When did you decide you were done with public accounting? Not the moment you decided to accept an offer to go work somewhere else, but the moment you decided there wasn’t a snowball’s chance in hell you would stay—the moment that cemented the decision to start looking for the right opportunity to get the hell out and never look back?
My moment of full clarity came at the tail end of a PCAOB inspection.
Before the inspection
Four months before the inspection, one of my large public clients went through a merger and we lost the audit. Suddenly my schedule had open time. Another public client in our office gobbled it up for some needed manager-level review and supervision. The total engagement went well over 7,000 hours—I contributed a whopping 53. Yet when the job got picked for PCAOB inspection, I was expected to show up at the office from 7:30 a.m. to midnight for two and a half weeks in the middle of the summer because I was “part of the team” and had charged more than the 10-hour threshold to the engagement code.
For two and a half weeks the firm gave us breakfast, lunch, and dinner, cleared us from any other client responsibility, and even reimbursed us for parking in the underground lot right at the office (I mean, talk about rolling out the red carpet for the team, right?). A team from the firm’s national inspections group flew in to work directly with us. They role played as inspectors and ripped us all apart for all the stupid things we either included in or excluded from the workpapers.
Going into the inspection, the strategy was simple—put the seniors in front of the room to present on each audit area. They would then field any questions from the team of five or six PCAOB inspectors. If the inspectors so much as hinted at digging into an issue, the seniors would tell the inspectors that we would circle up as a team and bring a response back to them later. If the seniors said anything “wrong,” then the managers could walk it back during the next meeting. If the inspectors didn’t like what the managers said, the senior manager would “correct” the story. Finally, if the inspectors still had issues, the partners would have one last chance to “clear things up” (it never came to that for us). The other manager and I were told we could jump in if the senior was struggling with a question, and we could clear it up on the spot before the inspectors latched onto it as a “big issue.”
On the second day of the formal inspection, we sat in the largest conference room in our office with four or five PCAOB inspectors, our full audit team, and three or four “observers” from our national inspections group. The topic of the day was revenue—the one area I had reviewed and been most involved in during my 53 hours on the audit. Tyler, our lead audit senior, stood up to present. Everything went smoothly until the PCAOB inspectors started tugging at a thread. On the second follow-up question, Tyler started to give an answer and then stopped, changed direction a bit, and then stopped again.
I started to speak up—I could bury the question and issue in two sentences. Suddenly, somebody kicked my chair from behind hard enough that it rolled a few inches, pushing me hard into the table. I turned to see who kicked my chair. Mark, one of our national office “observers,” hovered over me and then leaned down to get right in my face. “I DON’T WANT YOU SPEAKING RIGHT NOW!” he exclaimed in an agitated whisper.
My entire world went into slow motion. I looked across the table at the line of PCAOB inspectors, completely unfazed by the incident, keeping themselves postured and smug as they plowed right ahead in their effort to uncover any kind of dirt they could. I looked at Tyler and the other seniors in the front of the room doing their very best to follow the instructions from our national office team: short and direct answers, direct eye contact with the inspector who asked the question for the full duration of the answer, telling them the team would follow up if he did not know an exact answer.
I looked down my side of the table: the other seniors scrambled to take notes, the other manager and senior manager stoically gazed toward Tyler, and the audit and review partners at the far end both stared at the table with their heads slightly bowed—silently praying to the auditing gods.
What was I doing?
Mark wasn’t the only thing that hit me. This was all just an elaborate façade, a political chess match. The inspectors sat on one side of the table desperately trying to find something wrong to further validate the need for the PCAOB and elevate their own personal relevance and notoriety within their organization. We sat on the other side saying as little as possible in the most eloquent and calculated way we could come up with. Distraction and misdirection were our two best friends. There was nothing objective about the inspection from either side of the table. It had so little to do with the actual auditing and everything to do with presentation skills.
We knew exactly where we had holes in our audit. We knew precisely what the PCAOB would take exception to. We had spent more than two weeks crafting responses to defend what we had done, including contingent responses and backup angles to spin the story in whatever direction needed to pass. The longer we could keep those open questions spinning (as long as we kept solid answers in our back pocket), the less time the inspectors had to look into other areas more carefully. After two and a half weeks of preparation I couldn’t even give a simple answer to resolve an issue because it went too far off script, and I was physically battered in front of the entire room for doing so.
At the end of the day, we passed the inspection with flying colors. The firm’s only “thank you” to the team was to take us away from family and friends for another four hours to attend an overpriced, undercooked steak dinner where the partners told us what a great job we had done and congratulated each other for the clever “solutions” they’d come up with to avoid any inspection findings during the whole ordeal.
In those moments, I lost all respect for the firm I worked for, the system, the PCAOB, and the integrity of auditing. I patiently waited for my next promotion and the right opportunity to come along, left the firm, and never looked back!
About the author:
C.P. Aiden is a former Big 4 assurance senior manager who bounced between public accounting and industry three times during the past 15-plus years. After leaving public accounting for good, he wrote and self-published The Good Audit (sequel coming soon), a satire about a first-year audit engagement that pokes fun at the work, life, and culture inside today’s largest public accounting firms.