Public knowledge of auditors is shrouded in fear and ignorance. Fear of the awesome variety of pens that auditors wield. Ignorance of what auditors actually do. This has lead to “auditphobia”. This article is the start of the campaign to rid humanity of this evil psychological condition.

Definition

Auditphobia is defined as the irrational fear and ignorance of audit and its associated persons. It affects both auditors and non-auditors (who are also known as nauds).

Symptoms

In nauds, auditphobia is characterised by ignorance and half-truths. Auditors will be confused with accountants. Subsequently, nauds will ask auditors to do tax returns. This can lead to dire financial consequences, because auditors know little about personal taxation. You’d be better off filling in a tax return with the results of a bingo game.

Nauds won’t know who Big 4 are, nor realise how big they are. In 2010, combined Big 4 revenue was $95 billion (source: big4.com). In comparison, the top 10 investment banks billed $83.4m (source: ft.com).

Among finance professionals, auditors are treated with fear, pity and disdain. Unfortunately, audits are as enjoyable (and expensive) as seeing a private dentist. You’d rather do without, but your teeth may fall out.

Taken as a whole, trainee auditors have low self-esteem. Few are openly proud to be an auditor. Conversations have a cynical tone. The work is not considered terribly worthwhile. Saying someone loves audit is used as a cheap taunt.

Diagnosis

The “Enron-Anderson” test establishes if a naud suffers from auditphobia. Three out of the following need to be satisfied for a positive diagnosis:
- Ignorance of the large companies tax rates
- Fear of spreadsheets
- Physical repulsion at the sight of an auditor
- Confusing auditors with ear doctors

Causes

Research into the causes of auditphobia is, sadly, very sparse. Nauds usually suffer from child-onset auditphobia. It is often triggered while doing long division. Auditphobia is more likely if both parents are accountants. Such children usually become musical prodigies or best-selling novelists.

Finance professionals develop auditphobia while being audited. The following situations are likely to cause auditphobia:
- Having your mistakes pointed out
- Answering questions from clueless trainees
- Working overtime to get your normal work done
- Requests to compile unfeasible reports
- Answering pointless questions
- Answering hard questions

Trainee auditors will suffer from adult-onset auditphobia. Audit work is stressful, monotonous and exasperating. The exams are horribly insane. Many graduates sign up for a training contract because they can’t decide on a firm career plan. This leads to the constant and unsatisfying feeling that they should be doing something else.

Prognosis

Auditphobia helps no-one. Nauds miss out on the benefits of spreadsheets. They lack financial skills, such as budgeting, investing and avoidance of bad debt. Such skills would have prevented the credit crisis and we’d all be in a happier place. However, the bankers also lacked these skills.

For finance professionals, audits become more painful than they need to be. A good audit should mean more accurate accounts. This prevents jail-time for directors.

For trainees, auditphobia prevents contentment in work. It doesn’t have to be this way!

The Cure

Nauds can overcome auditphobia by befriending an auditor. This fosters mutual understanding and trust. Nauds can also join a NAYG (Numbers Are Your Friend) group. In time, the fear will disappear and they will gain useful financial skills.

Trainees can overcome auditphobia by gaining a proper perspective. This could involve spending a month in a Chinese textile factory. For those short on time, you should go to a busy street and proclaim “audit is good!”

Date:11 DALSE (Days After the Last Sodding Exam).

I feel strange. After finishing all the ICAEW exams I do not feel ecstatically happy, but oddly disorientated. My skin is not used to so much sunlight. I am re-learning how to cope with free time. One day, I may be able to have some fun again, but such drastic change does not happen quickly.

Qualification requires taking 15 exams over a three-year training contract. They have been long, tiring and emotionally crippling. I am in a strong shock of complete relief. Three years is a long time to aim towards a single goal. You dare not think about life after qualification because the route is so fraught. 15 exams is 15 chances to fail and get fired. The consequence is work in a different spreadsheet-less profession.

So I have reached my intended destination without thinking about how I would feel. It is like hopping on a random plane at Heathrow and arriving quite bemused at Baghdad/Manchester*. Eventually, I will feel satisfied and proud. Qualification is a fantastic achievement. The following is an overview of the last three years

The 15 exams are split over 3 stages, as demonstrated by this ICAEW chart (link):

1) Knowledge Stage

The Knowledge Stage is 6 multiple-choice papers that give a background understanding. The accounting and audit papers are taken as soon as you start the training contract. The accounting paper is terrifying. Understanding double entry is like riding a bike – at some point it becomes easy and natural. You hope that point is before the end of the exam.

The other exams are more straightforward. The material is not hard and the syllabus is manageable in size. This means that it is learnt to exhaustion for no reason. There are (literally) no prizes for first place.

The oddest part of the Knowledge Stage is the ICAEW’s insistence that students use an awful calculator for the exams. The buttons have the responsiveness of a slough. An abacus would be more useful.

2) Application Stage

The 6 Application Stage papers make the knowledge stage look as easy as taking a Facebook break. They are taken about 9 into the training contract.  You are introduced to the accountant’s bible – the IFRS (International Financial Reporting Standards).

These are 3.5 hour written papers. 55% is the pass mark. 1.5 minutes per mark becomes a golden rule because most failures are down to bad time-keeping.

Wobbly tables are a threat but the invigilators will provide free cardboard. You must use a ICAEW mandated pen (black ball-point), however, you can use any calculator/abacus (hurrah!).

The material is harder and learning the whole syllabus is close to unfeasible. The tax paper is especially horrid. As before there is no point revising everything to death, but there are prizes for first place – link.

3) Advanced Stage

The Advance Stage consists of the two Technical Integration (TI) papers and the Case Study. Helpfully, the pass mark is reduced to 50%.

The TI papers combines the knowledge in the application stage plus harder technical material. The tax material is especially horrid. The TI papers supersede all other exams ever taken for difficulty and time pressure. The learning of the whole syllabus is measured tortoise lifespans. Again, revising everything is impossible, however, it feels necessary in order to pass.

The TI papers (and the Case Study) are open book, so you can take anything and everything into the exam hall. To do so requires a trolley case. Unfortunately, the time required to look through it during the exam will probably result in failing.

At 4 hours, the Case Study is the longest paper. However, it is more straightforward than TI. The aim is to write a report about a company. The report uses information publish by the ICAEW before the exam and some new material during the exam. There is no technical material to learn. A few days of preparation is sufficient.  The hardest aspect is demonstrating the required report writing skills during the exam. Preparing the material to death actually increases the chance of failing.

The Journey

I won’t miss the exams, but I did enjoy college and I will miss that. The class of 2011 has journeyed through much hardship. It has cost much: in pens and paper; in evenings and weekends; and in stress and cholesterol. But for the cost, I do believe that the journey was very worthwhile.

This whole article assumes that I have passed before knowing the results. They come out in the Financial Times on 02 September 2011. There is a good chance to be an arrogant and vainglorious idiot.

*Apologies to the people of Baghdad for the Mancunian association.

My generation are in the gap. We are no longer students and don’t quite feel fully adult yet. It’s strange calling ourselves men and women, but using boy and girl doesn’t fit anymore.

We are now several years into our careers. The novelty has gone and the grind has set in. We have reached the destination of our extensive education. But we are not satisfied. Disillusionment is rife. Is anyone actually content in their work?

I originally called this the “post university mid-life crisis”. However, the press had already come up with a name that reflects a more optimistic life expectancy: the “Quarterlife Crisis”. It affects young professionals in the 22 to 28 demographic, who are the  so-called “Generation Y”¹.

Quarterlife Crisis Origins

Despite the damp, university was a great experience for Generation Y’s. Friends were close by and frequently seen. There was little responsibility and oodles of time. We could still hope to live the life of European monarchs and change the world. The sun shone brightly every day.

Then, we put down our books, left the library and started our careers. The mundane realities of life bear down. We worry about paying the rent, bills, loans and the government. Life’s possibilities become fewer. Quick home ownership seems unattainable. Travelling requires money. Time for friends, relationships, families, hobbies and recreational espionage becomes insufficient.

The expectation bar is high, especially in London. If you have not achieved the following by 30, you have failed: 3-bed house, 2 modestly priced cars, a happy marriage, local child-poverty elimination, a good career, dinners in Mayfair, skiing holidays in France and work from an up-and-coming artist whose name you can’t pronounce.

Sadness results. You do not need to use a qualified therapist to diagnose if you are having a Quarterlife Crisis. Just take this easy 25-question survey.

The Impact on Audit

Disillusionment is not confined to the audit industry. Nor is it worst in the audit industry. All types of graduate are affected. 10 minutes speaking to a junior doctor will make you feel that auditing better than a job testing tropical islands.

However, the Big 4 have the bad fortune of employing small armies of Generation Y graduates. Management struggle to meet seemingly ridiculous expectations: money, short hours, stimulating work, low stress, first class travel, learning, security, orphan outreach and organic fair-trade muffins on Fridays.

Historically, turnover after qualification is high. The training contract is like a train journey without any stops, who wouldn’t want to get off after three years? Trainees do, unsurprisingly, experience symptoms of the Quarterlife Crisis. The typical reaction is to seek other opportunities. It is akin to escapism. Options include: audit positions in different departments or countries; a stint in a different position, such as advisory; or working in the commercial sector. This creates retention headaches.

Quarterlife Crisis Progression

Science tells us that all major life events can be summarised in 5 steps. The Quarterlife Crisis process is²:

1. A feeling of being trapped by your life choices.
2. A rising sense of "I’ve got to get out".
3. Quitting the job / relationship / country and taking on a "time out" period where you try out new experiences to find out who you want to be.
4. Rebuilding your life.
5. Developing new commitments more attuned to your interests and aspirations.

The Big 4 are facing a lot of trainees who are in steps 2/3. Fortunately, you don’t need to use an MBA-consultant to find a solution, just follow the wisdom of the ancients³.

Be Happy Everywhere

I believe that the core issue is that expectations are too high. We thought that we could have it all. Life is hard – everyone knows this. What needs to be understood and intimately realised is this: life is suppose to be hard.

Proper perspective should be practiced. Being a trainee auditor is a very good job. At my age, my dad was stuck in a rice field in Communist China. However, that implies that well-educated graduates have no right to be dissatisfied, which is not the case.

Expectations need to be lowered. Auditing may not give ultimate and supreme life happiness with cosmic harmony and eternal justice. However, it is good enough.

I suggest an innocent idea – being content wherever you are. It is sweetly and annoyingly clichéd, but Prozac is expensive.

Footnotes and Suggested Reading

(1) Generation Y is elusive to define. I’ll make a vague assurance to write about it. Otherwise, use Google.

(2) Reproduced from the New Scientist.

(3) Philippians 4:12 – I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want.

(4) Christine Hassler keeps an excellent blog about Twenty-Something’s issues (link).

(5) Times article about the Quarterlife Crisis (link).