The audit profession is easily misunderstood and unjustly feared. The “How to Audit” series aims to give an insight into the world of audit while abiding by professional, legal and ethical standards.

Picture the scene: You are at a party and meet someone new. You ask for their name, which is pointless because you forget it instantly. You move onto the next question: “Where do you work?”. Fortunately for you, the person is not unemployed but does say that they are an auditor.

Suddenly, you have no intelligent follow up questions, and are struggling not to make a joke about calculators. You force yourself a polite smile and comment that it is a “nice” job. However, you actually end up communicating that you think the other person is as interesting as beige. Talking stops and you both separate and get on with the rest of your lives.

This is where you need “insider questions”. Every profession has its own vocabulary, key concepts and idiosyncrasies. Learning a few key questions will make you sound intelligent and have great conversation. However, use insider questions sparingly before you are discovered to be a fraud. Do move the conversation on to mutually interesting topics, such as the weather.

The insider questions for auditors

1) Busy season – Auditors will do a great deal of their work from January to April, often without holiday. This is because audits are conducted after the end of the financial year. This is 31 December for most companies. Mentioning these two words to an auditor will either get them talking enthusiastically or crying endlessly – be prepared.

2) Exams – This is a classic question. Every auditor has gone / is going through exam trauma. Myriad questions can be asked: Which institute?; How many exams they have passed so far?; How many exams left?; How many attempts before getting fired?; Which calculator they use in an exam?

Be sure to mention that you couldn’t work and study full time and that they are making the noblest of sacrifices.

3) Longest hours worked – Every auditor will have their personal story of the nightmare client with the 100 hour week in a tiny conference room that smelled a bit. These are the scars of audit and are worn as badges of honour. Do ask an auditor about their worst job.

4) Funny audit room moments – Cramped conference rooms, long hours, stress and green pens have a strange effect on the auditor’s brain.

5) Cool clients – Not all clients are widget manufacturers. There are interesting audit clients. Just think, for every chocolate factory and theme park there is an auditor having fun.

Pens – the key to audit. Photo taken by atomicShed

Questions to be avoided

Certain questions will annoy the auditor. Use these with care:

1) Jokes about counting beans – This instantly shows your ignorance of what auditors actually do. Bean counters are actually “mere” bookkeepers. Audit is more interesting than that. We check that the annual bean report is correct in terms of number, size, type and weight. And only the larger beans are checked, the small beans are ignored.

2) Asking for confidential information – This is illegal. However, if the auditor acquiesces to you “well-intentioned” joke then immediately phone the Metropolitan Police on 0300 123 1212. Make sure you take a photograph and then run to the nearest safe house until the danger has passed.  

3) Mentioning the tax year – There is merit in knowing that the personal tax year runs until 05 April. However, this date is irrelevant to auditors because they are only concerned with companies. If you try to work this date into a conversation the auditor will start a long and uninteresting ramble on the meaninglessness of 05 April.

4) Posing maths questions – Friends have yelled a series of numbers at me and expected rapid mental arithmetic/calculus. This is a no-win situation for the auditor. Either we’ll get it correct and it is nothing special or get it wrong and look incompetent. Reality is that these days, auditors rely calculators and Excel spreadsheets, even mental calculations are double-checked using a calculator. 

5) Why audit? – Auditing is not a traditional childhood aspiration. This question might expose a graduate’s lack of imagination in choosing a career or a personal desire for a stable income. However, numbers are the great desire for some, but would that be admitted in public?

Do insider questions work?

Insider questions are useful. Last week, I tested out some over dinner with 11 junior doctors and a dentist. I asked questions about the hours and interesting/dangerous patients. After a while, I did try to move the conversation beyond work by asking about non-work activities.

This is important to avoid being exposed as a fraud. But more importantly, no-one really wants to talk so much about work. It’s a Western cultural quirk that the second question we ask is: “where do you work?”. We define ourselves by our work but it is not where our passions lie.

Sadly, the reply to the question was: “I don’t have any spare time”.

The insider questions idea is taken from “How to Talk to Anyone” by Leil Lowndes.

Public transport in South East London is pretty good, but it is not as good as the rest of London. The peoples of South East London have long suffered this inferior treatment under the all-pervasive Transport for London (TfL). Our grievances are:

Lack of underground trains – The only part of the network which reaches the South East is the DLR. One solitary line is poor in comparison to North London. Although it is balanced out by the overland trains operated by South Eastern. However the second grievance is:

The inability to use pay-as-you-go Oyster Cards on said trains – The Oyster card is a great boon for Londoners. It allows for cheap and convenient travel on all forms of transport – except for trains in the South East. You either have to queue for a ticket or get a Travelcard (for unlimited use during the day / week / month). This is fine if you made a lot of journeys, but annoying for one-off trips.

The situation is more confusing for visitors and tourists. There are already enough lines, ticket types and zones without the added confusion of not being able to use your Oyster card on certain parts of the network. It an unnecessary hindrance and disincentive to those wanting to visit.

Oyster Redemption

However, on 04 January 2009 the Oyster Card situation was remedied. Pay-as-you-go is now available on South Eastern trains! The people would have rejoiced in the streets – except most had to return to work after Christmas and they would have slipped on the ice anyway.

A New Dilemma

There is a dilemma for those travellers who don’t commute every day. It is the choice between a using a pay-as-you-go Oyster or a Travelcard (£25.70 a week). If you want to save money by not buying a Travelcard, you have to spend less than £3.67 a day. However, there are situations where this may not be the case:

• Unplanned and unexpected journeys – making a few unplanned journeys in a week will wipe out the savings from using pay-as-you-go.
• Forgetting to touch out the Oyster Card – will cost you £4 straight away. You could phone up TfL to get a refund, but they are unsympathetic and assume that you were out to cheat the system.

All Londoners face the dilemma of capping their transport costs but forgoing a potential (but risky) gain. Interestingly, the very same kind of choice has been studied extensively in Economics, look up “risk premium” and “certainty equivalence”. In short, most people are risk adverse and will pay a premium to get rid of risk. In this case, that means getting a Travelcard.

Unintended Consequences

The station I use most for getting into central London is New Cross. It takes just 15 minutes and there are many trains per hour. An entirely un-noteworthy station, but to me it means that I’m not too far from home.

If you arrive late in the evening, you will see one of two men who stand outside the station who offer £1 to buy back your day Travelcard. The trade benefits all parties, except for TfL. However, the introduction of Oyster pay-as-you-go has removed any incentive to buy a one-day Travelcard.

Two men have been deprived of their livelihood. Is there not a moral duty for TfL / the government / society to compensate these men?

Photo of New Cross Station taken by chrisphin

The blog has been overhauled and the changes are not merely aesthetic. I’m going in a new direction, because I’m no longer “far far away from Scouseland”. I’ve been in London for over a year. I no longer feel the culture shock that I wrote about while I was in China, because I do feel at home here. And Liverpool is actually just a two hour train journey away.

Gone are the greens and pinks of the old site. They were from a different era. The new colour scheme of grey-on-grey reflects the recessionary days that we live in. A lot of the content has been updated:

• Articles – The longer writings
• Photos – I have a new camera, so expect some better photos in the future
• Activities – What I do with my time
• About – Who I am and where my background

What will I write about? I want to tap the under-represented market of London accountants.