It is a recurring theme. An audit firm receives a PCAOB inspection or peer review report, and the findings are less than optimal. After the initial shock and mandatory meetings asking, “How the [insert expletive] did this happen?”, the firm immediately performs a post-mortem autopsy and, inevitably, the conversation circles back to training. The firm realizes that their current audit training is just not translating to improved audit quality on their engagements. And that’s where for the past 20 years we’ve helped firms, large and small, improve their training programs with tailored audit training.
Last month, literally within days of each other, we were approached by TWO large, national audit firms. Both were in similar situations to that described in the paragraph above. They were looking to improve the quality of their audit training across all levels, specifically focusing on internal controls over financial reporting and risk assessment, which are two of the most common areas of PCAOB inspection findings. Interestingly, both firms used the same company, a division of a multinational media conglomerate, for their existing audit training…and both firms were not happy and looking to make a change!
In my opinion, one of the main reasons these firms were unhappy with their current training provider is that the audit training was too generic. This training provider offered open-enrollment-type staff training for every level of the engagement team. And the training provider’s clients ranged from national firms that approached us that send hundreds of people through their training, to smaller, regional firms that send only a handful. These firms’ clients are different. The issues and risks they face are different. And, yes, their training should be different. Specifically, training should be tailored to the individual firm’s needs. Their clients. Their methodology. Their issues.
Luckily, they reached out to GAAP Dynamics who has been providing tailored accounting and auditing training to accounting firms and companies worldwide for over 20 years!
We prepared a detailed discussion topic outlining a comprehensive audit training program for their professionals to help them better understand the audit process and the requirements of U.S. generally accepted auditing standards (U.S. GAAS), with additional “add on” courses for PCAOB auditing standards. This proposed audit training program utilized a blended approach, with a mix of eLearning modules and live, instructor-led tailored training delivered either in the classroom or via webinar. It was a perfect solution (IMHO) and one of the firms thought it could be a possible longer-term solution, but there was only one problem. They needed training NOW to “fill the holes” that currently exist within their audit training and this solution couldn’t be rolled out until mid-2023. That’s the thing with comprehensive, tailored training solutions; unfortunately they take a good bit of time to develop and implement.
For one of the firms, it was decided that the best way to accomplish this task was to develop a series of tailored, CPE-compliant webinars to be delivered during the next several months. We titled the training program, Cornerstones of Audit – Common Issues Noted by Inspectors, which comprises the following five webinars:
- Understanding the entity and its environment, including internal controls
- Assessing and responding to risks – the risk assessment process
- Analytical procedures
- Audit sampling
- Auditing estimates and related disclosures, including the use of specialists
Each webinar will be approximately 100 minutes, qualifying for 2.0 CPE credits, broken out into the following sections:
Section I: Overview of applicable guidance
This section begins with a brief introduction to the topic and why we have included it in the training program (the “WIFM”). We then walk through the applicable guidance set out in U.S. GAAS, although given the timing, this would be at a relatively high level. The section concludes with the additional requirements and procedures required in order to comply with PCAOB auditing standards.
Section II: Cases focused on application of guidance
With series of mini case studies (4-5), this section takes a “deeper dive” into the requirements of the standard, highlighting common issues and areas of focus by reviewers/inspectors. Participants review the case facts and provide feedback about their observations of where the audit team got it wrong, and additional procedures that need to be performed to comply with the applicable guidance.
Section III: Firm specific resources and issues
This section (to be developed in conjunction with the audit firm) focuses on your firm’s policies, specific methodologies, audit training programs, and other resources available to professionals for the area. It also covers the specific issues and findings based on recent inspections/reviews of firm audits. It concludes with key reminders for audit teams.
We believe this training would best be delivered via the co-facilitation model. One of your subject matter experts (SMEs) would be paired with an expert facilitator from GAAP Dynamics to deliver the training to your professionals, presumably 2-3 times to allow for maximum participation. Furthermore, these webinars are recorded for those unable to watch the recording and, for an additional fee, such recordings could be turned into CPE-compliant self-study courses.
The solution set out above worked for one of the firms. We are starting work this week. The other firm wasn’t as pressed for time and is looking for a more customized solution. Regardless of your needs, if your firm needs help remediating inspection findings or issues noted during peer review, or is looking to upgrade your audit training, we’re here to help! Let’s talk.
About GAAP Dynamics
We’re a DIFFERENT type of accounting training firm. We don’t think of training as a “tick the box” exercise, but rather an opportunity to empower your people to help them make the right decisions at the right time. Whether it’s U.S. GAAP training, IFRS training, or audit training, we’ve helped thousands of professionals since 2001. Our clients include some of the largest accounting firms and companies in the world. As lifelong learners, we believe training is important. As CPAs, we believe great training is vital to doing your job well and maintaining the public trust. We want to help you understand complex accounting matters and we believe you deserve the best training in the world, regardless of whether you work for a large, multinational company or a small, regional accounting firm. We passionately create high-quality training that we would want to take. This means it is accurate, relevant, engaging, visually appealing, and fun. That’s our brand promise. Want to learn more about how GAAP Dynamics can help you? Let’s talk!
This post is published to spread the love of GAAP and provided for informational purposes only. Although we are CPAs and have made every effort to ensure the factual accuracy of the post as of the date it was published, we are not responsible for your ultimate compliance with accounting or auditing standards and you agree not to hold us responsible for such. In addition, we take no responsibility for updating old posts, but may do so from time to time.