251–260 of 303 posts
TBH, I don’t understand why anyone would be naive enough to hire EY and then actually trust them.
As a publicly traded company, you have to hire auditors. If you don’t like EY you can go to PwC, KPMG or Deloitte, but what’s the difference?
I worked at Accenture as an MD for several years, primarily on innovation and transformation programs. I have plenty to say about them, but I think the key driving factor for all of the grift and awful performance has a lot to do with how they operate, which is to sell in a big program, then pull a switcheroo and try and pack a project with as many low-paid MBAs as possible – kids straight out of college tasked with…
On the consulting side of the audit firms that you're talking about, I think people misunderstand why companies hire big consultancies. It is not for performance. It's for minimizing risk . And not "risk that the project will fail to hit its schedule." Rather "risk that the company is unable to deliver the thing we're asking for at all." When I've seen big consultancies fail, it almost always goes like this: (1) big…
In my company, to hire a company like IBM or Accenture we have to propose a plan, which has to be approved by many layers of bureaucracy. This plan includes a budget. A real risk is that the consultant underdelivers, or we need more budget. Then we have the sunk cost problem, and we have a bureaucratic one as well to increase the budget. And the consultant already costs more than hiring on our own and doing it in house.
> Auditors insist that their services cannot be treated as a guarantee that accounts are truthful, and note that sophisticated frauds are by their nature difficult to spot. As someone who knows nothing about this area, I don't understand why audits won't always detect fraud. I would naively assume that auditors have access to all financial accounts and records of cash flows and they make sure they all add up and are…
Auditors have access to all the financials, but they only audit a statistically significant sample, because it would be incredibly expensive to audit every transaction. Fraud can be easily detected if one employee is committing it. Fraud is substantially harder to find if two employees are involved, specifically 2 employees involved in internal controls. For instance, if you have a policy that all checks paid over $1…
Your comment was the first in this comment section where everything was coherent and on point. While everyone else is spitballing, you hit the nail on the head. I was not surprised at all that you revealed you’re a CPA because the accuracy of your comment perfectly conveys your credentials. Funny how things like that can come through.
Source: am also a CPA
Earlier quoted context omitted.
On the consulting side of the audit firms that you're talking about, I think people misunderstand why companies hire big consultancies. It is not for performance. It's for minimizing risk . And not "risk that the project will fail to hit its schedule." Rather "risk that the company is unable to deliver the thing we're asking for at all." When I've seen big consultancies fail, it almost always goes like this: (1) big…
Nailed it. My only beef is that when you’re going line-by-line on the deliverables, arguing over the “definition of done” that you’re actually crushing whatever good will and budget remains for the innovation a company actually needs. And when I say innovation I don’t mean gravity boots, I just mean a progressive use of robust tech, easily understood processes, and a general aversion to complexity - so you don’t have…
This brings back my PTSD. "I have never seen so many fine men wasted so badly"
Earlier quoted context omitted.
On the consulting side of the audit firms that you're talking about, I think people misunderstand why companies hire big consultancies. It is not for performance. It's for minimizing risk . And not "risk that the project will fail to hit its schedule." Rather "risk that the company is unable to deliver the thing we're asking for at all." When I've seen big consultancies fail, it almost always goes like this: (1) big…
Nailed it. My only beef is that when you’re going line-by-line on the deliverables, arguing over the “definition of done” that you’re actually crushing whatever good will and budget remains for the innovation a company actually needs. And when I say innovation I don’t mean gravity boots, I just mean a progressive use of robust tech, easily understood processes, and a general aversion to complexity - so you don’t have…
There's no good outcome from a knock-down, drag-out fight for either party when it goes that badly.
And yeah... I've observed my fair share of "So, we all agree we're going to call this a success? Great!" + director / VP takes a new job before it explodes.
I do think the incentives are entirely wrong for auditing. Auditors should be paid for by shareholders. Even if it decreases your dividends, you _want_ to pay for an auditor to provide reasonable assurance that there is no funny business going on with your money. In fact, that's how auditing began. The current system provides for conflicts of interest where partners are incentivized to please the board of directors that hire them and pay them large sums of money.
However, this doesn't lead straight to all auditors covering up fraud, and I feel that many people in these comments are overly critical. Having skepticism of the process is great (and auditors emphasize professional skepticism themselves), but I don't think we should throw the baby out with the bathwater as the current system does still provide a lot value. I also think many people here believe auditors at Big 4 firms are forensic accountants, which they are not. In the US, the FBI employs the forensic auditors many here may be thinking of. The auditors that EY employs are there to provide an audit opinion that expresses reasonable assurance that the financial statements are fairly presented. It's a very tough job that cannot be performed perfectly in its current form yet works remarkably well, all things considered. Finally, EY is a very large company that's really made up of many individual pieces that share a larger name but are structurally different, particularly between regions such as the US and Europe. EY in Germany certainly deserves the negativity they're receiving here, but that shouldn't necessarily be applied to all employees of EY all over the world. It's an accounting firm made up of thousands partners who are CPAs (in the US at least).
The exciting thing is that given the nature of accountancy, the industry is extremely conservative and open to disruption. However, that disruption has to adhere to numerous rules and regulations that would probably frustrate many entrepreneurs here. Most auditors are working with Excel and PDFs and do mindless work at the lower levels. A lot of this is getting off-shored, which is lessening the quality of the work. If a new technology was able to be designed that could overcome the shortcomings of humans manually using Excel and PDF markup tools while providing a higher quality of work than the off-shore work many in the industry are using, there would be a great opportunity to replace jobs at the lower level - boy I don't like saying that out loud. Hopefully it would allow for new employees to focus more on judgement based decisions using their expertise gained from obtaining the difficult to attain CPA license. They say that every year at a Big 4 accounting firm is equal to two years in industry, and I certainly believe that. Based on my experience, I strongly believe that licensed CPAs that come from auditing firms know far more about the ins and outs of businesses than the MBAs at consulting firms like McKinsey that many here seem to be conflating them with.
Perhaps I should join an accounting software company. It can be easy to forgot how much expertise I have as a CPA when I was surrounded by them in my previous career. Yet I have found that the software companies I have reached out to undervalue my CPA and overemphasize leetcode skills, which is truly a shame. If anyone is interested in a decent software engineer with a CPA to add, I'm open to talking!
I worked at Accenture as an MD for several years, primarily on innovation and transformation programs. I have plenty to say about them, but I think the key driving factor for all of the grift and awful performance has a lot to do with how they operate, which is to sell in a big program, then pull a switcheroo and try and pack a project with as many low-paid MBAs as possible – kids straight out of college tasked with…
I worked at Accenture as an MD for several years, primarily on innovation and transformation programs. I have plenty to say about them, but I think the key driving factor for all of the grift and awful performance has a lot to do with how they operate, which is to sell in a big program, then pull a switcheroo and try and pack a project with as many low-paid MBAs as possible – kids straight out of college tasked with…
On the consulting side of the audit firms that you're talking about, I think people misunderstand why companies hire big consultancies. It is not for performance. It's for minimizing risk . And not "risk that the project will fail to hit its schedule." Rather "risk that the company is unable to deliver the thing we're asking for at all." When I've seen big consultancies fail, it almost always goes like this: (1) big…
The other big risk is: 'Will _I_ get in trouble, if the project fails?'
I worked at Accenture as an MD for several years, primarily on innovation and transformation programs. I have plenty to say about them, but I think the key driving factor for all of the grift and awful performance has a lot to do with how they operate, which is to sell in a big program, then pull a switcheroo and try and pack a project with as many low-paid MBAs as possible – kids straight out of college tasked with…
I work as a Client Partner for a $1B+ consulting firm that comes in and cleans up after these situations. We bring in seasoned, experienced consultants with the functional knowledge that these big consulting firms don’t have. And even though our consultants are more costly on a per head basis, we’re more cost effective overall, because we do more with less.
I always admired the big consulting firms until I realized how consistently they fail to deliver. It’s hard for the clients to fix it because they genuinely think they are getting the best. It’s sad and laughable. Eventually they figure it out. Usually when a firm like us comes in and exposes the dysfunction by getting a few consultants in there that know what they are doing and running things like it should. And it generally comes down to a lack of leadership— by both the client and the big consulting firm. They point the finger at each other. But also it’s just a lack of experience by those running/implementing the program. Staffed by consultants who read all the books and go to the trainings and classes but have never been in industry and been in the clients shoes.
I worked at Accenture as an MD for several years, primarily on innovation and transformation programs. I have plenty to say about them, but I think the key driving factor for all of the grift and awful performance has a lot to do with how they operate, which is to sell in a big program, then pull a switcheroo and try and pack a project with as many low-paid MBAs as possible – kids straight out of college tasked with…
It’s true. I work as a Client Partner for a $1B+ consulting firm that comes in and cleans up after these situations. We bring in seasoned, experienced consultants with the functional knowledge that these big consulting firms don’t have. And even though our consultants are more costly on a per head basis, we’re more cost effective overall, because we do more with less. I always admired the big consulting firms until I…