A common mistake many people make when it comes to the accounting profession is that we all sit behind desks all day add or subtracting numbers. Even worse, all we do are taxes and audit people for the IRS. Well, I try and give insight into my job every now and then since I do more than just sit behind a desk all day adding numbers and I don’t touch taxes or harass innocent civillans in my day to day job duties. Today we are finishing our tie out of my client’s Form 10-Q. Basically, in a tie out you make sure whatever numbers they are reporting in that filing are agreed to a form of support or backup. After this we get to move into year end mode. Basically, we have to close down our testing of controls and start planning our tests for year end. One of these tasks will be our physical inventory observations or PIO for short. PIOs allow us to test the inventory balance to ensure what they say they have in inventory actually exists and is in usuable condition (ie not damaged, spoiled, ruined, or obsolete). As an auditor in Houston I have been on quite a few PIOs because Houston has a ton of businesses and the Ship Channel where large containers arrive from overseas. In the past I’ve counted sheets of plastic, groceries, false teeth, and climbed oil tanks. Each one was interesting and I was able to learn something new. So there is a little more than numbers involved here. 
By far, the one that scared me the most was not the false teeth but the oil tanks. I never realized how tall those tanks are and how many steps are involved to get from the bottom to the top and back down again. I actually thought that maybe there were elevators that took you to the top. Boy was I surprised. I was very grateful that someone warned me before I arrived to wear a pair of work boots and I was able to find a pair to borrow. When I am planning our PIOs for this year, I will be recommending that everyone purchase a pair so that they can stay safe. In the cold and rain when I was climbing two years ago, I was so happy to have some work boots and not tennis shoes. Had I been in the tennis shoes I might have slid down the stairs and not walked down the stairs on my descents to the ground. If you need work boots for your job check out Workbootsusa.com as they carry many varieties to fit any budget.
I have always thought that Pirates were a thing of the past meaning that they were only in movies and television shows not actually sailing around the world right now. I mean really, I don’t think there are Captain Jack Sparrows just hanging out in the Caribbean Sea causing chaos with other ships.
Well after reading the news headlines last week on Yahoo and discussing with Mike one night after work, I stand corrected. Apparently piracy is still a major concern among shipping companies around the world. The pirates in the Yahoo stories were off the coast of Somalia and had taken over a rather large ship and were holding a standoff with authorities. Then Mike was telling me about how the client he is currently auditing just had a pirate “incident” back in August or September of this year. Mike was hearing from one of his staff who found out during a routine inventory observation so we don’t know the entire story first hand. Just that pirates attacked a container ship coming from Asia and they had to do some negotiating and paying off the pirates to get their ship and cargo back. We were wondering what the appropriate accounting treatment and disclosure would be on that. “Extraordinary item: Pirate negotiation fee” or maybe “Operating Expense: Pirates”. Either way we were both a little surprised at how wide spread this issue really is. Either way it is fascinating and scary at the same time.
I hate “connectivity” events that we have at work. These are events where a group of about 100 of us (normally 50 turn out) get together to connect with one another and discuss what is going on in the office and with our team. Usually the ice breaker, or team building, event is corny and not very value added. I actually dread these things and try my hardest to weasel out of going. Last time I was truly sick, another time I was on vacation. This time though I had no excuse and off I went this afternoon to see what this Drum Cafe thing was all about and why the partners were insistent that we have them come for a connectivity event.
Can I tell you that I had a blast! This is just a fan-freaking-tastic way to get a bunch of people together in a room and have fun (yes auditors can have some fun). You sit around as a group and you are given your individual drum and are taught different rhythms to mimic as a group from the Drum Cafe leaders. The whole time there is very little talking, just listening and trying to follow hand signals and keep up with your fellow coworkers. You learn that when everyone stops,listens to one another, and works as a collaborative group you can do great things as a team and make some awesome music. I am so glad I drug myself to the event today and experienced the Drum Cafe for myself. If you need a team building exercise you should really check into the Drum Cafe and their program. You will laugh and have such a great time. My only recommendation is not to pound on the drum but to tap it softly. It can really hurt your hands!
I have explained in many previous posts that I am a financial statement auditor not a tax auditor. I still pay attention to things that relate to income tax and taxes in general but I keep it at a high level. Today on Yahoo News! an article appeared that discussed how the head of the House tax-writing committee, Charles Rangel (Democrat - New York) admitted that he lied on his income tax forms and OWES the IRS over $5k. This just boils my blood. How are we suppose to expect ordinary citizens to properly report their income to the IRS when our own Senators and Representatives ignore the tax laws? The excuse is just pathetic - it was an innocent mistake. Umm how do you forget to report $75k of income on your taxes?!?! I see similar things every day on various message boards that I visit - Do I have to report this or that because it isn’t really that much. No wonder these people don’t think they have to follow the IRS rules. Their own Congressmen don’t! The IRS code really isn’t all that hard to follow even for a non-accountant. It clearly states that “any form of income from any source for any amount must be reported.” grr
As I have stated, I have no involvement in income taxes other than using Turbo Tax to fill mine out. I do know that it is fairly easy to fill out your forms and report your income using a program such as this because they ask you questions that lead you to answering the tax forms appropriately. A CPA worth anything would do the same. I think I will get out a few ink pens and write in my journal.
~ A frustrated auditor
As I sat in training this past week, a few of my friends (co-workers) and I were digging through our email archives to find the different email jokes that we have accumulated and saved since we started 3 years. In the process I found this doozey that was pretty darn funny. It is basically an “article” explaining how we auditors have nothing to do with tax season and why you may get a nasty glare if asking us for tax advice. I got a chuckle out of it and wanted to share.
Study: Auditors’ Busy Season Has Nothing to Do With Taxes
Indiana, PA – A study released Tuesday by the Indiana University of Pennsylvania’s Center for Employment Research provides irrefutable evidence that, contrary to popular belief, an auditor’s busy season has absolutely nothing to do with taxes.
“I’m just as surprised as the next guy,” said Sarah Smith, the lead researcher on the study. “Like every other family member or friend of an auditor, I’ve always assumed that my brother, an Ernest & Young accountant, spends every January through March filing taxes for clients.”
“But since the results prove otherwise, I can now understand why he always gets pissed when I ask him for tax advice. And why he always tells me to ‘Call H&R F***ing Block.’”
In interviews with more than 500 staff auditors at Big Four accounting firms, the researchers discovered that all auditors do during busy season is test a company’s processes and procedures to opine on the accuracy of a company’s reported financial statements.
“While this is just as painfully boring as filing 1040s, it doesn’t have anything to do with taxes,” Smith noted. “In fact, the closest most auditors get to the IRS during busy season is doubling the sales tax at dinner to calculate the tip.”
According to Smith, busy seasons are typically three things: “using calculators the size of pizza boxes and wearing ties in a casual environment to show their clients that they mean ‘business;’ beating up a clients’ junior staff for a month straight about the lack of internal controls because the signatures did not fully penetrate the triplicate on the department-wide birthday card for Larissa in Accounts Payable; and completing a 38-page internal controls checklist on the petty cash fund while completely ignoring the client’s shady accounting treatment for three new SPEs named HIDDENDEBT, IMSTEALING and DONTLOOKHEREPWC.”
Auditors were thrilled with the results.
“Finally the truth,” said KMPG Senior Laura Jones. “Maybe now my parents will stop asking me how the taxes were in busy season, and start asking me how it feels to spend three months of my life preparing a detailed list of proposed accounting adjustments only to have my boss rollover on the golf course and deem them all ‘immaterial’ after the client offers to ‘give him that putt’ and ‘award him a large SOX 404 consulting project’ if we don’t make him book those pension adjustments.”
In a related story, the Center for Employment Research announced that the preliminary results for its Investment Banking study reveal that “most parents have absolutely no idea what their investment banker children do, and why they get paid so much freaking money to do it.”
For the most part that is a joke but the high point of the article drives home the point - I don’t touch taxes and pray to the heavens that I never have to other than filing my annual federal taxes using TurboTax. lol
