level as well as a regulator-to-firm level. So it's very interesting from an international cooperation sort of perspective.
And I have a lot of great feedback about what people have learned about not just in the specific audit that they looked at, but a country's structure and a country's governance process and gives a lot of interesting insight into how business is done in different countries and different cultures around the world.
I know when we've gone out and done these inspections ourselves, and the idea that we would actually do these inspections in these foreign countries ourselves was a big decision that we had to make early on. I think that it was absolutely the right decision to say it's important for PCAOB inspectors to travel and to do the inspections and to look at the work papers.
We learned a lot that culture matters when it comes to audit and business. And we learned that sometimes we have an expectation here in the U.S. that some things are very routine, like cash confirmations, right? You've all seen a cash confirmation. You've all gotten a cash confirmation, probably one of the very first things that you did. And we have a presumption that a cash confirmation is just standard. So low risk to be almost non-risk.
You get out into other parts of the world, especially parts of the developing world, and you learn that a cash confirmation isn't always what it seems. So we learned a lot. We've educated ourselves. We educate our inspectors. We've had great conversations with firms at a global level about the problems that are associated with differing risks in various jurisdictions around the world and how firms might work to address those. So doing international inspections is really a chance to see how in the different parts of the multi-national corporations that have financial statements and audits come together in a very hands-on fashion. You learn a lot about the differences and a whole lot more than you ever learn when you're back in the U.S. looking at a memo related to a firm's work that was done by some auditor in some location around the world.
So it's a really great experience and I think that it helps to — I think it really helps you to grow and it helps you to have a much better understanding that will have a likely impact on your career, especially to the extent that you wind up many years from now doing something with a multi-national sort of an organization. So it's a great experience and it's a great building experience from that perspective.
Q: What kind of career path options are there within the PCAOB?
HM: Career path and career progression are extremely important to everyone in [the Division of Registration and Inspections ("DRI")], to everyone working at the PCAOB. And they're truly important to you, as you're at the firm. That's part of why you're watching this video. You want to understand what are the other career paths and career progression opportunities that are out there?
Here at the PCAOB we are a different organization than the firms, certainly. We are a much flatter organization. We have fewer levels and the advancements that we have has a lot to do with experience. And we are very focused on helping everyone to have a richer experience professionally, to be more engaged in the work that we do and more engaged in their personal assignments. Because we believe that that experience building, internal resume building, if you will, is what really makes this a career additive place to work.
One of the things that we offer to everyone is a chance to work on different sorts of assignments while you are at the PCAOB. So we have three different inspection programs within DRI. We have our global network firm program [("GNF")] where we do the inspections of the largest firms here in the U.S. as well as their affiliates all over the world. And it's a great way for us to be organized. It's a great way for inspectors to learn a whole lot more about how a firm works than you ever learned working at a firm, which is a really interesting dynamic and an interesting thing to say. But I know that I've learned a whole lot more about how an audit firm works than I ever knew when I worked at an audit firm.
We also have our non-affiliated firm program and that program is just a great work force place to be, incredibly diverse experience. That's a program that is responsible for doing the inspections of the firms that audit issuers that aren't in that GNF bucket.
So here you're dealing with a sole practitioner and you're dealing with national firms with a lot of issuer clients, a lot of complex practices, offices all over the country. So it's a huge variety of type of firm in this group that we bring together. So people who work on this team have a chance for a very diverse experience even within a single year, working on very small inspections, working on very large inspections as well.
We also have our interim program for the inspections of brokers and dealers. I have to say, this is a great program. It's a great team. And it's a very unique group of people. If you have experience with brokers and dealer audits, give us a call. This is a group that you really do want to talk to.
I had a chance to meet with a lot of the people in this group. I was in New York visiting just a couple of weeks ago. So we got together and I was just amazed at what a close and cohesive team they are, and I'm always impressed at how well they collaborate and come together on different and for us, somewhat unusual sets of deliverables. It's a chance to get in on the ground floor of a developing program.
We expect to move in to a permanent program at some point next year, but people who are on board right now are all working hard in a very hands-on fashion to shape what the program will be. And they really have this chance to influence the development of the program and make a difference in a way that lots of people had that opportunity to be so hands on than 10, 12 years ago when the PCAOB's issuer programs were newer. The broker dealer people, everything that they're doing or a lot of what they're doing is new today. And it's a great chance to get in on that ground floor.
I'll come back for a second to the other programs, the other inspection programs that we have and talk for a second about in innovation because innovation in inspection is a real thing. Innovation in inspection is something that's very important to us. We spend time every year thinking about what we do and how we do it, and how could it be better? How could it be more meaningful and how could we better communicate the results of our inspection to the outside world?
Innovation is an area where we rely a lot on new people, new people coming in looking at what it is that we're doing and saying hey, have you considered doing it this other way? And we've gotten a lot of great ideas over the years from our newest people. And those come from people who retired with a ton of experience and people who retired with relatively little experience. But the way we team and the way we have these project groups that focus on things like innovation, everyone at the table has a voice. Everyone has a chance to raise an issue, to submit an idea. We're small enough. We're young enough. We've only been around for 12 years, that we're able to be nimble.
We're able to take good ideas and put them into execution and roll them out in the next cycle. And I think that that idea of a contribution and being able to see an organization make a change, make your change is something that people find really rewarding.
Q: What assurance can young aspiring PCAOB inspectors have that, should they decide not to make a career of it, they walk away with a sufficient skill set and pedigree to compete elsewhere? And where do they tend to go?
HM: I'd love for everyone who joins the PCAOB as an inspector to make it a career and you can make it a career. There is a career at the PCAOB and for a lot of people this will be what they intend to do between when they join us and when they retire. For a lot of people, though, it won't be. And I think that for a lot of people today, I know certainly when I joined the PCAOB, I wasn't thinking about what is the job I want to do for the rest of my life. I was making more of an intermediate term decision in terms of something that I thought would be engaging and rewarding. Time has proven that to be true.
It's very important from a recruiting perspective for everyone to understand that time at the PCAOB is additive to your career and is additive to your resume. When people leave the PCAOB, they go to take good jobs and we have people going back to the firms and we have people going back to the firms to take jobs many times focused on areas that we have developed in a certain sense.
We have a program that is with respect to root cause, and firms have programs that are with respect to root cause. I've had people go back into a firm and take a job like that. I've had people go back into firms, take jobs in national offices, take jobs as partners, and take jobs being auditors. And I think that their experience on the inspection side where they've had a sense to talk to the standard setters on a real time, every day basis, you walk away from the PCAOB knowing a whole lot more about audit than you ever knew as an auditor. And that's something that I think is really, really interesting.
Here, you learn how to audit. You learn what the standards mean and the importance and significance of the standards to be overall audit process. I've also had people leave the PCAOB and take jobs as consultants in different industries. And I've had people take jobs in forensics. And I've had people go back to companies, operating companies and work in financial management, work in internal audit and work in transaction services sort of positions. So it's a variety of experience that people have had leaving here, but people have left to take good jobs. It's hard to argue with that.
When I hear someone is thinking about leaving, I'm always very interested and this was true when I was at the firm, too. I'm always very interested to understand what it is that they're going to do and why do they think that — what does that give them versus what they have here. I want to know that so I can think about do I need to change in any way or try to adjust for some of that here. But to the extent that I know people and we're small enough that I know most of these people. I know a lot of these people. Really trying to understand does this seem right? Does this seem like a good fit? And when it does, you're always very supportive. You like to see someone take advantage of a great opportunity.
Q: What's made a difference to you during your tenure at the PCAOB?
HM: What's made a difference? You know, if I had to say what's made a difference to me, it's the same thing that probably brought me to the PCAOB to begin with. I joined the PCAOB because I liked audit. I liked the more quality control side. I didn't want to move. And I really appreciated the peer group that I had at the firm.
I came to the PCAOB and I got to keep all of those things, most importantly the peer group. Most importantly the people. I have really enjoyed the chance to work with and team with the same sorts of people who I knew at the firm, people who are very focused on professionalism, who are very focused on quality, people care about their job, and also care about making a difference.
I've also really enjoyed the chance to sit next to and get to know better people outside of inspections. I've had a chance to collaborate very closely with the Office of the Chief Auditor. I understand who the standards setters are, and I feel like I have a chance and I think all inspectors have a chance. We engage with people in the standards setting group on a regular basis to talk about what is it in the standards that we find difficult to deal with, what is it that we see auditors struggling with, and influence a bit the standards setting agenda in terms of things that we think are important and the things that we think would make a difference. And I think that that is very important.
I've also had a chance to get to know regulators from other agencies, regulators from around the world. We have the opportunity to participate and when these different groups come together, there's a group called the International Federation of Independent Audit Regulators, a mouthful, I know. But that is the IFIAR group, so this is an international group and they meet several times a year and it's really a chance to talk about common issues and common approaches to issues, ensure bilateral cooperation continues, and it's improved, and really make a difference in that regard.
The most important thing that we have, the only asset we have are our people and that's the asset that we absolutely care the most about. We really want to invest in our people. We want to invest in our people from a salary and benefits perspective. We want to invest in our people from a training perspective. And we want to invest in our people from an experience and engagement perspective. We want anyone's time at the PCAOB to be rewarding, to be of high interest, and people come to the PCAOB because they care about what we do. They care about the mission. They care about audit quality and they care about investors. And that is what keeps them at the PCAOB, the ability to address those needs with a group of similarly minded and engaged people, high professional with good time to enjoy everything else that is important in life.
If you're interested in a career as an inspector with the PCAOB email [email protected] pcaobus.org.