Our client: a commercial service provider. An ambitious company with considerable growth objectives and a tough focus on automation of processes. IT: the hobby of the CFO. It was also a company that was not easily satisfied with its auditor. The client had already worn out two partner-senior manager combinations within three years and now it was my turn together with a new partner.
The company was strongly automated and therefore I called for the help of a colleague, an EDP-auditor, to do the audit together with his team. We had a promising start by engaging numerous conversations to create a clear image of the IT-environment and the possibilities to rely on controls in the automated processes. We came to the conclusion that the IT-environment was a lot like “spaghetti”: one massive mix of programs and interfaces. It was hard to get insights and even harder to rely on in our audit, but there were no alternatives.
Then, my EDP-colleague and I went to discuss our first impression and the basic outlines of our integrated audit approach with the CFO. After waiting for a while, we were invited into his office. “He could spare some time for us now”. He settled himself in an easy position, got a soda can from his fridge, stretched himself in a chair and put his feet on the table in the meeting room where we were sitting. There: he was ready. His office was full of pictures of all types of sports cars, trophies and other tangible objects that reflected his interests and successes. A room like this always has the trigger to start a casual conversation. So I did, but it was a mistake. One he was waiting for. He did not stop talking about his hobbies and successes. Between the lines he made it clear that we knew we could never live up to him. The only thing we could do was listen, nod from time to time, or express our admiration. At one point the monologue was about cakes and the name of a type of flour (it was something about the birthday of one of his kids), but it was the first question he asked me: “Oh, you should know, what it is called?”
Eventually I saw the opportunity to end his verbiage and change the subject to what we came for. I took over and described our first impressions and how we were going to handle the audit. Our focus would be heavily on the automatization. For some time he did not say anything. Then he got cold and angry. “You assume you will do your audit that way, but it will not. I will not allow it”. I maintained my businesslike composure and explained that the procedure of the audit was our responsibility as auditors. Of course he did not listen. The conversation was over and we could go. Within a week I received a voicemail of the partner that the CFO was not getting along with me and I was taken off the audit.
Afterwards I thought a lot about this conversation. What did I do wrong and how could I have handled it differently? What should I have done earlier to earn the respect and confidence of the CFO? I felt like a major failure. Even when my successor was taken off the assignment within a year, I still did not really understand. Only much later I figured out that it was not me personally. The CFO did not want an audit done well. He did not want the chairman of the board and the supervisory board to know about the mess concerning the IT. I was just a small piece in the game he was playing with the audit firm for a very long time already. A game of intimidation and the audit firm let him because they wanted to keep the client. Afterwards, it was really a good thing that I was taken off this audit so soon. I could never have done what I felt was necessary in the audit. Nevertheless, it would have been better if I would have realized earlier that it was a “mission impossible” (the signals were very present), so I could have kept the honor to myself and quit. But that is a matter of wounded “pride”.
It was an unpleasant, but very useful experience. Power in accountancy is apparently also a factor and games are being played, that much was clear. The trick is to recognize those situations on time, keep doing your own thing and keep your back straight, even if there is a storm. That is keeping faithful to yourself. Of course it is a lot better if you do not have to do it completely on your own. The organization you are working for should support you, believe in your strengths and should not let you down as soon as a client starts complaining. If you are in the position to give that support, you should do it!
