A Day In The Life Of An Auditor

Investopedia

If you like the idea of examining and attesting to a company’s financial performance for a living, a career in auditing might be right for you. To help you decide, we’ve interviewed three auditors to show you what your workdays be like if you enter this profession.

Eric Wolf, Audit Manager, Demetrius Berkower (33 years old)
Audit manager Eric Wolf works for Demetrius Berkower, a regional accounting and consulting firm with offices in New Jersey, Los Angeles and the Cayman Islands. The firm provides accounting and auditing services to clients throughout the United States and has clients whose annual revenues range from several hundred thousand dollars to over $100 million.

Wolf is an audit manager in the firm’s hedge-fund practice, so most of his 30-plus clients are hedge funds and other investment companies. Wolf previously worked at two of the larger accounting firms as an audit supervisor specializing in audits of nonprofit and health-care companies.

Wolf arrives in the office around 9:00 am and begins his day by reviewing email and organizing his priorities based on regulatory and client deadlines. After communicating with his clients to obtain any additional information he needs, he performs audit procedures. He delegates certain tasks to staff to ensure that the work is performed efficiently.

Hedge funds must be audited to comply with Securities and Exchange Commission and other regulations as well as to satisfy investors. The audit report provides an opinion that the fund’s financial statements are presented fairly in all material respects. Wolf learns about the valuation of the fund’s investments and performs tests on them. He also examines the fees the hedge fund manager charges its investors and compares that amount to the amount described in the fund’s organizational documents.

Wolf participates in client meetings to discuss audit and tax work, industry happenings and new accounting standards that are pertinent to the hedge fund industry and specifically to that client. The client updates Wolf and his colleagues on the hedge fund’s performance and other business matters. He also attends internal staff meetings to go over work status and discuss clients’ priorities. He has meetings with managers and partners to streamline internal processes and general documentation and to ensure that their audits are completed efficiently, effectively and on time.

Often, Wolf participates in conference calls with potential hedge fund clients along with Maurice Berkower, the firm’s lead hedge fund partner. They discuss the fund’s structure and trading strategy and ask what services they are looking for. Wolf provides biographies of the firm and of the partner and manager who will be working on the job. They discuss the various aspects of the audit and negotiate pricing.

Wolf says the culture at Demetrius Berkower is very friendly. Getting time off for vacation is no problem as long as he gives ample notice and communicates his work status to his colleagues so they can assist his clients while he is away. Wolf, even when away, typically checks his email and voice mail. He works about 45 hours a week during the non-busy season, but from mid-January through April, he typically works 11-plus hours a day plus weekends. Much of this work overlaps with tax requirements, such as producing the hedge fund’s Schedule K-1 for its investors. Wolf does not prepare tax returns, but he works closely with the tax department.

Wolf particularly likes having the opportunity to work with many companies at the same time and get an overall picture of what they are doing. Even within the same industry, different hedge funds employ different trading strategies and styles. He says that every day offers something new and interesting.

Lindsey Graves, Senior Accountant, EisnerAmper (26 years old)
Lindsey Graves, a Certified Public Accountant, has been with EisnerAmper, an accounting, consulting and tax-services firm, for four years. Graves began as an intern, then took a full-time staff position after graduation. After two years, she was promoted to senior accountant in the firm’s hedge fund group. EisnerAmper works with more than 1,000 hedge funds, private equity funds and other fund entities, as well as nearly 100 broker-dealers serving investment banks and retail brokerages.

If you like auditing but aren’t sure you want to dedicate your days to it exclusively, a career as a CPA will allow you some variety. In addition to working on hedge-fund audits, Graves provides tax accounting, bookkeeping and fund services. “Because I am involved with multiple groups, no two days are exactly the same,” she says.

The first thing Graves does when she comes into the office is check her email and voice mail. As a senior staff member, she is usually the main contact for clients, so when she receives a request from them, she decides if it’s something she can handle herself, should delegate to staff, or should seek a manager’s or partner’s guidance on. She also responds to questions from the staff she supervises and completes requests from the managers and partners she works with.

Graves spends most of her day reviewing work prepared by staff. “This includes audit workpapers and testing procedures, financial statements, tax workpapers and completed returns, and various bookkeeping projects,” she says. “I also spend time answering any questions from the staff while they prepare the work mentioned above,” she adds. She then submits the reviewed work to her manager for another review and helps to finalize the audit or tax return and deliver it to the client. “I also serve as liaison between our team and the client when we have additional questions or items that need clarification,” she says.

Once a week, Graves assists her firm’s fund administration team with investor services. She also reviews check runs twice a month and supervises month-end closing activities for two clients that her firm performs back-office bookkeeping for. “Once the month has been closed, I review GAAP financials prepared by the staff on the engagement and send these to the client and their investors,” she says. The financials are then used for monthly budgeting and regulatory filings. These financials are audited annually, and Graves is the main contact for the auditors, providing any reports or answers they need on the financials.

Graves typically works on about 15 audits and 30 tax returns each year. She says the variety keeps things interesting, because she sees different issues and challenges from each client.

During tax season, Graves works from 7:30 am until 10:00 pm and also comes into the office on Saturdays for about five hours. The rest of the year, she works from 7:30 am until 4:30 pm, which lets her have a personal life. The off-season is a good time for vacation, and Graves is allowed eight weeks of paid time off per year.

Graves says that while her colleagues who are audit seniors spend 80% to 90% of their time on auditing work, she dedicates a third of her time to auditing. Her auditing activities focus on testing existence and valuation for the securities her hedge-fund clients hold. She also tests investor capital activity and related party transactions such as management fees and the performance allocation paid to the general partner. She compares the percentages charged to each investor with those stated in the fund’s agreement to ensure their accuracy. For her SEC-registered hedge-fund clients, she prepares the audited financial statements that the funds must file with the SEC within 120 days of year end. These clients also use their audited financial statements to report to current investors and to inform potential new investors.

Daniel R. Montes, Internal Audit Manager, Large Retailer (36 years old)
Internal audit manager Daniel Montes has spent the last eight years as an auditor or consultant and has held many positions, from associate to manager. He currently works for a large retailer as an internal auditor. Montes says he is like the person who helps you clean up your house before your parents come home. “Before the external auditors come for their annual review, internal audit spends a year testing controls to ensure operating effectiveness,” he says. Internal auditors also have a greater ability than external auditors to perform operational assessments outside of finance, he adds.

Montes arrives at the office at 8:00 am and spends his first hour checking voice mail and email. From 9:00 am to 10:00 am, he meets with the audit director to go over departmental projects and news. He delves into his projects starting at 10:00 am, which typically includes meeting with various departmental personnel to collaborate on solutions to problems and risks identified by management or his department. In a typical day, the projects he works on might include process improvements, internal control identification and testing, reviews of policies and procedures, audit planning, external audit assistance, reviewing work papers, inventory counts, IT audits and, rarely, fraud investigations.

Montes spends a lot of time on operational audits and reviews, which examine how things work and the risks involved in operations. These audits take a month or longer, and the end result is an audit report with recommendations for management’s consideration. This work often requires significant collaboration with various departments and different levels of senior and executive management. “People in audit get such great exposure to the company as a whole,” Montes says. “This combined with face time with management can really help your career prospects.”

After an hour lunch break, Montes spends two hours attending meetings similar to his morning meetings. Then from 3:00 pm to 5:00 pm, Montes digests and documents the information gathered during his meetings. “This is where MS Office skills are critical,” he says. “I spend a lot of time working on process flow, advanced data analytics and writing reports.” From 5:00 pm to 6:30 pm, he wraps up any open items and prepares for the following day.

In weekly meetings that last from half an hour to two hours, he updates his firm’s vice president and director on audit projects, their status, and any issues, risks or new projects. Twice a week, he attends change-control board meetings related to system and process changes for the company’s information technology general controls such as user access, security and operations. Any and all changes made to programs, systems or procedures must be well documented, tested and approved by a board of peers to mitigate risks related to unintended consequences of change, Montes explains. Possible changes might include code changes, hardware and software upgrades, new system implementations and policy and procedure changes.

Quarterly, he prepares presentations to update executive management on change-control audits, which entail verification of development and testing activities, checking for requisite approvals throughout the process, and post-implementation reviews to ensure that all policies and procedures for change management have been adhered to. Once a year, he works with external auditors for his firm’s annual audit. He assists in risk identification and in producing an audit plan.

Montes most enjoys his job’s problem-solving aspect. Identifying risks specific to his company and its different operational areas requires great collaborative and analytical skills, he says. He works an average of 50 hours a week and says his company’s culture is very fast paced and high performing. As a relatively new employee, he gets 2.5 weeks of vacation.

The Bottom Line
Whether you work for one of the Big Four a smaller regional firm or a single company, a career in auditing requires not just a deep understanding of regulations and financials but also the ability to work effectively with others. If you can excel in these areas and have the endurance to get through tax season, a career in auditing might be right for you.



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