Here’s what you’re looking for: Alan Anderson

How are you assessing your team?

By Alan Anderson, CPA
Transforming Audit for the Future

I’m fortunate to have two great former auditors working with me in Accountability Plus – my son Tyler Anderson and Corey Schmidt, who met working together as auditors. But that firm – like most firms – was focused on total hours worked and realization rates, and had no tracks for auditors who didn’t fit in the normal staff to senior to supervisor to manager to partner progression.

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As Corey told me, “Tyler and I were good with workflow management and managing processes, and that’s what our firm should have had us focus on.” Corey demonstrated that when he was assigned the employee benefit plan practice at that firm, and through his leadership, improved fee realization from 60 percent to 100 percent.

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Empowerment is for the whole organization, not just the rookies.

By Alan Anderson, CPA
Transforming Audit for the Future

Empowerment means that teams feel like they have ownership over the outcome, outputs and the process of what they are doing. They need to feel it’s OK to try doing things differently and even to make a mistake – and learn from it. The quality of everyone’s work improves when they have the confidence to present new ideas, and to push back when they think there’s a better way to do something. And empowerment delivers results – especially when it is partnered with owned accountability.

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Unfortunately, most of us have a better idea of what an empowered team and empowering managers do not look like than what they do look like. Let’s look at a few of the ones you may have seen in your time working.
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This doesn’t overlook accountability. Quite the opposite.

By Alan Anderson, CPA
Transforming Audit for the Future

I don’t know if it was luck or by design, but when I started out at McGladrey, I landed on a team that was already doing the kinds of innovative work that I coach teams today to try out. I’ve never been a status quo type of person, so that resonated with me. I was always trying to find a better way to do things.

In my first six months, we were already working with data, using the primitive data software tools available back then, or, more likely, that we built ourselves. I was in an environment that created the art of what’s possible. We were willing to try new things. I didn’t have mentors or co-workers who would tell me “That’s not the way we do it here,” so I was able to actually do the things I thought about.

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Audit Has Become an Exercise in Filling Out Forms

Back then, at the beginning of my career, we weren’t under fee or time pressure. We were encouraged to talk to the client, to ask questions and to understand their business. But as fixed fee and fee pressures started to grow, the mindset of audit became focused on getting the work done quickly, not on providing insights or value to the clients. The empowerment mindset that I got from my team in those early days began to fade.
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Artificial intelligence and other technologies challenge us to understand what these tools can tell us.

By Alan Anderson, CPA
Transforming Audit for the Future

“The only thing we know about the future is that it will be different.” – Peter Drucker

A big challenge for firms has always been change management. We’re all used to doing our work the way we’ve done it for years. Many auditors learned to audit by looking at last year’s workpapers and repeating that approach, but with this year’s numbers. So when I tell groups of auditors that the way we’ve been auditing since the dawn of time will have to change, there’s pushback.

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Change is hard. No one wants to change unless that change will bring significant, measurable results. Implementing just one or two of the ideas I have discussed in my posts can be uncomfortable and unfamiliar. Innovation takes most auditors way outside their comfort zone. But change is also essential, unless we’re all willing to see our profession go the way of the dinosaur.
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Not everyone needs an accounting degree.

By Alan Anderson, CPA
Transforming Audit for the Future

Firms these days are throwing technology at audit and calling it innovation. But if you try to roll out too much at one time, that’s a disaster. Your people won’t have any time to talk to the client and figure out what’s going on in the business if they’re too busy trying to figure out how all the pieces of technology all work together.

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A better approach is to prioritize the technology rollouts and cut those in half. Focus on the two or three that are the most important. If you try to do too much, your implementation will fail. A partial implementation won’t get you anywhere. Partial implementations tend to result in complicated workarounds, so the new tech not only doesn’t save time or effort, but it actually makes it harder to get the work done.
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Don’t limit your choices to those developed for accounting.

By Alan Anderson, CPA
Transforming Audit for the Future

For years, as I’ve been visiting firms all across the country, I’ve asked them, “Do you honestly feel that you’ve achieved a substantial return on your investment of technology in the audit?” And they tell me, “Well, we’re now at three monitors in the field.” I remind these firms that I haven’t asked about their use of computers and peripherals. Every firm is using technology, but few evaluate the return on investment they’re getting.

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I’m a huge believer of embracing technology, but I think we need to think differently about how we use it. In my view, the current state is nothing but tremendous opportunity for all of you to learn what all these new tools, from Mindbridge to Inflo and everything new that we haven’t even conceived of yet, can do. They all accomplish an objective. It’s just a matter of figuring out which one you want to do, and go and dive in.
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Technology that finds all the needles in the haystack is better than sampling.

By Alan Anderson, CPA
Transforming Audit for the Future

Most auditors have grown up their entire career with a balance sheet orientation. “I can audit any balance sheet,” is a common defense against making any of the changes needed to move into the future. It is not an easy task to think about a data-driven orientation.

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But the amazing part of moving to a data orientation is that it deepens your understanding of your client. You understand how data moves through their systems, a perspective you cannot have if you just look at the balance sheet. You start asking your client deeper questions, so you understand what these transactions do. I’ve had partners tell me that after they work with this data-driven approach, they’re embarrassed by how little they previously knew about their clients. Conversations with your client are more profound, more valuable and more relevant when they focus on the KPIs specific to a client and their industry.
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“Do you believe that the person who worked with you on this job could run this job next year?”

By Alan Anderson, CPA
Transforming Audit for the Future

Over the last year, we’ve noticed that firms are grappling with a new problem left over from the pandemic: the audit staff who became seniors during COVID-19 missed out on a critical key to success.

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While supervision and review of new staff has never been great, COVID-19 made it worse. Most firms focused primarily on getting the work done remotely and neglected professional skills. Then, firms hired many new people because of the massive turnover.

Now that firms are in their 50th month of busy season, everyone has settled into some form of hybrid. However, most firms still haven’t tried to seriously resurrect the importance of supervision, review and holding people accountable.
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About to jump in with technology? Hold on.

By Alan Anderson, CPA
Transforming Audit for the Future

“If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.” – Albert Einstein

Innovation means doing things differently and doing different things. But what does that mean in practice?

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I see audit firms around the country who set up “Innovation Teams,” or appoint someone to be the Chief of Innovation. The problem is that if these are home-grown teams, or if no one on the team has ever had any experience working with anything other than a traditional audit firm, at best, their efforts will be like moving around deck chairs. Many of these Chiefs of Innovation don’t have an innovative bone in their bodies, and they don’t know what they don’t know. All they know is the old way of doing things.
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Six roadblocks to avoid.

By Alan Anderson, CPA
Transforming Audit for the Future

“We cannot solve our problems with the same thinking we used when we created them.” – Albert Einstein

When most auditors hear the word “innovation,” they think it has to do with getting more technology. But that’s only a small part of what innovation means. Innovation isn’t just throwing more technology at your audit processes. That approach is often just replicating with technology what you have done in paper for decades.

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According to an article in Forbes, “Innovation is the rethinking or reimagining of a business process that already exists.” Applied to audit, innovation is reimagining what audit is and what audit can be. It’s the transformation of audit from a commoditized compliance-only function to a sought-after and highly valued service that produces benefits to the clients who use that service and to the firms who provide that service.
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