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Accountants enjoying downtime over the holidays know they will return in January to the notorious “busy season”, when audit firms race to sign off on clients’ annual financial statements, as staff work late nights and weekends. It is a rite of passage for those new to public accounting, as well as the reason many decide the career is not for them.
One Big Four firm in the US has been trying to make it less stressful, and is trumpeting some early success from pulling more audit work forward to before year-end.
KPMG said the number of people working more than 50 hours in total across the eight weekends of busy season for public company auditors fell from almost one-third three years ago to less than one-fifth last year — and it is on course to reduce it further in 2024. Twenty-nine per cent of staff worked no weekends at all last year, up from 18 per cent two years before.
Spurring the change has been a set of targets imposed two years ago to finish certain percentages of audit work for large public company clients by deadlines in October and December, and a vow to cut the pay of senior executives if those targets are not met.
“We needed to take some of the top off the mountain in January, February and March,” said Scott Flynn, vice-chair for audit at KPMG US. “Younger people think about work-life balance differently than we did when I was starting out, and so we’ve tried to meet our professionals where we think they need to be met.
“Also, my work at 10pm or 11pm is not as good as my work at 4pm and 5pm. Especially not in January and February.”
The matter became urgent, Flynn said, because more audit work is now done remotely, rather than on site. “There are not the natural breaks that you get when you’re in a client conference room or in an office, having social interaction. We need to think about mental health differently.”
The revamp of work practices — which became possible because of new technology to monitor the progress of an audit — was initially introduced for audit work on large US clients. A significant portion of that work involves judging a company’s internal controls, which could be done at any time of the year.
This year, however, it has been rolled out to all KPMG’s public company clients and most private company audits as well. The firm said it pulled 10 per cent more work forward to before year-end in 2022 than it did in 2020, and the figure is set to be about 20 per cent in 2023.
Executives hope that the exercise will have benefits beyond staff morale. Clients have had to accept more year-round interaction with their auditors, but Flynn said it should improve audit quality.
“You’ve brought forward the issue identification process and you have more capacity to deal with the unexpected in January and February.”