[tobiasfunke]

I work for a small contractor, and they expressed interest in going after contract audit work once I complete my CPA (will know tomorrow). I really enjoyed audit, (got a 90), and everything with the material just clicked.

The company has ties to a couple (small) NFPs, and she said we could offer to do some pro-bono audit/accounting work in exchange for getting a chance to gain some real experience.

I didn’t go big4/public, so I have no audit experience. What books/resources would be helpful in planning an audit for smaller organizations? Understanding audit for the exam is one thing, but putting it to the ground is another. Would be helpful if I could read materials that say “okay this is how you actually apply that knowledge to audit F/S.

Thanks 🙂

FAR-84
AUD-90
REG-86
BEC-Please let it be over on 8/21.

[Anonymous]

tobias-

Auditing platforms like PPC will have all the workpapers you need. If you're a fairly sharp guy (or gal) and take your time proceesing each step, you can reason your way through the workpapers. Just don't expect to come anywhere near making a profit until you've done several of them.

[Anonymous]

Also, keep in mind that passing the exams doesn't make you a CPA. You need the related work experience. In many states, that means having attestation experience (audits, reviews, and/or compilations).

If you attempt to do an audit without being fully licensed, you will find yourself up the proverbial creek with no paddle.

[Anonymous]

Adding to what Bill said, in some states the CPA signing the report has to have a certain amount of experience and CPE in auditing. If I understand you correctly, you will be the engagement partner. Be very careful.

[tobiasfunke]

Thanks for the info guys.

I've already met the work experience/education, so I'll be fully licensed according to my state. Unless I'm missing something, but I'll call and double check.

These are pro-bono jobs for really small charities, so just looking to get some hands-on experience for myself when we actually bid stuff. Even then we'll be under a prime, so we'll be working under their umbrella.

FAR-84
AUD-90
REG-86
BEC-Please let it be over on 8/21.

[Anonymous]

Better safe than sorry.

Small audits can still result in large lawsuits.

I work in litigation consulting and can assure you that you'd be toast if you were sued. A half decent lawyer would paint you as incompetent with the quickness, regardless of whether or not you followed GAAS to a T.

While we're on the subject, you should see if your company will pick up your professional liability insurance tab. If they are going to ask you to sign off on something, it's the least they can do. If you're signing off personally, you have unlimited personal liability.

It sounds like you are the only CPA there, so the company you work for can't sign off. CPA firms need 51% or more of the ownership to be licensed CPAs.

[tobiasfunke]

I'll inquire about the insurance then.

So back to the original quesiton. What books/resources/software would be useful in actually learning the nuts and bolts of engagement planning? Regardless of I do any real work, I just want to learn more about the process.

FAR-84
AUD-90
REG-86
BEC-Please let it be over on 8/21.

[Anonymous]

My firm uses Thomson products. Most audits specifically use PPC.

We also do some specialized agreed-upon-procedures, mostly for Federal clients. The AUPs normally have custom tailored audit programs and workpapers we create from scratch with the Federalayhood..

For small audits like those you refer to, you should be fine with a solid audit program, Adobe Acrobat, and MS Office suite.

[acamp]

The notion of brand new audit associate effectively becoming the staff through partner of an engagement of any size is scary. Not from that, but without public experience, you may not be able to sign an opinion depending on your state.

ie: California, any accounting experience gets you a general (G) license, but you need the attest work to get the (A) license which allows you to sign off on reports.

I could see doing accounting work (maybe) to gain experience, but performing an audit is a stretch.

Self proclaimed: Highest ratio of Replies to Others v. Posts Created on A71

California CPA - Big4 Aud Manager Alum - Private Accounting at Startups

FAR, REG and BEC with Ninja Notes + WTB Only

Ninja + Wiley Test Bank: [FAR - 81] [REG - 76] [BEC - 88] [AUD - 73](doh!)

Becker Videos: [AUD - 82]

California CPA

[mena je twa]

tobiasfunke –

Its going to be tough, if you dont have prior audit experience, specially with these small companies.

I dont know where to begin about telling you what nuts/bolts you need to succeed, but honestly, its all about actually doing the audit, no books, or class or pdf format or word something is going to expose you to true audit techniques and engagement planning.

I mean, you need to set materiality, scope out acccounts, do some testing , some few controls, some substantive work, issuing opinion , also segregation of duties will be a hug issue, if its a small firm you are auditing.

i would be very careful, on printing your name on that dotted line……Not scaring you, but there are a holes out there who will get you, specially if they find out that you are newbie!!

Licensed CPA, Texas - 2012

[Anonymous]

Call me crazy, but I think these states that offer sub-licenses are kind of silly. Massachusetts does it as well.

A CPA should be a CPA. Once licensed, you should be able to provide any general service without confusing the public.

Also Tobias-

I should clarify that agree with acamp that this is a horrible idea. There are many more things that you would have to consider before even attempting to do this. For instance, some states require that you register with the state and subject your workpapers for peer review. I already mentioned professional liability. You may need a concurring partner to review. In you case, that would be an outsider that will charge you $200+ per hour to tell you what you screwed up. There are probably more reasons why you shouldn't do it.

In short, there are far more risks than there are rewards.

[UNC MAcc]

LOL do NOT try to audit someone if you have no auditing experience.

B - 89
A - 80
R - 78
F - 86

CIA, CFSA, MBA, MAcc (too many f'ing degrees and certs, I know, trust me)

[solescpajourney]

I agree that you shouldn't attempt it if you don't have audit experience. I suggest networking with some CPA firms in your area (smaller firms if possible). I've worked for two CPA firms and they both contracted out some of their audit work. One of them in particular was constantly underbidding and had more audit work than the firm could handle. If you could talk to them about contracting some out to you, they could guide you along the way, and you'd have prior year's workpapers to go by. It might be worth a shot to ask.

[Anonymous]

solescpajourney-

That's probably the best idea I've heard in here yet.

[solescpajourney]

Thanks, Billbrasskey.

[tobiasfunke]

UNA Macc, the question was simply what materials would be good to read in planning an audit. This is all very much in the therotical stages.

An additional f'ing cert in reading comprehension might be useful.

FAR-84
AUD-90
REG-86
BEC-Please let it be over on 8/21.

[Author]

Replies