By Steven Ulmer, CPA (inactive), CISA, CIRM
As I reflect on my career in accounting, there are a few situations that stick out as lessons learned. Perhaps more accurately in my case, lessons needing to be revisited periodically. These situations involved something either dramatic, funny, or ironic, which I guess is why they’ve stuck with me. As I write this, I realize there may be other lessons readers will take away from this blog post, and you may even disagree with some of my conclusions. There is plenty of room for differences of opinion. For those in the early stages of their careers, I hope you will find something you can use in your practice. Sometimes revisiting the basics can result in significant benefit.
Back in the early days of personal computers, our finance unit would put together a monthly management book with a page for each of our roughly 120 oilfield supply stores. Each page contained the results by month for roughly eight to 10 different financial measurements. Composing this book took several people, counting preparers and reviewers, over a week to complete and did not get distributed until the end of the second week of the month. A copy was sent to all the top managers in the division.
One day I was asked to deliver a copy to Ted, our vice president of operations. When I took the book to Ted, he said, “Steve, do you want me to show you what I do with this book?” I smiled, not knowing exactly what was coming, and indicated for him to go ahead. He opened a desk drawer, took the book from last month and tossed it in the garbage can, and then threw the new book in the desk drawer and slammed it shut. Was he trying to be malicious? I do not think so. I looked at it as an experienced senior manager nonverbally sharing his insight with a young person. The drama and humor made it memorable.
How many reports, PowerPoints, and Excel spreadsheets do we or our client companies send out that are not timely or useful for making business decisions? Has it gotten better or worse over time? Do we need more Teds in our organizations?
I understand the argument that a signature on a document is a way to hold people accountable (among other things, of course). Early in my career in internal audit, however, I found relying on a signature (manual or electronic) as evidence of performance should carry a warning caveat internum diligit auditoris animus (internal auditor beware). How many times have you seen at least one of these events during your audit career?
- A plant floor supervisor gives his ID/password to a clerk to approve time reports.
- To clear out a backlog of purchase requisitions sitting in her queue, a senior manager gives her ID/password to the administrative assistant to do the approvals.
- A purchase requisition requires five or more approvals, but you get the sense most of the approvers never read the supporting detail.
- A capital appropriate request (CAR) is routed to multiple approvers. After being approved by the appropriate person in finance, the other approvals take place one right after the other in a short period of time.
Even with all the emphasis on security and training over the decades, people are still sharing passwords. And it is not uncommon.
I sat in a meeting years ago where a group of people were discussing a capital project that went south. I know the CFO was trying to put the best spin on events, but something he said still makes me laugh. He told the group, “We do not even know who approved this project.” I can tell you with certainty that his signature and those of at least two other people in the room were on the CAR. The extent of the review performed before signing the CAR may have been a better subject of conversation. Did they want a post-completion audit to identify opportunities for improvements on future projects? I think you may know that answer: like the Chinese proverb says, “Success has a 1,000 fathers and failure is an orphan.”
With all due respect to King Solomon, I am not sure it works this way: “Whoever rebukes a man will afterward find more favor than he who flatters with his tongue” (Proverbs 28:23).
Our chief audit executive wanted all in-charge auditors to get practice doing performance evaluations. At the end of every audit, the in-charge had to do a formal evaluation of each team member. I remember doing an evaluation for Andrea (not her real name). Andrea would not accept any criticisms without overwhelming support. She wanted specific examples from the audit at a level of detail that I never had to provide before or since, which is why it sticks in my memory. General observations were unacceptable. She also challenged me about why the feedback was not provided until three to four weeks after the fieldwork was completed.
I certainly did not find more favor as Proverbs said I would. In fact, it was quite stressful. Honestly, I think flattery would have worked just fine. Was she overly sensitive? Perhaps. Was she wrong in what she was asking for? Not really. Aren’t most of us sensitive to what we perceive as criticism, even if the intent is constructive feedback? It impressed upon me the need to know something about the person who will be receiving the feedback as well as the importance of the how, when, and whether to provide feedback.
Steven Ulmer, CPA (inactive), CISA, CIRM, is a part-time adjunct associate professor of accounting at the University of Maryland Global Campus. He can be reached at firstname.lastname@example.org.
Sign up for weekly professional and technical updates from PICPA's blogs, podcasts, and discussion board topics by completing this form.