There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.
Abdullah Mansour: Welcome back to Audit Smarter. I'm Abdulla mansoor. And today we're talking about a challenge that plagues even well-run firms review bottlenecks. Why are partners and managers constantly reviewing late into the night? Sam what's the root problem?
Sam Mansour: Yeah, I mean, it's definitely something that, you know, I, I think back [00:00:30] to like sitting on the hotel room bed picking a show and then just sitting there and reviewing work papers, you know, super late. I mean, it's I think that I think a lot of auditors and audit partners and seniors and managers who travel, you know, you get down with the client, go to dinner, go back to the hotel and review work papers. So there's a few different reasons. You know, I mean, I really I think the problem usually starts Start upstream [00:01:00] so teams submit incomplete or disorganized work papers for review. And this is something that, you know, I have spent a lot of time working with team members, training them, setting up the environment properly in the firm so that we don't have, I mean, to be blunt, garbage blowing through up to the reviewers. And the biggest message that I've always sent team members is that, look, you know, when you perform work [00:01:30] and you do and you complete a work paper, you complete testing, you are now having to submit that to somebody else. So if you're just rushed and you slap it together and you sign off on it and throw it in and move on to the next thing when it comes to the next person, kind of upstream, the next reviewer in line, maybe it's the in charge on the job, then they're having to spend a significant amount of time either writing your review comments, communicating [00:02:00] with you, and in some cases, you know, some reviewers will make the corrections for you then, but no one learns anything.
Sam Mansour: Then let's say that the let's say the let's say from the preparer levels a little sloppy. The in charge is not as detail oriented. Then it moves up to the manager or partner. They are going to probably be a lot more detailed than the next two levels. And so then they're going to spend time talking to either the in charge or the preparer of the work paper [00:02:30] sending emails, sending messages via chat, asking questions. I mean, it just slows everything down so immensely when those work papers aren't put together. Well. So then I go back. I've got. So I thought, okay, now where is the root cause of this? And the root cause is at the preparer level? The better job that they do, the easier life will be for everybody else. One big suggestion, and I think I mentioned this in a prior episode, is to take [00:03:00] the review comments that you get, paste them into a word document.
Sam Mansour: So let's say you're testing cash and you get review comments. Put them into a word document for that section. And then when you get done testing cash on the next job, go back to that word document, pull up the review comments you got last time, and review your own work against those review comments, because it is so frustrating when a reviewer has to come in and give the same exact review comment multiple times. [00:03:30] Time and time and time again to the same preparer. And then it gets even more frustrating when it's not just that preparer, but it's across the board of multiple multiple preparers. So we kind of have an issue there so that it all kind of comes back to that. So if you're able to self review it's a huge thing. Seniors may not do a proper self review. Okay. So we kind of talked about this right. The self review. You could either remember what you were told before or you can keep it documented someplace. I think keep it documented someplace is way better because my idea or my [00:04:00] goal, if I get a review comment once, I shouldn't have to get that review comment ever again if I reviewed against my own work.
Abdullah Mansour: Yeah, that seems frustrating. Yeah, yeah.
Sam Mansour: It's hard to remember all the potential comments you would have been given. So if you don't document, you're going to remember it. Um, so seniors may not do proper self review and instead rely on partners to catch and clean up errors. And this is even more frustrating because what happens is you, as the senior or in charge on the job, say look like, yeah, this is kind of sloppy. [00:04:30] There's a there's a lot to get through. I gotta hurry up. So the preparer kind of said that because they have multiple sections to test and they're in a crunch, and there's going to hurry up and sign off on it and give it to the senior. The senior is like, I have multiple jobs to review. I'm really busy. I'm just going to hurry up and review it real quick and sign off and give it to the next guy. And eventually when it gets to the partner level, they are now extremely frustrated because everyone's just kind of done the same thing. And if the partner does, that has that same perspective. The next level after that might [00:05:00] be a peer review. And that could be a really big problem for the firm if there are deficiencies. So the partner can't afford to then to to do what the other two levels did, which is I'm going to rush and let me just hurry up and sign off on it. They have to be pretty thorough. So eventually, eventually, if you think about it at the preparer level, eventually if you have bad work papers, bad testing, bad documentation, it's going to have to someone's going to have to give you a comment [00:05:30] on it, so you're better off just fixing it.
Sam Mansour: And if no one gives you a comment on it, then you're putting the firm at risk for, you know, some kind of negative impact in a peer review. So without phase based internal deadlines, everyone, everything piles up at the end and partners get buried. So phase based means, you know, we should have a deadline for field work to be done, for testing to be done. We should have another deadline for when the incharge should have a review of the work papers done. Some [00:06:00] incharge is unfortunately they will like let job go after job go after job go and eventually they have like 3 or 4 jobs that they have to review. I mean that's that that's a lot of piling up. Sometimes field work is just scheduled back to back to back to back, and you've piled up so much review that at that point, like it kind of gets tiring just, you know, reviewing in that level of depth so much. And so you piles up on you, [00:06:30] you rush through it, then you push it to the partner, then it piles up on them. And then we get to this issue, you know, kind of back to what you you. Intro intro with audit review bottlenecks. Why partners are stuck reviewing Workpapers forever. It's because of this. This activity that I would say is unfortunately more common than less common in firms. Confirms.
Abdullah Mansour: It's kind of a cycle that, um, you have to break out of never ending, and it doesn't seem sustainable at all. But [00:07:00] what are some signs a firm is facing? Uh, a bottleneck problem?
Sam Mansour: Yeah. I mean, there are, I would say lots of signs. Um, typically, like I would say, just in general, the environment of that firm seems a little chaotic. Everything's kind of last minute. People are rushing. They tend to the firm tends to kind of blame the the sorry, the firm tends to blame the client. Oh, you know, we were waiting on these two work papers at the last minute and we didn't just get them. [00:07:30] So now we're turning it into a review, but we didn't email them for like a month, you know, to ask for.
Abdullah Mansour: Oh, yeah.
Sam Mansour: So, so a lot of it is kind of poor client management but but really files don't hit the partner desk until the week of maybe the deadline or the week before the deadline or the week before that. And so, so you're seeing that that pile up and those deadline weeks are absolute nightmare. Um, what I, what I tried to do is make a goal in the firm of saying, look, I don't want to be reviewing anything the last week or two [00:08:00] before a major deadline. So how do we how do we achieve this? Because some clients just love to wait until the very last minute because they know they have until, let's say, June 30th to submit their audit. And they know this and they know that they're busy and they know that you're busy. And so they kind of just take advantage of that timeline thinking literally, literally. I mean, quite literally, some clients will give you something a day or two before the deadline and say, well, it was only the last [00:08:30] two work papers that you were waiting on. Here you go. And maybe our team, you know, maybe we didn't get it into review. Maybe we did get it into review. But there's missing sections and so we have to we have to now finish the testing of those sections because we got we got those work papers. And then we have to turn it into review. And the reviewer reviews those work papers because some work papers, a lot of work papers will have to have the preparer sign off the in charge sign off, and some kind of a reviewer or partner sign off. And so we need to achieve those steps. And so if you wait for the day before [00:09:00] and you have multiple clients that do that, I mean you're in big trouble. So it's chaos. Big bottleneck. Review notes.
Abdullah Mansour: Yeah. Oh go ahead. Sorry. Go ahead.
Sam Mansour: Yeah. Review notes are excessive or repeated across engagements. So excessive as in we had this reviewer and he would like literally write paragraphs and paragraphs of commentary in.
Abdullah Mansour: Like one.
Sam Mansour: Single review. Yeah. I mean, it was insane. And I mean, I went I think I mentioned this also in a prior episode, but I said, hey, I [00:09:30] went, I went to this guy. I said, how long does it take you to write these things? Like, it's this is insane. This is just go walk down the hall and talk to the person.
Abdullah Mansour: Yeah.
Sam Mansour: But, um, you know, you you have these, these massive review comments which indicates that there's a problem with the work papers. And then as I mentioned before. The they're repeated across engagements because either that that person is continuing. To make the same mistake. And what they're doing is they're doing a job is not being reviewed in time, so they're not [00:10:00] getting a feedback. But then by then they've already done three other jobs. So now they make the same mistake. 3 or 4 other times the reviewer comes in, they give them the review comments on that first job, but the other 3 or 4 jobs are done. That prepare generally is not going to go back to the other 3 or 4 engagements and make that correction. They're going to wait for you to get the review comment.
Abdullah Mansour: Yeah, we've talked a lot about, um, like culture and collaboration and that just that sounds like a, um, a bottleneck in that, in that sense where they can't just get [00:10:30] up out of their desk and go talk to the preparer, or it seems like it'd be faster and easier, honestly, but it sounds like they're just checking that box off like I gave you the review. Here's a couple paragraphs. Figure it out. That's interesting that that would that would happen. And very frustrating.
Sam Mansour: Correct. I mean, I do think it's a cultural thing. Um, a team thing. Because we, you know, some preparers can be pretty kind of technical people. I'm sorry. Some reviewers can be fairly technical people. They're. They're more comfortable sitting at their keyboard writing comments. The [00:11:00] team members get it. They kind of sort of know what you're saying. They implement. They're like, okay, fine, I'll make this change right here. But I don't think they really got it. And so then what happens is the next time they're doing the same thing over and over again, I mean, repeated review comments, I've seen it so many times in my career as an auditor. They're just some people that do things a certain way, and they just continue to do it that way. Like the next hundred times.
Abdullah Mansour: Yeah, it sounds like a cycle that you just can't break. [00:11:30] Maybe as part of it too, is what it sounds like. The the more you talk about it, it sounds like it's a cycle they're stuck in. And they just keep keep going through that same cycle without kind of stepping back and thinking about a solution to it.
Sam Mansour: Yeah, I mean, I think a big part of it is actually them just being mindful and paying attention right there. The preparer is rushing to get their work done. The in charge is then rushing to do the review, and then when it gets to the reviewer, that's where you have this bottleneck problem. So if you think about it, the way to solve this is to kind of [00:12:00] solve it at at that ground zero level. Be really, really strict on the preparation side. Make sure heavy training happens there, heavy review happens there. So but another one would be managers in terms of like what are some signs of firms facing bottlenecks. Managers spend more time redoing sections than reviewing sections. And this is a this is really dangerous.
Abdullah Mansour: And that's surprising to me to be honest. [00:12:30]
Sam Mansour: Yeah I mean because think about it. Right. Let's say you're reviewing a work paper for somebody. You're in the office, that team member is out on another engagement. They're off in the middle of nowhere doing some kind of audit. You see the work paper and you're like, gosh, this is such a freaking mess. And it's in Excel. And you know that if you correct these formulas, you're going to get to the right place. Okay. So so as a reviewer, you're like, well, look, why don't I just change these formulas, update this formatting. You know, you kind of just spend [00:13:00] because you know what the fix is. You know why they made the mistake. And you know what the fix is.
Abdullah Mansour: Sure. Yeah.
Sam Mansour: So then they end up doing the work for the preparer. Right. So they are essentially kind of redoing the work paper and honestly, like from someone kind of as a newer team members, they have given the comments, even even some more experienced people have said look like this is a simple thing for you to just change this. As a reviewer, why don't you just change it? Why are you leaving [00:13:30] me a review comment? Like, I kind of feel like they give this thing. It's like. It's like the most ridiculous thing I've ever heard, that it's taking you more time to, in their minds, to review and put the comments in there than it is for you to just change it.
Abdullah Mansour: Yeah, but it sounds like you're kind of setting that standard then. Right where? I'll just fix it. But is that kind of a maybe a bad habit to just fix it instead of setting a standard or what do you what do you think about that?
Sam Mansour: Yeah, I mean, I learned kind of in recent time that there's [00:14:00] almost zero benefit to fixing and changing the workpapers yourself as a reviewer, because you're just enabling really bad behavior.
Abdullah Mansour: Yeah.
Sam Mansour: In the environment. And then here's the question. Okay. So you changed a little thing and you fix a little thing in a work paper for them. But then, well, what's the what's the definition of a little thing. Right.
Abdullah Mansour: Oh yeah. Yeah. Where do you stop. Where is that point where you're like, [00:14:30] it's small versus a huge point that they missed and they need.
Sam Mansour: Exactly. So for so for me as a reviewer, I don't like to touch the work papers at all. I like to think of them as like, just like PDF documents that I can't edit. I'm just giving them the comments. Um, that's good for learning. It's fair. And I also kind of teaches them, too, that if they're just going to rush through this, that they're going to have to suffer through the consequences and the pain of changing it. So it actually might teach them to slow down on the next one and not just [00:15:00] rush through it knowing that I'm going to give them review, comment after review, comment after review, comment. And actually, you know what? I even got to this, this stage where I really liked this idea. I actually made a like an Excel with common review comments. Okay.
Abdullah Mansour: So then like I like.
Sam Mansour: Writing and instead of me writing out the review comment, I would just have my Excel open. Like with references A1, A2, A3, R1, r3. And so in the review comment I would just say r1 r5, r6 [00:15:30] r2.
Abdullah Mansour: Can I make it more efficient? Yeah.
Sam Mansour: Yeah. And then what they would have to do is go in there and then they would have to pull up that excel and look at what's R1. Okay. That's what it says. Was R2, because a lot of times like what you'll find is the review comments are like, they're not they're not like brand new made up stuff that we've never seen before. Like generally generally the review comments are your work. Paper references are incorrect. Your dates are incorrect. You're referring [00:16:00] to the you know, there's people in this work paper that you know, Jerry, is it referred to in here? But he left last year and now it's Sarah taking over for him. You're referring to that person in the work paper. Your totals don't total correctly. You didn't connect from the supporting documentation back to the lead. Um, your lead schedule doesn't include all the accounts, so it doesn't tie back to the balance sheet, for example. So there's like things like that that, that, you know, you can just refer them back to, um, [00:16:30] a master. And I will say this like there are some people, some preparers that are like just really good. I mean, they do a really good job. They try really hard, they make a solid effort and you see something in there. It's like, oh, I just need to fix this formula. Because they tried to some these ten rows, but they got 9 or 8 of them by accident.
Abdullah Mansour: Oh, so.
Sam Mansour: Because maybe they were updating something maybe. Yeah. Maybe that.
Abdullah Mansour: Yeah.
Sam Mansour: Yeah, maybe that total tie back to another another work paper. And then they had come [00:17:00] in and update it for something and something got screwed up. So like I'll make that change. Like it's just an honest mistake. They kind of overlooked it. Why not help them out. But but so like what we're really talking about here is people that cause the bottleneck, which are those people who are just not. They're just being um, I won't say negligent, but they're just they're not really caring about the next step and they're just rushing through it.
Abdullah Mansour: Yeah. Totally makes sense. Well, are there are there are there any other signs [00:17:30] that might indicate a bottleneck, or are those the kind of the main ones that you'd say?
Sam Mansour: Yeah, I mean, I'd I say one more. You know, team members don't seem to learn from feedback because they're not involved in the review process. So if you're giving somebody a review comment and you see that you're having to give it to them again and again and again, you kind of have to ask yourself as a reviewer, why is this happening? Why am I continuing to do this? Is it a training issue with the [00:18:00] team member themselves? Is it that they're not like really seeing and understanding how this review process works? Because especially if they're a newer person and they come into an organization and they're they're completing their work and then they just keep getting this review comment. But but for whatever reason, like maybe they think it's normal, right? Maybe they don't understand that that no, we we want to lessen review comments, not increase review comments. So maybe they're just not very familiar [00:18:30] with and understanding the review process. So like if you could take a new person and sit them right here next to you, and you just sat them with them for a day, and you're like, going through work papers and and you're reviewing work papers and they're watching you. They might say, actually, I think a lot of times they would say, wow, like that is a lot more work than I thought. Having to go through and review like that, that is way more than I thought. And so they might have like an appreciation for what's happening in the review process. [00:19:00] Um, a lot of newer people don't understand that, you know, it's costing like if you're, you're a new guy and you're trying to or a girl and you're trying to impress, let's say, the partner in the firm, if your work papers are not great, I don't know if they completely understand that the partner at some point in time is going to probably be reviewing their work papers. And if they look sloppy, that's a bad image for them with that partner.
Abdullah Mansour: Oh yeah.
Sam Mansour: So so it's good [00:19:30] for them to understand how the review process works. Where is the frustration? And I think if they gain kind of like more of the why behind things, like they kind of gain more of an appreciation for what's happening there. Why do we care about quality? We're subject to a peer review. There are some risks there. The partner is responsible ultimately for signing this engagement. And if your workpapers are deficient and something gets caught on peer review, it could cost the partner more so than you because you just leave and go get another job. The partner, [00:20:00] the firm might suffer some consequences. And so I think they understand that. I think that helps out a lot.
Abdullah Mansour: Yeah. Wow. Well, this this process, uh, the bottleneck sounds very, very frustrating and painful to everyone involved, to be honest. So what's the what's the fix? How would you how would you fix this in my mind? Huge bottleneck.
Sam Mansour: Yeah. I mean, I think the first thing is we kind of mentioned this briefly, but but setting those benchmark deadlines or or like little check ins, right. Internal [00:20:30] deadlines. People tend to think our deadline is the deadline. Right.
Abdullah Mansour: So getting.
Sam Mansour: To the.
Abdullah Mansour: Line and that's the only deadline they have is that.
Sam Mansour: Well, let's say the deadline for these audits are June 30th, right. They have to get submitted online to some upload section, you know, whatever by some website by June 30th.
Abdullah Mansour: Yeah.
Sam Mansour: The team is just hearing June 30th, June 30th. They're not backing that up and saying, okay, what's a good deadline for us to have the engagement [00:21:00] completed by? I think a lot of times they'll do that part actually. So they think, okay, we got to have fieldwork done at least two, three, four months in advance or whatever it might be. But then after fieldwork is done, it's good to establish as a fix some internal benchmark deadlines say, okay, all work papers need to be signed off by preparers. All work papers need to have a preparer sign off by X date. Then all of those work papers need to be reviewed no later than [00:21:30] X date by an in charge. Then let's say there's another level of review before the partner they need to be submitted to the partner. So basically there are these strict deadlines for prepares and charges technical reviewers so that they're not piling up at the last minute. Because because again, if we're looking at just that end deadline and we're not breaking it up into sections, phases, you know, internal deadlines, whatever you want to call it, generally it's just human nature, I think, to let [00:22:00] them pile up.
Abdullah Mansour: Yeah, it almost seems like the partner or the manager should have that, that end deadline and then everybody else should have that internal deadline. Is that kind of what you're. Yeah.
Sam Mansour: Yeah. No, I think that's a great way to like actually think of it because that, that that big deadline external deadline a team member preparing a work paper. They shouldn't be thinking about that. They should be thinking my deadline is way sooner than that. Way sooner than that. Right. Um, if they're thinking that it's okay to get [00:22:30] closer to that deadline. There's there's squishing the timeline for everybody else. The client can't think that that's acceptable either. So let's say your deadline is June 30th. They should think that their deadline is like 30 days before that, you know. But the client is the client here is June 30th, and they think I have until June 30th to get this figured out.
Abdullah Mansour: Okay I see. Yeah.
Sam Mansour: It's like a fix in terms of the bottleneck. Also, I like to explain to clients I'm like, look, think of it this way. Think of the deadline like a traffic jam. When you kind of come towards [00:23:00] the end, everyone seems to kind of come in last minute, right? A lot of people like to do that. If you wait closer to a deadline to get this done, you will get into the traffic jam. Okay, so then then don't call me begging for your audit to get issued and saying, where is it? Where is it? No. If you come within, like let's say a month of the deadline you're in, you're most likely going to be somehow in that in that traffic jam. There's going to be a lot of other people similar to you, and I can only do so much. [00:23:30] So don't get into that situation. And typically, like if we're well ahead of the deadline even before field work, the client will say, oh yeah, I know I do not want to be in that place. I'm like, okay, we're in agreement then. So then we then instead of saying our deadline is June 30th, maybe we say our deadline is the end of May and then we back everything up, you know, plan accordingly to get it done by May. And if you do that for everybody, some people will spill into that month of June. But that's okay, right? Because [00:24:00] we're just we're lessening the impact.
Sam Mansour: The other thing is teach seniors how to perform a true self review. So checking documentation, cross-referencing, summarizing key conclusions. There's some key areas that you know when the senior or the in-charge is reviewing a set of work papers, they need to then kind of understand what the level above them is going to look at okay. So like for example, cross referencing referencing from a lead to a [00:24:30] PDF document provided by the client or from a memo to another document. That's something that we want those references between documents to like, be right. So that's a big thing for us. We need to make sure that those seniors or those engagement leads or whatever you might call them in your firm, they are crystal clear on what they should be looking for. Okay. So that it doesn't get to the next level. Like like you don't want them to subjectively [00:25:00] decide, oh, you know, my standard is this. And I'm going to look at these work papers. Right. But then you go to the next level and it gets more strict. So the preparers again ground zero. They need to understand. They have to have those work papers as tight and as perfect as possible. Cross checking those references when it goes up to for example, when it goes up to the senior or the in charge, they need to understand that. They need to double check that just to be on the safe side.
Sam Mansour: By [00:25:30] the time it gets to the reviewer that there should be zero problems. Um, the reviewer about the the the engagement in charge, there should be zero problems at that point. Um, and then I would implement pre-review checklists to ensure files are ready to be reviewed, not still being worked on. Um, this pre-review checklist, uh, it kind of helps protect garbage going into like the review stage. So when we say the review stage, I mean, [00:26:00] in my mind and every firm is probably a little bit different. You had the prepare that prepares the work paper. You have the the senior or the in-charge that oversees that engagement. And they kind of do the first level review then now, now that audit is ready for that technical review, that partner review. However, it might work in the firm, but it's kind of it's like wrapped up and you put a bow on it and it's ready to go, like in theory. I heard someone say once they're like this pre-review checklist. [00:26:30] The person kind of kind of saying, look, it's before it goes to the technical or partner level. It should be ready, as if it's ready to go out the door and be issued. You shouldn't rely on the technical director or whatever they might be, or the partner to finish up some things before it can go out the door, or to answer some questions, or to finish some kind of documentation.
Abdullah Mansour: They should just double check it and make sure that there's nothing huge [00:27:00] that's wrong in there. It should just be double checking, making sure everything's good to go.
Sam Mansour: Yeah, I mean, it's kind of like a you should be targeting best case scenario that the partner or the technical reviewer has zero comments at that stage. Okay. Yeah. So when we say pre-review, I mean review of the partner or the technical person that pre-review checklist should say, like, have you checked this? Have you checked this? Have you checked this? So then when and and so [00:27:30] when it goes into that technical partner review again best case scenario is that there's almost it doesn't happen. There's zero review comments by the partner or technical person.
Abdullah Mansour: Yeah that totally makes sense. Well how can how can a review become more of a learning opportunity instead of instead of a bottleneck?
Sam Mansour: Yeah, I mean, if we're able to kind of set some good practices in place so that everything is not rushing to the last minute, now [00:28:00] we kind of have a little bit of breathing room for review comments to become a learning opportunity. If you're constantly rushed, disorganized, everything's piling up. It's really difficult for it to be a learning opportunity because you just need to fix it, get it out the door and get it done with and move on to the next one because you're behind, like it's just really difficult. So it really starts with first making sure that you have a really good organizational system in place. Um, and then reviewers should give [00:28:30] context. So so again, if everything is situated or organized, reviewers should give context, not just the fixed but why it matters. So like a lot of times a reviewer might say, just fix this, just change this and update this, and this is wrong, right? You look at it and you're like, okay, fine, I'll go and change that number. Right? So like let's say for example, the number should be 4.5 million. But what you have in there is 3.5 million. The reviewer says that number is [00:29:00] wrong. It should be 4.5 million. And you're like okay, so you go in there and you just type in 4.5 million, you know?
Abdullah Mansour: Yeah.
Sam Mansour: Like so what I mean, they obviously didn't potentially didn't learn anything unless it's like, oh shoot a wrong formula or something. You know, it's an obvious thing. That's a basic example. But I think there's other examples where you want to give a little bit more context so they understand what's going on and they can learn from that experience. Right. So like let's say for example, [00:29:30] in this scenario you say you say that, hey, you know, let's say it's not a clear like formula error or something, but 3.5 million versus 4.5 million. You tell them, look, you know, maybe you thought it was 3.5 million based on this calculation. But let's say let's say there's a multiple journal entries that made up that number. Maybe they reversed something. Maybe they didn't include something. Maybe they missed the [00:30:00] journal entry, whatever it might be. But you need to explain to them why you're suggesting going from 3.5 to 4.5, if there actually is something other than just a simple error, or actually, let's say there is a simple error. Let's say that they let's say it's kind of a not a super complicated formula, but a formula that adds up a bunch of different cells in different places. Okay. And let's say that that the prepare just doesn't think to add a specific cell, not because they missed it, but they don't think it should be [00:30:30] included in the total.
Abdullah Mansour: Yeah.
Sam Mansour: Right. So so instead of telling them just include this cell. Right. Maybe you want to tell them, hey, I would include this. And by the way, this is why we would include this, this number in that total.
Abdullah Mansour: Oh, sure I see. Yeah.
Sam Mansour: Yeah. Um, and then to make it more of a learning opportunity, I would include juniors in the review conversation debrief as a group and use it to level [00:31:00] up the team. So like if we ever do debriefs, which a lot of firms like, I tend to kind of find that they don't really do that, but like, let's say we get done with the job, we prepare it, we review it, we're done. Let's sit down and have a conversation, say, hey, look, you know, the team really kind of struggled with this section. What was the issues here? Why do we have so many review comments in this area? Why do we get the engagement so late in the process? I mean, if we have a conversation and the team knows we're going to have a conversation the next time they go out and do another engagement, [00:31:30] they think they might be a little bit more thoughtful about what's happening instead of just like rushing through it. Because let's say, for example, you have a team meeting, a debrief, and wow, like that job was really close to the deadline. We don't like that. So we sit down as a group and we're like, why did that happen? Um, and then the, the, the in charge of the senior says, well, it's all the client's fault, which is like, it's funny because the client always blames the auditors, and the auditors auditing team always seems to blame the client.
Sam Mansour: I [00:32:00] just, I mean, they always throw us under the bus, and then we always like to throw them under the bus. I mean, it's like everyone's just pointing at everybody else. So let's get into our debrief meeting. And I've heard this a lot. Well, the client this and the client did it. Give us that. And for me, like, if I take a critical perspective on this, There's always something that we could have done better, right? How often do we communicate with the client to follow up on open items? Let's say the team is like we'll follow up frequently. I'm like, well, how frequently? Once every day. Once every other day. Once every what? A lot of [00:32:30] times you'll find that like once every two, three, four weeks, you know? So of course, forget about it. So I'm like, well, that's an opportunity to improve. So we're learning from that. And then I'm like, hey, look, as the partner here, I want you to to follow up with a client every 3 to 4 days or come up with some kind of understanding for a deadline with them so that we don't have a bottleneck again. And you have this conversation with them in a group setting.
Sam Mansour: Now, that person is taking that idea when they go out to the next job, if they're thinking the client is going to if they're going [00:33:00] to try to blame the client on delays, they're going to they're going to know that I'm going to debrief them and I'm going to have this conversation with them, and I'm going to ask them, why are you doing this? What changes could you make? And so they're going to want to avoid that whole experience because we're going to talk about it. And they're going to be more proactive. Active. So I think that debrief in that conversation is super important. And then document common errors and turn them into mini trainings or tips for future engagements. We kind of talked about this a little bit right where [00:33:30] I said, hey like create a legend of all the review comments. You can use references. And actually that that's really good because people can go look at those, right? So let's say you have a section for common review comments and cash, and you have a one through a 15. The team members can take that. Those common review comments that we just discussed document common review comments and common errors. And they can review their own work papers against that. Okay.
Abdullah Mansour: I see. Yeah.
Sam Mansour: Reviewers can use it to be more efficient to refer. And you can [00:34:00] also use it in training instead of having to create PowerPoint slides.
Abdullah Mansour: And oh, sure.
Sam Mansour: On a screen, you know, just open up Excel and say, okay, look, guys, of these 15 common review comments in cash this season, we really struggled with six of them, right? We kept getting a lot of review comments and on these sets. And then we can kind of go in and say, okay, well why are we getting review comments? What was the confusion? And then maybe we can kind of figure out we [00:34:30] can have a conversation to figure out how do we resolve them. So then the next cycle that we go through, best case scenario is those six common review comments. Now maybe go down to 1 or 2. And so that training of giving us an opportunity. But here's the thing. If like as auditors, we always talk about documenting in our work papers. Right.
Abdullah Mansour: Sure.
Sam Mansour: But what we don't really do very well, I think is document anything outside of that. So like for example, review comments. We just put them into [00:35:00] the software, we send them off to people, but we don't keep track. We don't keep track of them. Okay. Yeah. It's really good to keep. It's a good habit for us to keep track of them so everyone can see them, can remember them, can use them for training. It's a little bit of extra work, and I think that's kind of where people get a little bit uncomfortable with some of these ideas, is that they just want to do the job, but they don't want to put in a little bit of that extra work. But that little bit of extra work of this documentation of these common errors, it's easy because you don't have to sit there and [00:35:30] spend a week trying to think, what are all the common errors in document? No, just.
Abdullah Mansour: Add.
Sam Mansour: An engagement. Just write them down. Those are the best. That's the best time to do it. So build them as you go. But the reality is a lot of us don't take that extra time to do that. We just want to review the work papers and just get done and move on to the next one. We don't want to take a little bit of extra time to create a document, and then put those common review comments in it, but by not doing that, we are causing ourselves a lot of time in the future across multiple, [00:36:00] across multiple, multiple people, across multiple work papers. It's it's it's it's it's wildly time consuming if you think about it, to do it across different people, different engagements, and over time, they needed to just open up a document and document it.
Abdullah Mansour: Yeah. Yeah, definitely. You know, Sam, back to your back to your internal, uh, deadlines and all this just really is very relatable to me. I used to work in high, high tech manufacturing, and we would we would put, uh, specs on [00:36:30] what we want to build, um, and then send it to Asia, and they'd build it. But we had to, uh, have a very detailed sheet before we sent it over. And they had a very low tolerance for any mistakes made, because we had an incident where it cost hundreds of thousands of dollars in a mistake because they simply just the review time was like 12 hours. Well, we had that huge mistake that cost a lot of money and they were very frustrated. And so we had to implement new rules where we set our own internal deadlines for a week in advance, to have them reviewed by engineering, [00:37:00] supply chain, all these steps. So then we sent it to Asia to manufacture the it reduced substantially all the mistakes that could have been. So this is very relatable and it totally makes sense to me. It sounds very, very important that you have those internal deadlines and processes in place.
Sam Mansour: And then think about it. If your deadline is the deadline, right, like it's due to go to Asia on Friday and that is our deadline. I mean, it's like people always have something. Someone gets sick, something new comes [00:37:30] up that we didn't expect. I mean, it's like having your like, especially in auditing, having your deadline as a firm be the deadline that it's actually supposed to go out like and not having a deadline before like. Well that I see it very commonly in the industry. And I think it's just like sounds kind of harsh. I think it's insane. Like it just causes.
Abdullah Mansour: Oh yeah, I.
Sam Mansour: Bottleneck like galore.
Abdullah Mansour: It simply didn't work. And it caused a lot of very late night meetings where you're up until 4 or 5 a.m. trying [00:38:00] to fix that minor mistake. So yeah, the internal deadlines was a game changer for us. And I can see how in auditing it would be a massive Of shift and how you.
Sam Mansour: And I would say a lot of audit firms do not have internal deadlines like do not, do not, do not do.
Abdullah Mansour: Yeah. That's that's tough.
Sam Mansour: Huge I think and I think like people are hesitant to implement them because the team is leery of them. The client's not used to them, but it's probably one of the best decisions that could be made.
Abdullah Mansour: 100% [00:38:30] I totally agree with that. Well, Sam, what are some long term benefits of fixing review bottlenecks in your opinion?
Sam Mansour: Yeah, I mean, the long term benefits are I mean, just insane. Uh, I mean, number I mean, number one, like, let's just be honest, the massive reduction in stress.
Abdullah Mansour: Like, oh.
Sam Mansour: Bottlenecks.
Abdullah Mansour: I can imagine.
Sam Mansour: So stressful. Um, anxiety goes up, stress goes up, frustration goes up. [00:39:00] Uh, number of hours goes up. I mean, just across the board. Bottlenecks burn people out. I mean, like the list. The list of things that can that that that bottlenecks, problems, the bottlenecks bring is massive. Like in my opinion, it if firms didn't have bottlenecks, I think, I think they would be much different places to work. But but for whatever reason, it's interesting. We [00:39:30] just accept the bottlenecks are the world that we live in, like I've met so many people that basically just say, this is just part of the industry. We can't control the clients. It is what it is like, insane. So basically what what are some other benefits? I mean, more time for more more time for strategic work and client interaction. Because you're not rushing, you're not stressed. Half of your teams. Um, no. Like none of that last minute chaos. I mean, who wants to live in a world like that, which a lot [00:40:00] of people.
Abdullah Mansour: Yeah.
Sam Mansour: Um, better margins and more capacity to grow the firm. I mean, if you're if you're running into a bottleneck, how the heck do you grow the business? Because the bottleneck basically.
Abdullah Mansour: Is.
Sam Mansour: A major limitation. I mean, you just you can't really grow beyond where you are with those bottlenecks. You can't live, in my opinion, as stress. It's just so stressful. I know I said this, but fixing bottlenecks changes. I think the firm [00:40:30] as a whole.
Abdullah Mansour: And the professionalism, I mean, it seems like that would just skyrocket, right? If you get everything done on time and in a, you know, professional manner, that would just make you make the firm look a lot better, too. I'd imagine so.
Sam Mansour: Yeah. Yeah.
Abdullah Mansour: Well thank you, Sam. That's huge. Uh, thanks for all the insight. And then up next we have managing tough client relationships and maintaining professionalism even when things get tense. Stay tuned.