Text Message Waiting

The Friday afternoon wait for results strains the nerves. Most trainees will try to find an isolated hole to hide in. We were stood in a circle outside a bar in Canary Wharf. Others were enjoying a drink. We clutched our phones waiting for that message.

There are 5 unforgivable auditor pranks. Hopefully, you won’t experience the worse – having “ICAEW” replace a phone contact and being sent a deceitful text. As general guidance, do not send nervous trainees any text messages between 4:51pm and 5pm.

The ACA exams aren’t the most important exams in our lives. We wouldn’t have been to take the exams without good GCSEs, A Levels and a 2:1 university degree. The consequences of failure aren’t so dire. Once the Advance Stage (last three exams) is reached, there is no time bar and unlimited attempts (link).

However, this particular text does have greater significance and meaning. Three years of grinding stress could be over. There is the prospect of life without the threat of exam bird poop over you. The great unattainable becomes certain. Qualification.

Failure means retakes, but a retake doesn’t mean failure. Many successful partners have failed an ICAEW exam. However, the disappointment is crushing and good heart is needed to go through the same process again. Having unlimited attempts is of no comfort. More than three attempts results in begging for an attempt-limit as an act of mercy.

At 5pm, the texts came through. Gasps. Cheers. Hugs. Another check. Handshakes. A text message audit to make sure. Calls to family. A smile.

Website Hunting

After your own position is secure comes the scramble to find out if friends have made it to the same happy place. The exam results are published publically on the ICAEW website. Inevitably, it crashes at 5pm. Fortunately, we live in the age of Facebook. The newsfeed is a crash-proof and reliable information source.

The website is eventually checked because it is an important source of gossip about who failed and what they failed. Confusingly, the results are published in two lists: a Pass List and a Credit List. The pass list is for those who have passed all three Advance Stage exams. The Credit List shows the exams that have been passed for those who have not passed all three. You hope to be on the Pass List, or at least on the Credit List. Being on neither is definitely bad. You may experience shock/elation depending on the permutations of number of sittings and number of exams taken.

Who says accountancy isn’t straightforward?

The After-Party

Qualification should be the perfect reason to party and acts of exuberant celebration, such as swimming in the Trafalgar Square fountains. However, results day is often an anti-climax. Relief, rather than joy, is the dominant emotion. The fear of failure means that nothing large is organised. The mood is dampened by friends who didn’t pass.

The day after qualification feels little different from the days before. There is a quiet satisfaction from the amazing achievement of passing all 15 exams. This grows over time and brings a joy that lasts longer than a boozy night out.

Footnote:
I passed.

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.

It is more surprising when a trainee leaves given that they are locked into three year contracts. It is worthwhile to explore why trainees leave early.

In the beginning

We all start off with good intentions when we first join and no-one ever plans to leave. There’s enough effort just to get started. The graduates have stellar academic and extra-curricular records, well motivated, possess excellent communication and team working skills, and managed to beat 20 other similar graduates to get the job.

Fantastic opportunities lie ahead when you start. The ACA is an excellent qualification. You’ll work with great people. The experience you gain would proudly decorate your CV. It’s tough, but you’ll grow a lot professionally and personally.

Why leave?

In life, nothing worthwhile gets achieved without some pressure and trial. It takes three hard years to qualify as a chartered accountant: 15 exams and 450 days of work experience. It’s an impressive achievement because it is hard. But for some, the effort isn’t worth it and leaving is the right thing to do.

I believe people leave for four interconnected reasons:
1)    Stress
2)    Health
3)    Exams
4)    NFM – not for me

1) Stress

The hours are long: 40 to 50 hours a week during busy season. This does not including time spent commuting, eating and thinking up accounting jokes. Audit is stressful. People think it is just about the numbers. However, soft skills count for more than calculator abilities. A lot depends on the effectiveness, efficiency and helpfulness of the client. So teamwork and interpersonal skills are vital. You’re under pressure to deliver results and meet deadlines. Untypical problems do come up, which needs creativity to find a solution.

Experience matters a great deal for coping with stress. Auditing is done as a team, and seniors will be there to help. Whenever I’ve needed it, help has been available. People do understand that trainees start off with no audit knowledge and take that into consideration.

2) Exams

You will be fired if you fail the (retake) exams. This is how most trainees prematurely leave a Big 4 firm. It greatly adds to the stress of the job. Fortunately, the work calendar is designed so that you the main revision periods are during the quieter times at work. Managers are sympathetic if you have exams and will endeavour to minimise working overtime. However, there will be times were you have to work long hours and revise in the evenings and weekends.

Telling you to pass the exams first time is an obvious and unhelpful piece of advice. But failing means: paying for retakes, using up holiday time for revision courses and destroying your weekends prior to the retake.

3) Health

Audit comes with a health warning.  The typical audit room is cramp and furnished with high tables and unadjustable chairs. This is not good for your back. Fortunately, trainees are only out at the client for about a third of the year. The rest of the time will be spent in college stressing about exams.

However, the long hours spent sitting down and eating sandwich lunches do take their toll. Regular exercise is essential to your health and sanity.

4) NFM – not for me

To some extent, the first three problems can be overcome. However, audit does not suit everyone. Of course, we all get depressed / annoyed / angrier than a banker without a bonus from time-to-time, but for some that feeling never escapes. Their reasons go much deeper than the ones I have outlined. Perhaps the hours intolerably encroach onto family life. The commutes are too long. The firm is too large and impersonal. Maybe the work isn’t simulating enough.

Conclusion

Some trainees will love the work and feel no pressure, others will find it intolerable. Most of us fall in the middle, the pressures are they but we’ve found ways to cope and still manage to have some fun.

I don’t want to attach any stigma to those who leave early. Everyone faces the same pressures. I would say that it’s important to consider how you will cope and if you will be happy before starting any job. However, it is impossible to know that until you have joined and discovered this for yourself. After all, no wisdom was ever gained from a blog post.

Epilogue

I actually wrote this blog post at the beginning of my audit career but I refrained from publishing it might have given the impression that I was going to leave early. However, with one exam to go before qualification, leaving is unthinkable. In a poll of some peers, no-one would choose to leave even if they won the lottery.

I did write this blog post for my friend, Graham. He faced a lot of these work pressures that I have talked about. And, a year ago, passed away after a long period of mental illness. He was 24.

In his memory, we (Graham’s friends and family) are raising money for Mind, a leading mental health charity by running in the Bupa 10k race. Please, hit the link below and donate generously:

1. Exams

Never before has a generation been examined so much: Key Stage exams, GCSEs, A Levels, university and now the ICAEW exams. If I stack my accumulated textbooks and notes, it would reach one 232,830,406th of the way to the moon, i.e. 5’5”.

The exams are horrific but going to college is a refreshing change from work. It harks back to a simpler time in our lives: classrooms of 30; a teacher at the front; registers; morning, lunch and afternoon breaks; homework; and (best of all) finishing early. Also, we get paid for attending, and I get bullied less.

2.  Pencil Case

Despite being adults, we still need to carry a pencil and calculator. You don’t notice that it is odd until you produce a calculator when the dinner bill arrives.

3. Bully the 1st Years

New trainees start not knowing which way to hold a pen and thinking that “casting” is a way to listen to a briefly popular 90s indie band from Liverpool. Although, they are impeccably dressed.

In order to teach them the ways of accounting for a part disposal of a foreign subsidiary using the fair value method of non-controlling interest under International Financial Reporting Standards as adopted by South Sudan**, they must endure endless hours of photocopy and confusion.

Please note that this blog does not condone bullying. The 1st years are valuable, but the first year is always a hard learning experience.

Audit combines a genuinely open work atmosphere (reference to the last blog post about partners serving tea) with a clear hierarchy. Mistaking someone’s grade is a mild faux pas. A while ago I was mistaken for an intern and got asked to do some printing! The distinction is important because each year’s experience is worth a lot. Knowing someone’s grade gives an easy guide to the level of work that he/she can do.

4. Day Trips

Auditors lead a very active social life and the firm subsidises social events throughout the year. Except, your legal guardians won’t be phoned if you get lost on a night out. The post-social drop in productivity is balanced by department bonding.

5. Cliques

The value of professional firms is in its employees. How else can a audit report, which is just a some paragraphs stating that the financial statements are true an fair, be worth so much? Good relationships are vital for working effectively. Some interesting cliques do develop:

• Infernos – a club in London for the young professional who wants to relive their university partying days. Unfortunately it costs a lot more and you will run into other auditors.
• Geeks – these previous social outcasts become sought after for their intimate knowledge of auditing standards and Excel.
• Asian Kids – Recently, audit firms have recruited from Mainland China. The group is large enough for me to apply a meaningless label to them.
• Wantaways – Those who decided that audit was not for them and are just waiting to pass their exams and leave. Every auditor will go through this phase after a few hard weekends of work.
• Audit Lovers – A rare breed indeed.
• Jocks – A good deal of auditors play sports and go to the gym. Intra-department matches are popular, except the opposition may wear pink tutus.

Real-life auditors don’t necessarily fit into these categories. The audit lovers do still go to Infernos and the Asian kids aren’t always geeks.

Except

Audit is like high school, except for the work, which means the high school analogy isn’t appropriate. I have responsibilities and deadlines. If I stop working then I won’t be able to live in London. However, that is true of any job. Audit has its faults but you cannot say that it is not varied.

**For those who are interested, the answer to the problem in part three is a combination of IAS 27 and IAS 21. The South Sudanese accounting standards have not been written yet.

There are 286,000 qualified accountants and 169,000 accountancy students in the UK (source: FRC). That means you can’t avoid them for your whole life. This blog post will explain where accountants come from and what motivates them.

The Defensive Play

It was once believed that accountants were delivered by storks while sucking their thumb and clutching a calculator. Modern biology proved that accountancy is not a natural career choice. Show me a child who aspires to be an accountant and I will show you the telephone number of a good therapist.

Accountants are actually produced from the “Big 4” accountancy factory (the four largest firms who dominate the industry). Fresh university graduates are the raw materials and they take three years to process. They are lured through the gates because the training contract offers:

• Stable employment
• A free chartered accountancy qualification (the “ACA”). Qualification means a large pay rise and near-guaranteed job security for life.
• Good work experience with exposure to many different aspects of a business

For these reasons, accountancy is a defensive play for 90% of trainees. It is a safe option for the graduate who is unsure about their long terms career goals. By simply doing as you are told for three years you will end up with valuable work experience and qualifications. No thought is required and the long-term serious career decisions are deferred.

It is a safe and pragmatic career choice. But that’s the way accountants should be.

The Machiavellian View

The cynical view is that trainees are entirely self-serving and leave as soon as the training contract ends, having conned the ACA from their employers.

However, this Machiavellian view is acceptable to the Big 4 because they easily extract enough value from their trainees. They perform a great bulk of the fieldwork at the client.  Even though the ACA is a great expense the cost is recovered many times over. A trainee is charged out at over £100 for every hour that he works at the client. A trainees will earn around £350,000 in profit for the firm during their contract period.

A lot of trainees do leave after qualification but the business model is not designed for all of them to stay. Otherwise, there would be too many assistant managers.

However, the three years are not just a relationship of convenience. The firms do want you to stay after qualification even if it is not as an accountant. They will make efforts to find placements elsewhere. Possible destinations include other business areas of the firm, such as advisory, placements at the client and placements abroad.

Trainees are not solely treated as a resource but as valued members. This is why the Big 4 do well in employee satisfaction surveys.

The Meaning of Audit

Accountancy is a good career – but why do any work at all? Accountants do have dreams of lying on a beach for half the year and skiing for the other half. But that would be a waste of immense talent. Also, modern civilisation would collapse if there was no-one to audit the accounts.

We agree that work is necessary. On the basic level, we need to earn money for food and shelter from bandits. However, should we expect fulfilment and satisfaction from our work, or is it just a means to an end?

Inevitably, accountancy is just a 9 to 5 job for a lot of people. I have joined in the bitching and moaning sessions while at work. But I have also met those who do enjoy auditing. It is more satisfying to work with them. They get the unpopular label of being “keen”, but it is the geeks who do well at school, not the jocks.

My Story

I wanted to become a chartered accountant after doing some work experience while I was in school. I did the usual amount of photocopying and filing. But I spent the bulk of the summer making over 100 archive boxes to store old files. This proved to be valuable experience because I won the first year trainee box making challenge. I was impressed by the importance of my bosses work and the respect that he got from his clients.

During university, I did some summer work in a chemical factory. I spent many 8 hour shifts lining up plastic bottles and stacking them on pallets. I vowed never to do any more menial work and to go for a challenging career. That’s why I am an accountant.

I didn’t know about the dire days I would have counting things on pallets and sifting through endless invoices. But I like the people and the work can be interesting. It’s pleasing to understand and apply a complicated accounting standard while at work. So like most people, I fall between the pragmatists and idealists on the purpose of work. Like most trainees, I’m still deferring the decision on what I will do after I qualify. But I will enjoy the time in between.

Work isn’t meant to fulfil your Ultimate Life Purpose™. It isn’t your whole identity. But it is OK to have fun auditing.

I am going to give an insight into what the trainee auditor’s life tastes like.

The Main Doughnut Sections

Busy Season
Half of the year’s audit work will be concentrated into these three months. Annoyingly, it is also the darkest and wettest time of the year.

College and Exams
Exams are a horrid burden and will ruin a lot of weekends for three years. However, college is a nice break from work. It’s a good chance to catch up with the other trainees who you otherwise wouldn’t see.

Holiday
25 days is the standard number of holiday time. You don’t have to take it during the summer and Christmas, but you can’t take any during busy season and college time is immovable.

The most interesting doughnut finding is that trainees don’t actually work that much when you add college and holiday time. For that reason trainee auditors don’t get paid as much as bankers or lawyers, but the trade-off is fair.

The September Milestone

Accountancy firms are the largest recruiters of graduates, therefore, the audit year follows the academic year because most join in September. The new first years do bring a feeling of renewal. The new joiners’ event celebrates their entry by subjecting them to the ritual humiliation of karaoke. They made me remember when I joined just 12 months previously. I realised how far I had come in that time (and how much stationery I had wasted).

September is also promotion and pay rise season. This is celebrated by the awarding of medals and the consumption of doughnuts.

Social Events

Large social committee budgets and mandatory contributions means that there are lots of social events throughout the year.

Alcohol
The highlight is the Christmas party, which is ridiculously messy but will give you lots to talk about until next year. There are regular pub meetings, which are mainly caused by a high turnover of staff leading to lots of leaving drinks.

Strangely, there are no regular pre-weekend Friday drinks because auditors are scattered throughout different client sites and are not based in a common location. The other (implausible) explanation is that I’m not being invited.

Corporate Social Responsibility Day
This is where the department take a day out of work to help the community. In my first year, we painted an old persons home. Other departments have gardened, cleared rubbish and done volunteer auditing for the needy.

Department Away Day
The department stops auditing and does something fun for a day. This may include sailing, horse racing and hunting bandits

Inter-Department Sports Events
The rivalries cover football, pub quizzes and netball. Accountants are competitive. The sight of partners dressed in fairy wings and pink leggings is pretty scary.

Looking Forward

Trainee auditors enjoy a varied (and tasty) life. If you are are having a bad week then there is always an event or a change in activity to look forward to. Fifteen exams is daunting when you start but time does pass crazily quickly. Busy season is hard but there are lots of fun times too. I look forward to qualification and the lifting of the exam burden. But the audit doughnut does become somewhat less interesting:

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.

I passed. If you don’t believe me, you can search for my name on the ICAEW website.

I celebrated by performing a petty cash count with my flatmate on his box of change. I initially offered him £10 for the box, which he rejected.

The total came to £86.68 – including 454 hand-counted pennies. I’ve included some bottles of beer in the photo to dispel rumours that accountants were unexciting.

For me, relief trumps happiness. It’s a hard road to become a chartered accountant. The next step for me is to ensure the controls around cashing the money at the bank are working correctly.

I realise I’ve been insufferable over the past couple of weeks. I make no apologies.

The exams went OK. There were no major disasters:

• I woke up on time, ate a good breakfast and made my connections
• I found a Starbucks nearby and performed my pre-exam ritual of staring into space
• There were no weird accounting questions on the depreciation policy of Mexican Geese
• My pre-made lunch didn’t poison me
• I didn’t have to use my backup calculator or any of my two backup rulers. Disturbingly, I wasn’t the only one who had more than one calculator

I can now read my audit practices book in peace without the pressure of exams.

Except I can’t because the taxation exam is 3 hours away!

Posted by Wordmobi

Still better than the endless hours of taxation revision that I have to do. Why do people still asking me for advice?

Posted by Wordmobi

I’ve finally managed to put up a banner on the site. I was meant to do in when I was in China, and it would have had more meaning then, but it still works for London-life. I would still call Liverpool “home”. Sometime in the future, I will regard London as my home, but not just yet.

I’m planning to do a month-by-month review of the year. Given my rate of blogging, it could take a while.

I’m left holding 200 pages of unrevised notes and the exams are in 11 hours time. With my free arm there is still a backlog of client work to be cleaned up next week. It’s been hard.