[Anonymous]

One of my professors presented us with this scenario in class today. I am sure it is still prevalent in some offices and I am curious what the mindset is of people in the industry and those about to enter it. What would you do?

Ashley works for AAA CPA Firm. When Ashley was first employed, she was told by a partner to report her timesheet accurately and not to underreport her time even when she goes over budget. However, she quickly learned that everyone else in her office “eats time” when they go over budget. Since Ashley does not “eat time” she is beginning to get the reputation of a “budget buster.” Therefore, none of the seniors or managers want Ashley on their engagements. Ashley is therefore getting the worst clients and negative reviews from her seniors and managers. Ashley believes that, unless she starts eating time, her future at AAA is limited.

[silverdice7]

Here is the answer:

Classroom: oh no, never eat time. It is unethical and not fair to other employees.

Real world: ‘The game is the game.' Eat time and be a superstar.

AUD 94
BEC 91
REG 88
FAR 91

Done!

[Peach1024]

I don't eat time. I don't consider it unethical or anything, I just refuse to do it. However long it takes is how long it takes, and if it blows the budget, well, perhaps it's time to negotiate a new budget with the client.

This isn't a huge problem in my office. We do have people who eat time but everyone knows it and they're not even our best workers. Come review time, the only difference between my realization rate and theirs is that I don't bullshit my time entry. If my realization rate is still somewhat close to the ones who work weekends and don't bill it then that's just a cherry on top for me. Our firm is small enough that partners still have a general gist of what's going on with the employees so this works for me, but I imagine if you're judged solely on numbers it becomes more complicated.

Edit: I should add that I'm naturally a fast worker, and rarely go over budget. If you're someone who can never meet a budget, I still wouldn't eat time; I'd start looking for a job outside of public accounting.

AUD - 88
REG - 76
BEC - 88
FAR - scheduled for 10/20/14

[Anonymous]

Re: I should add that I'm naturally a fast worker, and rarely go over budget. If you're someone who can never meet a budget, I still wouldn't eat time; I'd start looking for a job outside of public accounting.

I totally disagree with this statement. I am not super fast at everything I do because I am quite thorough and detail-oriented. That's why I decided to become an accountant in the first place.

[Tripp11]

I don't eat time, ever. Nor have I done so in my 18+ years in public accounting. The budget needs to be as accurate as possible based on prior year actual time, and if people aren't recording their actual time, then it's impossible for the engagement partner to know where the fees should be.

As long as you're working on a project, every minute should be recorded to that engagement. Of course, it also helps that our firm is HOURLY and not salary. =)

I would also let it be known, during my evaluation, that “eating time” seems to be common place in the firm and that you refuse to do it and state the reasons why.

AUD - 93
BEC - 80
REG - 86
FAR - 83

[y_u_no_pass]

Lol, the name of this post really threw me. I was sure this would be about finding enough time to eat while studying!

Florida CPA!
Took final exam 2/25/15.
Sent in Application 3/12/15.
Issued License 3/20/15.
Used CPA Excel solely for all exams.

[Peach1024]

@Myra, I think it's great for an accountant to be detail-oriented and even a perfectionist to some extent; that's what delivers a great work product. But it's just the nature of public accounting that you need to be that as well as efficient. If you have zero balance between the two then I think you'd typically have a problem.

AUD - 88
REG - 76
BEC - 88
FAR - scheduled for 10/20/14

[Rocky123]

@y_u_no_pass

Me too! I thought the same thing. I haven't been eating as much since I've been too busy studying. Eating gets in the way. LOL.

The tallest oak in the forest was once just a little nut that held its ground.

AUD-PASS
BEC-PASS
REG-PASS
FAR-PASS

Rocky123, CPA

[thelawnwranglers]

depends on the billing structure

I know there were some fixed fee arrangements that even though it felt like I worked 12 the manager felt like I worked 8. lol

[Anonymous]

Tripp11 hit the nail on the head.

Eating time isn't doing anyone any favors. It makes it impossible to determine the actual economics of the engagement(s).

Also, it could lead to employee burnout. Work would get real bad for the Senior that gets put on several engagements that “require” eating time.

[TNCPA16]

My question would be – why are you having to eat time? Did the task legitimately take longer than anticipated? Or did you screw up something up and what could have been done in the budgeted time took you a lot longer? If the task legitimately took longer than anticipated, I would say, no, don’t eat that time. Buuuuut, if you screw up, yes you should eat it. I had a situation last year where something should have taken our external auditors maybe 2 hours for 1 person to do. Six people and a week later, they still couldn’t figure it out so they came to me. I looked at it for 5 minutes and realized that they were using the wrong starting balance for their reconciliation. My company shouldn’t be penalized and charged more fees for their incompetence.

[Anonymous]

@Jilly Beans-

I have to disagree with you. The time should be ALWAYS entered. Staff aren't in the position to determine what is and isn't billable to the client.

I DO agree with you in that the client shouldn't have to pay for ‘spinning wheels”; however, it is the partner's decision to determine whether the bill should be written down- not his staff.

If wheels are spinning, the engagement partner should be informed so that he can make the determination on how to address the billings.

[Tripp11]

Totally agree with billbrasskey. It's the engagement partner's decision to write-off, write-up, or bill actual. This decision should not be made at a sub-partner level.

AUD - 93
BEC - 80
REG - 86
FAR - 83

[TNCPA16]

That's fair – I can accept that. My point is really that the firm should eat the cost, not the client. I'm not so sure, though, that “spinning” time gets communicated up to the partner. It's very frustrating on the client side to see how much time is wasted and the inefficiencies and then to hear that the firm is going to request more money from us.

[Tripp11]

@JillyBeans – In your specific example, if I were you, I would have a very candid conversation with your audit senior/manager and let them know that X amount of hours for that one issue where the audit staff was spinning the wheels should not be passed thru as audit fees. I would have him/her go and talk to the engagement partner about it, or perhaps set up a conference call to discuss.

Although, on our audit engagements, we are predominantly fixed fee. So, the more our audit staff spin, the bigger the write-off.

AUD - 93
BEC - 80
REG - 86
FAR - 83

[Anonymous]

Eating time just hurts everyone in the long run. The partners in charge of the budget will look at a job that took 8 hours last year because someone ate time, when it really took 10 hours, and the next person that does the job next year (maybe even the same person) will have to eat time again when it still takes 10 hours.

[Author]

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