On “Discovery” there is a program called “Dirty Jobs”, where host Mike Rowe explores people who unblock sewers, shovel manure and other similarly distasteful ventures. It’s quite entertaining and I’ll watch as much as my stomach allows. Invariably, I come to the conclusion that it’s a job I DON’T want. But someone has to do it. Because if not, the sewers back up, the manure piles up, the roaches run free and things get messy and smelly real quick. The cleanup is normally costly and painful. So dirty as they may be, these jobs are important.
In the financial world, the dirty job is the auditor. He’s the maintenance man, he’s the cop. It’s the job I DON’T want. It’s the dirty job. But someone has to do it.
Drilling things down to basics, the auditor doesn’t do the books. That’s the accountant. The auditor checks things. That the money that’s in the books, is actually in the bank (Satyam – talking to you); that the inventory is IN the warehouse, that the portfolio actually EXISTS and so on. There’s a lot more to the auditor than just the accounting, so they’ll also check that the delivery guys don’t have a side business, that the purchasing guy is looking for the best deal out there and so on. You get the idea. They don’t only look for fraud, they also check that things are being done right, so they normally go around asking a lot of questions. Oh, and least I forget, the petty cash. These guys LOVE to check the petty cash till. It’s almost OCD. They usually work in teams, so one guy checks the other, and they rotate from task to task. You get the idea; no one gets too “chummy” or too familiar with any single aspect. It also makes it a bit more interesting for the auditors. They still do the petty cash thing, though.
One thing these guys love is third party confirmation, so they’ll send out little envelopes to the bank, the broker, clients, etc., just to make sure the bank and broker statements, the invoices and the delivery notes are actually correct and not some wild or fraudulent fabrication. Those little envelopes have to be sent back to the AUDITOR and not the company. The reason should be quite obvious, but they still put it all over those envelopes (and people STILL send it to the wrong place).
The “boss” auditor in the organization reports not to the CFO or the comptroller, but to highest level of the organization, usually the board of directors. I think we can understand why. They’re checking everybody else.
However, these guys usually don’t get paid like top-level executives, because it’s just a dirty job. They’re not out there making groundbreaking corporate decisions or on the front line with customers. Maybe it’s not fair, but that’s the way it is.
The “external” auditor checks that the things that the “internal” auditors are doing is right. And they’ll recheck stuff, usually the important stuff – money in the bank (PWC talking to you- Satyam), portfolio at the broker, etc. They do the little envelope thing, too.
And of course, the petty cash. They usually report back to the shareholders, which makes sense ‘cause that is one step UP from the board, in what is called an “audited” report.
They rotate “teams” from client to client and yes; it’s even a good idea to rotate external auditing firms every few years. You get the idea, fresh eyes, and fresh perspectives constantly.
When all this is working correctly, it’s like a smooth running machine humming the background.
Except for one thing: these guys are a PEST. They’re always snooping around asking stupid questions, wasting your time, sending those envelopes and checking the petty cash.
Managers and execs don’t report to these guys and most make a ton more money than they do. So when they come around, you’ll roll your eyes and think what do these guys want now? And you’ll make them wait outside, while you do your “real” job, the one they pay you to do, and the one that reports back to your boss and defines your bonus. Or you’ll let those stupid envelopes pile up on your desk, because you’re swamped and have better things to do. Most of the time this stuff doesn’t matter, just little blips in the background whirr.
So it’s humbling for the auditor, he knows his place in the pecking order and probably who makes what. So when the “big man” says “later” or “don’t worry about that” or “that’s the way we do things around here”, the auditor thinks “what the heck” or “it’s not really important” and “it’s their problem anyway”. And most of the time nothing happens, but sometimes stuff does. It happens. STANFORD happens.
So here’s the thing: auditor guy. It’s your job. It’s a dirty job. I don’t want it. But it’s yours. So do it. And do it well. And if you can’t do it: don’t do it. And if they don’t let you do it: QUIT. And if something smells funny: TELL. Be discerning though, you know what’s important. It’s not the account with $30 in it. Bug us with important questions, interesting questions. And knock it off with petty cash already (ok, ok, we’ll do it sometimes).
Because when the sewers back up and the manure piles up, and everything spills over, you’re going to know why. And you’re not going to like it.
So do your dirty job, do it with pride, do it with honor. It’s important. You guys are the front line of defense against the Stanfords of the world.
And clip this column and take it to your superior. This might be the time to ask for a raise.
P.S. Never been an auditor, so if I messed up the description, forgive me. But I still don’t want your job.