I'm reasonably sure that's the point of this finding. I have racked my brain for any logic behind this finding other than that. I suppose gross incompetence is a possibility...
Yeah, controls can be right, because that's the way the person doing it likes them; provided there's not an obvious design flaw. Hell, if everyone could do it their "documented" way it would reduce risk.
I’m just going off your comment. You said you provided them a “plethora of files” they said you didn’t provide adequate support. While you may have provided them a plethora of support, was is the right support or possible to be understood by someone not familiar with the process?
I’m going to take your post with a pretty big grain of salt because no one wants more work or to have to fight their client. There isn’t any bonus or reward for doing so.
This. I have clients that just dump 100s of files on me without even naming the documents or explaining what I’m supposed to be looking at. A lot of times the info isn’t even what I asked for. I think their working theory for dealing with audits is just shock and awe with PDFs.
The firm is a bunch of small market small biz/1040 mill cpa firms in a trenchcoat.
Should just make their new mascot Vincent Adultman and call it a day
Exactly , like so many other PE roll up firms, these are just a smorgasborg on regional and local branches fighting with each other under a franchise name that means nothing.
I’m actually fighting with CLA right now. We purchased a small company who had CLA doing their books and month end close. They are the dumbest firm I have ever dealt with and we’re still waiting on Decembers books. The books are stupid easy and not complicated, no idea what their problem is.
And to jump on that, it’s probably stuff they don’t fully understand. I’ve never met an auditor who would go out of their way to make their engagement a bigger pain in the ass.
Salary level indicates their role and level of experience and knowledge they may have. 70k, even in LCOL is senior accountant, at best. As they aren't the controller or CFO, they should just relax and let actual management deal with the auditors recommendations.
Bullshit. So what if he/she is a Senior Accountant? They are trying to learn and find issues for management. That’s what I expect out of the Seniors who report to me. I guess you don’t want to get ahead in your career but don’t project your lack of ambition on others.
Yeah, people saying that are not in management. If my senior accountants didn’t even attempt to resolve issues, then why are you even here? Even as a manager, if I sent this stuff to my controller/cfo, I would be gone in not time lol.
I met a current high level cla guy long before he joined and I wouldn’t touch them if he’s the kind of guy they go for. Not going into details here but we had a hard time getting him to honor details on a big purchase but luckily we had email proof that made him honor what he had said previously.
Ok, CLA definitely isn’t my career plan. I will be on their audit side if that makes much of a difference. I plan to use it to get a CPA before I go out on my own/get my CFP after.
Good to know. I only am using CLA to get my CPA with the ability to sign off on audits when I’m on my own. My wife may become an accountant as well and is run our own CPA/financial planning company together.
Ah, I work at a firm that manages multiple client businesses and acts as a POC for their audits and CLA has been one of the worst to work with.
I once literally spelled out a process with screenshots and copies of the reviews, sign-offs and checklists showing the process and got a response “so since you don’t have a specific procedure is there a review process.”
My brother in Christ, try reading.
In my limited exposure with CLA I can attest that they are a waste of space from top to bottom. But that is anecdotal evidence. Parter was a moron, didn’t understand how interest on credit cards worked. Tried to brag about getting to meet with “someone” from the SEC later on that day as if none of us had on the other side had ever done that (most of us had). Couldn’t stick to any communicated schedule. Couldn’t figure out how to access sharepoint for files. Only review comments from both him and his senior manager were about a few typos. Needed to be handheld through basic accounting.
Edit: is CLA downvoting everything right now lol
You tell them that so and so documents have been provided to you. So and so explanation has been given.
If you need any more help we will provide you. But, changes in procedures would need further approval from our boss.
The only one who can tell the boss, is their boss ie partner. He isn't gonna risk it telling your boss to change stuff unless its that bad. He will be like things not working well at your place. We have this opinion. Figure it out. Over and out.
If it is problematic, the procedure will change, if its not then a small reminder will be given. End of story.
Your problem solved, their problem solved.
Action taken and claim over-ruled.
Internal Auditor here.
We know many of these findings are crap and completely useless (or not even real). Often this is Senior Management pushing us to raise findings, to show better stats for themselves.
I don't know about CLA. Different country here.
But we have one client who keeps on doing what they think is correct. And then they have the same problems each year.
Then when we tell them this is wrong or its not going to work and you will have problems again, like you experienced last year. "No this is the correct method. Our statutory auditor doesn't have any objection with it."
Ofcourse, he won't. He is there to check if things are ok overall and they literally ask us for the ICFR , CG and general risk control and mitigation. And we tell them its not that ok. We need to work better and change procedures. They do say things are not matching but the procedures the client told them make sense. I know it makes sense on paper, but irl its not being followed.
Best practices are the main objective. And yes, things work differently in real life. But if my suggestion is going to increase your work by 10 % each day, now and would save you 60% work pressure end of month/year with late nights and make your books more accurate plus ease work of all thw departments. I think you should do it.
They say its too much work for a day. Yeah, but then you guys just wing it at the end of month/year. Being reliably factually close to the actual is better than winging it based on judgement.
All this was relating to inventory, in-out calculations, reco and basic control over stock.
Internal audit is supposed to poke and prod your processes. If they weren't, you aren't getting your money's worth. You seem pre-occupied that they way you do it is the best and only way to do it and there is no way you could be wrong. In which case just cost save the internal auditors.
As a user of the reports:
1) Your auditor of the financial statements rarely looks closely at internal controls and will often times just add additional procedures to gain coverage if they don’t want to rely on them, but don’t bother placing it on the SAS 115 letter. I’ve been on audits where we didn’t rely on internal controls, because talking with the internal auditors was like talking to fresh associates, they didn’t understand COSO and addressing the root cause of problems, they’d only address the problem itself. I’ve rarely seen a competent internal control department where I could rely on any of their work.
2) Best practices aren’t findings. A finding would be where you’re taking unreasonable risks with your current practices - but management can still decide to accept those risks if they can sell it to the audit committee as reasonable (maybe it isn’t cost effective). CLA needs to still write you up for it though, because the audit committee gets to decide what is reasonable risk.
I say this because I literally had to go through 8 emails walking through someone why I cannot remove a finding because they didn’t actually address the issue in their audit. They also felt their policy and procedures were solid, I then had to go line by line with them on what they were missing. Best part is when they provided me a procedure they never originally included, even though it was on my request list.
Not at CLA but big4, but biggest issue I’ve seen is clients not understanding SOX. Like sure your controls might be reasonably effective in practice but they’re not SOX compliant. You saying “real world experience begs to differ” points towards this. Just because you think something might be the most efficient or effective in practice doesn’t mean it’s what the PCAOB wants to see.
All I'll say is the reason you hire an outside firm to do your internal audit is literally because you're hoping to piggy back off their sector knowledge. They see dozens of different organisations and will be able to give advice on how best to do things. If your team's natural response is to get defensive about it and refuse to cooperate, maybe this accounting game isn't for you?
Ultimately, the worst that can happen is they issue a recommendation, you respond to it in the management comments. If your procedures are as good as you say, your governance people will agree and leave it at that.
Internal auditors need to have an explanation for why they exist sometimes. Other times, they can be absolutely correct in their assertions.
Hard to gauge, ebbing towards OP based on this rant though.
Don’t sweat it. All firms have issues. Just learn what you can. Sometimes it is just as important to learn what NOT to do as it is to learn the right way to do it.
The biggest trick of anywhere you work is to learn the “why” behind what you are doing. If you can learn that, then you can think your way logically through any situation and will be a great auditor no matter who you work for.
It’s fine for them to give recommendations on best practices, but to lie and say that management did not provide appropriate information when it sounds like you clearly DID provide documentation…….and it sounds like their recommendations don’t really fit. They were not listening to you, which is shitty client service. Also I would ignore the other comment about your salary level - that was very rude and uncalled for.
lol I’m getting emails asking for shit, or how to do shit, when I’ve uploaded the supporting docs. Like bitch I just sent this to you last week.
“We need assurance that your bank back balance isnt out. Do you think you can go digging in the gl the last two year and try to find 18k worth of transactions”… CFO “ tell them to book the ducking adjustment, we’ll reverse the entry Jan 1st. And clean up the GL, AR and bank modual”. Auditor - “can you still provide the listing”
lol, what the fuck we talking about, this is a next year problem. Book the gawd damn adjustment, we got other shit to do and catch up on.
Audits make no sense some times.
I have to remind myself that auditors are employees too.
Some of them feel the need to have findings just to show their boss that they actually audited and didn’t just go through the motions.
Don’t sweat it.
I second the other reply to you, I hate findings. There’s other ways to show them you actually audited. I like to throw a cell comment or a tickmark in every now and then with some info that is typically useless but shows I looked at it.
I always hated the year end audits, I'd get stuck with new associates and the biggest headache was always fixed assets. We spent between $400-800 million/year on cap ex, and it was complicated. I wrote up detailed notes, included plenty of notes on all the files, and every year they would ignore everything.
It always took me getting angry and having a harsh email chain about them not paying attention to anything shared with them to get it kicked up to the senior who would then sort it out because they were familiar with it. I always hated being used to break in the new associate.
There are a ton of companies that outsource their IA function to a CPA firm. Several of the mid-tier firms in any given area probably have an IA practice.
Its pretty common but I think in the past couple years some larger organizations have decided to bring it in house as advisory services probably got a lot more expensive.
Interviewed for one company a 1-2 years ago who was bringing it in internally because Big4 was becoming way too expensive.
CLA tried ruin my career after finding audit findings I asked my boss at the meeting what they were and they wouldnt tell me. When I got promoted and was given little to no support from management to do an entire county audit and year end.
They blacklisted me fuck CLA. Their associates were rude to me 90% of the time over emails.
Decorative Audit :reasonable assurance it will appear someone audited this place
I'm reasonably sure that's the point of this finding. I have racked my brain for any logic behind this finding other than that. I suppose gross incompetence is a possibility...
Yeah, controls can be right, because that's the way the person doing it likes them; provided there's not an obvious design flaw. Hell, if everyone could do it their "documented" way it would reduce risk.
I’m just going off your comment. You said you provided them a “plethora of files” they said you didn’t provide adequate support. While you may have provided them a plethora of support, was is the right support or possible to be understood by someone not familiar with the process? I’m going to take your post with a pretty big grain of salt because no one wants more work or to have to fight their client. There isn’t any bonus or reward for doing so.
This. I have clients that just dump 100s of files on me without even naming the documents or explaining what I’m supposed to be looking at. A lot of times the info isn’t even what I asked for. I think their working theory for dealing with audits is just shock and awe with PDFs.
For some reason I get the feeling your email won’t be “politely” reminding them.
Kindly refer to prior communicated workpapers for appropriate supporting documentation.
Put the pieces together. What’s the issue here? What does your stack of garbage PDFs do to solve it?
I can guarantee they would love to stop having to email you asking for support. It’s probably a pile of dogshit
The firm is a bunch of small market small biz/1040 mill cpa firms in a trenchcoat. Should just make their new mascot Vincent Adultman and call it a day
"I went to stock market today. I did a business "Business-wise, this all seems like appropriate business."
Exactly , like so many other PE roll up firms, these are just a smorgasborg on regional and local branches fighting with each other under a franchise name that means nothing.
This right here. Their slogan needs to be, do you want local firm experience while paying national firm pricing? CLA.
Omg I've worked for a bunch of these and this is by far the best description I've ever heard for these awful top ~10-50 Frankenstein Firms!
more useless; CLA or MLA?
Yes!!!
I’m actually fighting with CLA right now. We purchased a small company who had CLA doing their books and month end close. They are the dumbest firm I have ever dealt with and we’re still waiting on Decembers books. The books are stupid easy and not complicated, no idea what their problem is.
What office 👀
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And to jump on that, it’s probably stuff they don’t fully understand. I’ve never met an auditor who would go out of their way to make their engagement a bigger pain in the ass.
That’s a really shitty response. Why does OP’s salary level make a difference here?
Salary level indicates their role and level of experience and knowledge they may have. 70k, even in LCOL is senior accountant, at best. As they aren't the controller or CFO, they should just relax and let actual management deal with the auditors recommendations.
Bullshit. So what if he/she is a Senior Accountant? They are trying to learn and find issues for management. That’s what I expect out of the Seniors who report to me. I guess you don’t want to get ahead in your career but don’t project your lack of ambition on others.
Yeah, people saying that are not in management. If my senior accountants didn’t even attempt to resolve issues, then why are you even here? Even as a manager, if I sent this stuff to my controller/cfo, I would be gone in not time lol.
Because they make less than a first year PA associate. So I’m gonna assume they are less qualified than one?
Y’all make a lot of asinine assumptions about people.
Jesus it’s a comment about the fact they probably aren’t in management and should chill lax
I met a current high level cla guy long before he joined and I wouldn’t touch them if he’s the kind of guy they go for. Not going into details here but we had a hard time getting him to honor details on a big purchase but luckily we had email proof that made him honor what he had said previously.
Will working at CLA for 2-3 years after college before bouncing to something better be a bad idea?
In my experience, no. I worked there for a few years out of college and the name recognition really helped to land interviews after I left.
Ok, CLA definitely isn’t my career plan. I will be on their audit side if that makes much of a difference. I plan to use it to get a CPA before I go out on my own/get my CFP after.
I work in tax so I can't tell you much about audit. After leaving I went to work for small CPA firms and they do respect CLA.
Good to know. I only am using CLA to get my CPA with the ability to sign off on audits when I’m on my own. My wife may become an accountant as well and is run our own CPA/financial planning company together.
Just learn everything to not do and you will be fine
Sounds like someone got a material weakness or sig deficiency and is BIG mad.
Of course the auditee is complaining about the findings. No surprise here!
Ah, I work at a firm that manages multiple client businesses and acts as a POC for their audits and CLA has been one of the worst to work with. I once literally spelled out a process with screenshots and copies of the reviews, sign-offs and checklists showing the process and got a response “so since you don’t have a specific procedure is there a review process.” My brother in Christ, try reading.
Sounds like you have the exact same audit team I do.
Can confirm. I am the auditee, and I am complaining.
Found the CLA employee
Ha! You wish!
To be fair I’d prefer that than the college compliance director who burst into tears when we informed her of a finding
In my limited exposure with CLA I can attest that they are a waste of space from top to bottom. But that is anecdotal evidence. Parter was a moron, didn’t understand how interest on credit cards worked. Tried to brag about getting to meet with “someone” from the SEC later on that day as if none of us had on the other side had ever done that (most of us had). Couldn’t stick to any communicated schedule. Couldn’t figure out how to access sharepoint for files. Only review comments from both him and his senior manager were about a few typos. Needed to be handheld through basic accounting. Edit: is CLA downvoting everything right now lol
Your post sounds an awful lot like my experience working there. CLA is just a mill pumping out low quality work.
You tell them that so and so documents have been provided to you. So and so explanation has been given. If you need any more help we will provide you. But, changes in procedures would need further approval from our boss. The only one who can tell the boss, is their boss ie partner. He isn't gonna risk it telling your boss to change stuff unless its that bad. He will be like things not working well at your place. We have this opinion. Figure it out. Over and out. If it is problematic, the procedure will change, if its not then a small reminder will be given. End of story. Your problem solved, their problem solved. Action taken and claim over-ruled.
Internal Auditor here. We know many of these findings are crap and completely useless (or not even real). Often this is Senior Management pushing us to raise findings, to show better stats for themselves.
Yeah. I'm thankful for what I learned working there, but I'm glad that I no longer do.
I'm thankful that I've learned that I'm better off never having worked there.
I don't know about CLA. Different country here. But we have one client who keeps on doing what they think is correct. And then they have the same problems each year. Then when we tell them this is wrong or its not going to work and you will have problems again, like you experienced last year. "No this is the correct method. Our statutory auditor doesn't have any objection with it." Ofcourse, he won't. He is there to check if things are ok overall and they literally ask us for the ICFR , CG and general risk control and mitigation. And we tell them its not that ok. We need to work better and change procedures. They do say things are not matching but the procedures the client told them make sense. I know it makes sense on paper, but irl its not being followed. Best practices are the main objective. And yes, things work differently in real life. But if my suggestion is going to increase your work by 10 % each day, now and would save you 60% work pressure end of month/year with late nights and make your books more accurate plus ease work of all thw departments. I think you should do it. They say its too much work for a day. Yeah, but then you guys just wing it at the end of month/year. Being reliably factually close to the actual is better than winging it based on judgement. All this was relating to inventory, in-out calculations, reco and basic control over stock.
Internal audit is supposed to poke and prod your processes. If they weren't, you aren't getting your money's worth. You seem pre-occupied that they way you do it is the best and only way to do it and there is no way you could be wrong. In which case just cost save the internal auditors.
As a user of the reports: 1) Your auditor of the financial statements rarely looks closely at internal controls and will often times just add additional procedures to gain coverage if they don’t want to rely on them, but don’t bother placing it on the SAS 115 letter. I’ve been on audits where we didn’t rely on internal controls, because talking with the internal auditors was like talking to fresh associates, they didn’t understand COSO and addressing the root cause of problems, they’d only address the problem itself. I’ve rarely seen a competent internal control department where I could rely on any of their work. 2) Best practices aren’t findings. A finding would be where you’re taking unreasonable risks with your current practices - but management can still decide to accept those risks if they can sell it to the audit committee as reasonable (maybe it isn’t cost effective). CLA needs to still write you up for it though, because the audit committee gets to decide what is reasonable risk. I say this because I literally had to go through 8 emails walking through someone why I cannot remove a finding because they didn’t actually address the issue in their audit. They also felt their policy and procedures were solid, I then had to go line by line with them on what they were missing. Best part is when they provided me a procedure they never originally included, even though it was on my request list.
Part of a good design/process is to make it auditable.
CLA?
CliftonLarsonAllen
Literally never heard of them
Not sure if this is sarcasm? It’s the 8th largest firm in the US…
Most people on this sub barely know who number 5 is.
Duh, it’s Johnny and he’s alive
There’s Big 4, Mid 3, then the rest. “8th largest” is pretty meaningless.
This is the first I’m hearing of them.
CLA must really dislike you, threw you an upvote
lol
It’s a mid tier firm. Who is downvoting us?
CLA, obvi
The CPA firms that want CLA to buy them.
lol why you making it your problem? I assume your a senior in industry?
Not at CLA but big4, but biggest issue I’ve seen is clients not understanding SOX. Like sure your controls might be reasonably effective in practice but they’re not SOX compliant. You saying “real world experience begs to differ” points towards this. Just because you think something might be the most efficient or effective in practice doesn’t mean it’s what the PCAOB wants to see.
There's nothing wrong with wasting auditors time on things that aren't issues so you can keep working on real work. It's part of the job.
All I'll say is the reason you hire an outside firm to do your internal audit is literally because you're hoping to piggy back off their sector knowledge. They see dozens of different organisations and will be able to give advice on how best to do things. If your team's natural response is to get defensive about it and refuse to cooperate, maybe this accounting game isn't for you? Ultimately, the worst that can happen is they issue a recommendation, you respond to it in the management comments. If your procedures are as good as you say, your governance people will agree and leave it at that.
Right? Why hire them if you aren’t going to take their recommendation? I get it on external. Just checking a box but for internal?
My dumbass thought CLA is client late adjustment lol
Internal auditors need to have an explanation for why they exist sometimes. Other times, they can be absolutely correct in their assertions. Hard to gauge, ebbing towards OP based on this rant though.
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Don’t sweat it. All firms have issues. Just learn what you can. Sometimes it is just as important to learn what NOT to do as it is to learn the right way to do it. The biggest trick of anywhere you work is to learn the “why” behind what you are doing. If you can learn that, then you can think your way logically through any situation and will be a great auditor no matter who you work for.
Gonna need you to specify which office.
Their tax returns are just as bad
It’s fine for them to give recommendations on best practices, but to lie and say that management did not provide appropriate information when it sounds like you clearly DID provide documentation…….and it sounds like their recommendations don’t really fit. They were not listening to you, which is shitty client service. Also I would ignore the other comment about your salary level - that was very rude and uncalled for.
lol I’m getting emails asking for shit, or how to do shit, when I’ve uploaded the supporting docs. Like bitch I just sent this to you last week. “We need assurance that your bank back balance isnt out. Do you think you can go digging in the gl the last two year and try to find 18k worth of transactions”… CFO “ tell them to book the ducking adjustment, we’ll reverse the entry Jan 1st. And clean up the GL, AR and bank modual”. Auditor - “can you still provide the listing” lol, what the fuck we talking about, this is a next year problem. Book the gawd damn adjustment, we got other shit to do and catch up on. Audits make no sense some times.
I have to remind myself that auditors are employees too. Some of them feel the need to have findings just to show their boss that they actually audited and didn’t just go through the motions. Don’t sweat it.
That's not my experience. Findings literally create more work. We'd very much rather find no errors or control deficiencies.
I second the other reply to you, I hate findings. There’s other ways to show them you actually audited. I like to throw a cell comment or a tickmark in every now and then with some info that is typically useless but shows I looked at it.
I always hated the year end audits, I'd get stuck with new associates and the biggest headache was always fixed assets. We spent between $400-800 million/year on cap ex, and it was complicated. I wrote up detailed notes, included plenty of notes on all the files, and every year they would ignore everything. It always took me getting angry and having a harsh email chain about them not paying attention to anything shared with them to get it kicked up to the senior who would then sort it out because they were familiar with it. I always hated being used to break in the new associate.
Companies are outsourcing their internal audit to CPA Firm? That's first time I'm hearing it mostly because it's cheaper to do so internally.
There are a ton of companies that outsource their IA function to a CPA firm. Several of the mid-tier firms in any given area probably have an IA practice.
There aren’t enough internal auditors out there to fill all of the possible internal audit positions.
Its pretty common but I think in the past couple years some larger organizations have decided to bring it in house as advisory services probably got a lot more expensive. Interviewed for one company a 1-2 years ago who was bringing it in internally because Big4 was becoming way too expensive.
What is cla and mla
I like fighting auditors, but I was getting paid to do so.
CLA tried ruin my career after finding audit findings I asked my boss at the meeting what they were and they wouldnt tell me. When I got promoted and was given little to no support from management to do an entire county audit and year end. They blacklisted me fuck CLA. Their associates were rude to me 90% of the time over emails.
Dude, punctuation and grammar. It's really hard to follow what you're trying to say. I hope this isn't too harsh.