Posted by: LYF | September 21, 2009

Templates, good or bad?

Even though they’re helpful, templates make me uneasy.  There’s a fragmentation of knowledge among professionals, a trend that’s the direct result of complexity, which is the direct result of professionals.  As the economy gets more tangled up, we adpat to make financial statements more relavent.  So how do we cope at the professional level?  We create checklists.  We create templates.  We create lists with checkboxes that ensure we’ve covered our bases.  Is that good?  Is it just a crutch?

This may surprise some of the students entering the profession, but it is possible to complete all the fieldwork on an audit, without knowing what you’re doing.  Well you have to know what you’re doing – you need to understand what the audit procedures require you to do.  But it is possible to perform them without a thorough understanding of the audit or its context.

Templates create a knowledge bottleneck.  They put a buffer between yourself and GAAP.  Where the knowledge becomes trapped at the template level.  Some GAAP may trickle down, but it’ll happen passively.  The most frustrating part of it all, is that it’s necessary given the current way accountants think.  They think in terms of meeting criteria, instead of focusing on comprehension.  Did I disclose all the related party transactions vs. why are their related party transactions in the context of this audit and what issues do they raise?

Is it really possible to conduct a risk based audit, through the use of templates, which already have a built in risk based approach?  Was it really creative writing when your teacher asked you to write an essay – granted the essay had a introduction, conclusion, three body paragraphs and a thesis that was included in the last line of the introduction and reiterated in the conclusion?  I doubt it.

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Responses

  1. Wild tangent first: you can be plenty creative in essay *format.* If you want to write some freestyle prose that’s another story altogether. All you mad bloggers can go crazy with that. If you’re good at what you do people will read what you’re writing despite a complete lack of a formal format. But people who suck need a frame to organize their thoughts until they get good at it. 😉

    Templates killing peoples’ ability to understand what they’re doing? Yes, definitely a nasty risk. It helps to challenge everything you do, even standard template instructions, to combat that.

    But that all requires someone willing to stretch their mind.

    • “But people who suck need a frame to organize their thoughts until they get good at it.” haha yeah

      Templates bug me sometimes. I just needed to get that off my chest.

  2. I’ve seen good templates go bad that’s for sure, but on the industry side. Templates usually survive their progenitor, then morph and evolve into sometimes dangerous configurations.

    I’ve been thinking about this issue and reading some other stories that speak to this. Auditing a complex spreadsheet, for example, can be tough. I should know, I’ve built some mad crazies into my fair share of them over the years.

  3. Templates can also save a HELL of a lot of time, especially in an industry that regularly involves long, extended hours.

    Why redo something when it’s already done and ready to go? Especially something as snooze-inducing as setting up a working paper?

    • “Why redo something when it’s already done and ready to go? Especially something as snooze-inducing as setting up a working paper?”

      Because then you actually have to think. And I’m not talking about things like amortization or continuity schedules – those are pretty straight forward. I’m talking about audit risk and response templates. The specific schedules that provide the architecture for a file, which colour the actual work that gets performed.

  4. I definitely agree with you that templates take away from learning. Having said that, until we move away from a time based billing system, templates are going to exist in public accounting.

    The only reason I use templates is to be efficient. The emphasis on budgets, doesn’t allow me a lot of time to sit down and learn. The partners don’t care if I learn or not. They just care about recoverability. They expect you to know everything already.

    End of the day, no one care’s if you’ve just completed a perfect audit. All they care about is whether you’re compliant with GAAS and you’ve performed the work in the shortest amount of time possible. I get told this on the field all the time, which sucks because I want to learn and do a great job.

    • “End of the day, no one care’s if you’ve just completed a perfect audit. All they care about is whether you’re compliant with GAAS and you’ve performed the work in the shortest amount of time possible. I get told this on the field all the time, which sucks because I want to learn and do a great job.”

      It’s so true. And I hate that. That’s personally not good enough for me. I try to change things little by little. You definitely can’t reinvent the entire structure of an audit approach all it once. It has to happen organically, slowly, as you learn, taking away the good stuff from other files and finally resembling it into a better form.

      Sometimes, I just do this stuff on my own time. I hate when things aren’t quite “right.” You know? When you look at something and think, “this sucks and I can make it better, just leave me alone and let me fix it.”

      It bothers me at a base level. I have to fix it.


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