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  • Charles 1:59 am on August 6, 2010 Permalink | Reply  

    Closing a Chapter 

    As I write my final posting of the term, I cannot help but reflect back to the beginning.  Upon accepting the offer to intern at the Federal Deposit Insurance Corporation (FDIC) I immediately began second guessing my decision.  In theory it made no sense for me to accept the position.  By May 2010, my Master’s of Science in Accounting degree requirements were already fulfilled, I had accepted an offer to join Ernst & Young as an audit associate in October and I was in the midst of my CPA exam preparation.  Neither time nor necessity really encouraged me to pursue the internship.  However, I accepted the position because I viewed it as an investment that would yield dividends in both the short and long term.  Among other things, I viewed this potential experience as an opportunity to diversify my professional experience, widen my network and enable me to obtain additional audit-related work experience prior to starting my full time career.

    Among my objectives prior to starting at the FDIC were autonomy and opportunity.  I wanted to earn my manager’s confidence that I was capable of exercising the necessary discretion to decide the proper follow up procedures for audit/review findings.  I was able to do this and so much more.

    Perhaps the most unanticipated benefit I came across by interning at the FDIC was the insight I gained.  I learned a great deal about both the FDIC and the auditing practice in general.  For instance, I learned the FDIC does not actually use federal government accounting standards (FASAB).  Rather they use the same accounting rules that govern private industry (US GAAP).  Additionally, although the FDIC has a $4 Billion budget it could never be accused of squandering taxpayer dollars as it is funded through insurance premiums levied on banks, not appropriations granted from Congress.  Further, I also gained insight into what the origination looked like during the height of the financial crisis.  One word, hectic.  Additionally, I learned about conducting compliance audits.  I experienced and practiced how to interact with a less than pleasant client.  Further, I learned how to gauge what a client’s tolerance for auditor may be.  It does not matter how nice a person may be, everyone has a tolerance for dealing with auditors.

    Overall this experience has been far more rewarding than I could have ever imagined.  I have had the opportunity to diversify my professional experience by incorporating internal controls and compliance auditing into my skill set.  I have refined my perspective and outlook on the possibility of working for the Federal Government.  I have broadened my network with more working professionals whose experience I can leverage to aid my professional endeavors and I gained wonderful insight into the intricacies of interacting with clients.  Even though I did not need this experience, I’m glad that I pursued it and I know it will be a great asset as I start my full time position with Ernst & Young in several weeks.

     
  • Charles 4:47 am on August 5, 2010 Permalink | Reply  

    Playing Nice 

    There are many aspects of auditing that are absolutely amazing.  Among them include gaining exposure and providing enlightenment. The exposure occurs by way of the various companies, industries, accounting practices and people you have the opportunity work with or around.  Contrary to exclusively working in accounts payable, audit allows you to see more aspects of the accounting cycle.  The enlightenment aspect, which is perhaps most important value added function auditors provide come about by way of a well run audit yielding recommendations for the client to improve their operations.  However, this last quality has a double edge.  In order to tell the client how they can become more efficient and effective in achieving their strategic goals, you inevitably have to tell them where their lacking.  From a top level management standpoint there is no problem.  If you tell the CEO of General Electric how to improve their receivables collection so they can lower their allowance for doubtful accounts they’re thrilled.  However, when you tell the person responsible for that function how to do their job better, well, it’s a little less than humbling experience.  Especially, as I learned, if you’re an intern telling a much older person where they’re deficient.

    Beyond being dismissive and fairly sarcastic, they never fail to give you the impression you’re wasting their time. Unfortunately this is an experience that transcends the style of audit.  It occurs in internal and external audit.  Although from my vantage point the internal auditors have the disadvantage of having to preserve some semblance of a personal or working relationship with the employee they see daily rather being viewed as an annoying contractor that comes in once a year as many of my external auditor brethren have experienced.

    Perhaps the most difficult aspect of the entire experience is remaining calm. While it may be a natural reaction to respond to a hostile client in a comparable fashion, it equates to a mutual failure.  The client or fellow employee in this case fails because and not accepting or at least considering the advice to improve their operations going forward, they view it through the lenses of someone being critical of them.  The auditor (me) would fail in this instance by reacting negatively because they allow minor personal disagreements to get in the way of the delivering the value they were brought there to add.  Further, it would also look very bad on my intern evaluation.

    For all you aspiring auditors, or actually any aspiring consultant, always remember what you were brought there to carry out. Further, no matter how much the client’s personnel may upset you just remember that from your vantage point it always business, never personal.

     
  • Charles 1:06 am on August 4, 2010 Permalink | Reply  

    To be, or not to be…Personable 

    Over the past several weeks it’s become apparent that my desire to pursue a career in internal audit may be a little more of a difficult career path than initially anticipated.  The primary reason has to do with interpersonal relationships.  Specifically the relationship between the internal auditor and their organization compared to that of an external auditor and their client has inherent differences in expectations relating to personal relationships between fellow employees and contractors.  While both parties (internal auditors and external auditors) are independent per the requirements of the AICPA Professional Standards, there appears to be a natural desire as an internal auditor to preserve personal relationships established with the staff under review.  This is not a terrible desire by any means.  Maintaining a personal relationship with the people you would typically see each day in the office is an obvious goal to aim for.  It does not matter what your profession may be.  Simply put, it’s nice to be able to have an exchange with a colleague that goes deeper than “Hi, good morning.”  As an internal auditor you’ll find that it is difficult to maintain a personal relationship when you are responsible for, in effect, critiquing other employees ability to comply the regulations internal audit is responsible for reviewing.

    This is particularly difficult for me because, for one thing I started my as an external auditor and consequently have been fine tuned to the idea that so long as the work product stands on its own merits and I conduct myself in a professional way than preserving personal relationship with the client is irrelevant.  Think about the last time your company has been audited.  Did your external auditors/consultants really care about anything unrelated to the job they were hired to completed.   This mentality has been reflected in my work over the summer because I’m quite conservative in my analysis thereby being more critical in my audit findings.  For example, earlier in the summer I came across series of circumstances which, having conservative judgment, I assessed as an Operational Control DeficiencyHowever, a different auditor presented with the same circumstances could view the issue as immaterial.  Truth be told, the latter approach was probably closer to reality.

    During this internship perhaps my biggest takeaway will be if I do decide to go into internal audit as a long-term career move then I’ll have to find the middle ground between being professionally skeptical and being personable.

     
  • Charles 1:03 pm on July 26, 2010 Permalink | Reply  

    Hanging Out with Excel 

    As an Accountant, you generally use Microsoft Excel for, well almost everything (i.e. amortization/depreciation schedules, control matrix, etc.).  An ongoing task I’ve been privileged with spearheading is the Internal Controls Audit Recommendation Follow up System (I’m still thinking of a more creative title).  The general idea is to create a system that will document, track and alert the internal controls section/division (ICS) of updates, changes and action needed based on our recommendations we have made to FDIC personnel through our reviews/audits.  Several issues I ran into while developing the system include my lack of familiarity, making it user friendly, incorporating an alert system and linking documents.

    Lacking experience in creating this type of database proved to be an unexpected problem because envisioning how a process should be streamlined and how it can actually become operational are two very different ideas.  For instance, one idea I had was to create a way for the system to automatically alert ICS about the status of a particular recommendation.  Simple enough idea.  Unfortunately, Microsoft Excel does not have a single formula to make such alerts.  It does, however, provide several alternatives.  In essence, I would create a formula that stated whatever the Current Date (September 25th for example) happened to be.  I also stated the final due date a certain recommendation should have been completed (lets say September 20th is the Due Date).  Next I would enter in a formula that compared the dates.  If the Current Date was greater than the Due Date then Excel would automatically flash a “Past Due” note.  If not, then it would display a “Current” note.  For those of you wondering, the formula is

    =IF($D$65<F12,”Current”,”Past Due”)

    D65 would hold the cell that has today’s date [use the formula is =Today()]

    F12 would be the designated due date

    An additional problem I unexpectedly ran into is user-friendliness.  As a consequence of me being the designer of the database, I could readily locate where within about a dozen tabs of the workbook key information would be.  Basically, it similar to attempting to give someone unfamiliar with your neighborhood directions to your house.  While you may have completed the task so many times that its second nature to you, attempting to convey this to a person unfamiliar with the area makes it a bit of a struggle to verbalize.  In my case, I could easily find what recommendation and personnel follow ups were made for an audit performed 2 years ago within seconds.  Therefore, a secondary task I will be completing once the system is completed is drafting an instruction manual.

    Overall the project is going well & I’m expecting to have it completed by the end of the month.

     
  • Charles 5:16 pm on July 14, 2010 Permalink | Reply  

    The Art of the Sample 

    Ok, maybe not the most creative title, but it does explain the premise of this story.  My internal audit group is in the process of beginning our review of FDIC Cash Disbursements operations.  As you may imagine, attempting to review each transaction would require a level of time and patience no reasonable person would commit to.  Hence comes sampling.  As you may recall from your Statistics class the idea is a randomly selected sample can serve as a representation of the entire population.  Or in this case transaction batch.  It will cover the scope of our audit thereby enabling us to draw inferences about the population.   There is an “Art” to sampling because of the need to determine the size of a sample.

    Additionally, as the case with typical audits, we will test the internal controls (IC) in place.  Comparable to Sarbanes Oxley Section 404, but not nearly as extensive, the objective would be to determine if FDIC personnel has designed and operated within their control environment.  This is done to (1) ensure management is in compliance with protocols governing IC and (2) to enable us to have greater confidence in using sampling.  A general rule of thumb for those of you aspiring accountants/auditors who have yet to be graced by the lectures of Professor Jacoby & Silva (that’s not sarcasm, they’re wonderful professors), the better the client’s internal controls, the lower the audit risk and the lower amount of substantive testing (i.e. sampling) needed.  Conversely, if the client has below average internal controls then there is a greater audit risk and a greater need for additional substantive testing (i.e. sampling).  The Review should be active for the duration of my internship.

    The experience is particularly exciting because, it perfectly compliments my internship experience during my time at Ernst & Young last summer.  During that time I was only able to calculate the sample size which, FYI is based on associated risk (i.e. the risk associated with auditing cash are different than that of property, plant & equipment (PP&E), size of the population, etc.  This time around, I not only had the opportunity to participate in the sample size process, but I’m also aiding in selection and testing process.

    Overall, the experience has been all that I’ve expected and more.

     
  • Charles 6:14 pm on June 25, 2010 Permalink | Reply  

    Staying Busy 

    Staying Busy

    A summer internship is the quintessential Catch 22.  As a byproduct of the season, many people in the office are on vacation and it’s, for all intents and purposes, slower than during the rest of the year.  This can be wonderful initially during the internship because you’re afforded the opportunity to adjust to the office, its people, culture and your work load.  However, as time progresses and you’re fully adjusted to the environment, the slower work load you enjoyed during week one, is not as appealing during week 3. 

    At this point, many people in the office are taking vacations…even personnel involved in our compliance audit has left for several days.  As a result, you have to find more creative ways to keep yourself busy with the work you’ve already been assigned.  My strategy was to get more familiar with the guidelines at the center of the current compliance audit and its corresponding directives (the Federal Government has a directive for almost everything).  While not the most exciting, it is proving its value.  Upon the return of several key figures in our current audit, I’ll have even more follow ups.

    Additionally, we are also getting ready to kickoff another audit which involves both the internal controls division and external auditors Pricewaterhouse Coopers (PWC).  Earlier this week we held the “Kickoff” meeting with group.  It was especially rewarding because it enabled me to watch, from a client’s perspective” how high-end contactor’s (PWC earned the highest gross revenue, $26 Billion, of any accounting firm globally in 2009) conduct themselves at the client’s HQ.  In the time I interned at Ernst & Young, I didn’t have many client interactions.

    Whatever the case may be, although things in the office are slow, there are always creative ways to keep yourself productive.

     
  • Charles 11:26 am on June 23, 2010 Permalink | Reply  

    Team Building 

    Team building…now I’ll admit, whenever I hear of this concept I immediately think of a generic phrase devised by Corporate America. And although this may very well be the case, at least this prior week the FDIC was able to show me its value. This came about by way of Division of Finance’s Field Day. Yes, I know the idea of envisioning a group of accountants in activities unrelated to our excel spreadsheets may seem unfathomable. But alas, it happened…and there may be photos of our unathleticism floating somewhere on the net. Allow me to set the stage…one a hot Tuesday afternoon in a park far far away, the “Infamous Interns” faced off against the “Budget Bullies” (really, that was their actual team name…its an accounting thing). And although the game itself was wonderful, the fact that it served as an informal means for me, and the other interns for that matter, to get to know these seasoned professionals was even better.
    `
    Suddenly after an exciting game of kickball and getting to know the individuals who fill the offices around me, running into people around the office is more than generic greetings. Rather I found myself enjoying conversations with them about topics as serious as their experience here at the FDIC during the 2008 financial crisis when bank failures threatened sanity of the general public to inconsequential topics such as why American Idol will not last another season.
    `
    Further, the kickball game also led to more conversations with several individuals about their career path and how they obtained their CPA license. Needless to say, studying like your life is at stake seems to be the one commonality in all their stories.
    `
    Maybe it is possible team building is more than a term devised by Corporate America…I doubt it…but it least for this one instance it fostered a greater sense of community in the office.
     
  • Charles 1:05 am on June 16, 2010 Permalink | Reply  

    Getting Down to Business 

    This prior week has been interesting to say the least.  Between the great insight I am gaining, the wonderful people I met and the opportunities for professional development, I am having a fantastic time at the FDIC
    ~
    From an insight perspective, I found out something rather interesting about the accounting policy of the organization.  The FDIC does not actually use federal government accounting standards (FASAB).  Rather they use the same accounting rules that govern private industry (US GAAP).  The difference is quite remarkable given that government accounting leans towards a more cash basis approach as opposed to an accrual basis approach.  Additionally, given my strong dislike for governmental accounting rules, this is extraordinary news for me.
    ~
    One aspect that I have really come to enjoy about this internship is the type of tasks I am being assigned.  Upon coming to the FDIC, I expressed to my manager that my primary goal for the summer would be to work on assignments that will prepare me for when I start at Ernst & Young later this year.  Between this request and my evaluations thus far, my managers have entrusted me with assignments that have a greater degree of difficulty and require the leverage of my academic background (specifically my advanced auditing course, thanks Professor Silva).  For example, over the past week I’ve been completing a segment of a compliance audit.  Between the analysis and exhibits section the report has already eclipsed 30 pages (most of which I’m hopeful will go directly into the final audit report issued later this summer).
    ~
    Perhaps one of the unexpected aspects of the job thus far is my direct interaction with “the client” (in internal auditing, the company itself (FDIC) is considered to be the client).  Interestingly enough, I was expecting to meet with the client several days upon sending my initial follow up questions.  As such, I was planning on preparing for the meeting so that it could present my, let’s say differences of opinion with the client in a clear and concise format.  Unexpectedly though, I ran into the person in question on the elevator later that day and, let’s just say my line of questioning wasn’t as clear and concise as I would have liked it to be…but I was able to get the follow up responses.
    ~
    One aspect of the job that I have really come to enjoy is the room for professional development through the internship program which has several development workshops built in to the summer.  Among these include Lunch & Learn sessions where a topic or event unfolds.  The most recent Lunch & Learn featured public speaking.  Although the coordinators were well-intentioned, I did not take a great deal away from this experience other than the learning the engineering student from the University of Virginia has excellent presentation skills.  Also, apparently UVA and Volkswagen have a partnership.
    ~
    All and all, pretty good first couple of weeks
     
  • Charles 2:37 am on June 4, 2010 Permalink | Reply  

    First Week on the Job…internship My firs… 

    First Week on the Job…internship

    My first week at the FDIC has been absolutely fantastic to say the least.  In addition to having the opportunity to meet my fellow interns and new colleagues, I also learned a little more about an organization that I’ve had general knowledge about for years.  For future reference, I will be breaking down my blog into sections based upon the relevant events from the prior week.  For this entry, the relevant events include my impression of the other interns, IT at FDIC, my actual work assignments and the culture and atmosphere of the company.

    The Interns

    Perhaps the most surpassing episode I came across this past week was the profile of the interns.  There were interns ranging from college freshmen to 2nd year MBAs & law students (3 from AU!!!).  The former surprised me because I was under the impression that employers generally have a preference for interns further in their academic careers.

    Technology

    I did have a few technological blunders during the first week.  Among other things, I was locked out of my account several times for failing to correctly enter my password.  Moreover, since the FDIC is all about transparency, my supervisor received an email stating that I unsuccessfully attempted to access my account 16 times (not the best first impression).

    Perhaps the chilling aspect of my IT difficulties was during orientation when I was informed that that everything (WebPages & email both company issued and your personal account) is the property of the FDIC if you access it on their server.  Moreover, phone calls elapsing an hour are recorded.

    Atmosphere & Culture

    Although I will reserve judgment for after the internship concludes, my initial impression in juxtaposing the FDIC with E&Y is that there is a more relaxed atmosphere. While EY is not an uptight organization, there appears to be a greater sense of urgency there relative to the FDIC.  This may be a premature assessment, but I’ll keep a watchful eye to see if this theory can be confirmed.

    The Work

    I was initially concerned about the workload that would be entrusted in me.  I formed the impression during orientation that most managers typically do not delegate certain task until after a certain period of time when a level of trust has been established.  However, for a 9 week internship, time was not on my side.  Nonetheless, my managers have, and still are building these higher levels of trust with each passing day.

    I’ve very appreciative of my supervisor’s efforts to get me as much exposure to the intricacies of internal auditing as possible.  Within the first week this has entailed attending an audit planning meeting, meeting with the client (Division of Finance) and a general observation of safeguarded assets.

     
  • Charles 2:55 pm on May 18, 2010 Permalink | Reply  

    New Blogger on the Block 

    Greetings!

    My name is Charles Thompson, Jr. and I am currently a graduate student at American University pursuing a MS in Accounting.  In the coming weeks, I will be interning at the Federal Deposit Insurance Corporation (FDIC) in Arlington, VA as an internal audit intern.  It is my expectation that by the conclusion of this internship, I will have both greater insight and appreciation for the internal controls process (specifically Sarbanes Oxley 404 compliance).

    A little background about myself.  I completed my BS in Accounting at American U in 2009.  During my time at AU, I was able to intern at RedPeg Marketing, Ernst & Young, Denburg & Low, PA & the Center for Voting and Democracy.  I was also able to get involved with several co-curricular activities.  Among these included serving as a volunteer tax preparer for Community Tax Aid; joining Alpha Kappa Psi, serving as President of the University’s Accounting Club and competing in the annual Kogod Financial Case Competition several times.

    As you may have gauged by now, I have a passion for financial reporting and auditing.  Following my summer internship, I will begin my professional career with Ernst & Young as an auditor.

    I’m looking forward to communicating with the AU world in the coming weeks.

     
    • EhYouAdvisor 3:13 am on May 19, 2010 Permalink | Reply

      Charles-

      Congratulations on E&Y! That is a very impressive list of internships, leadership, and community service!

      Can you give recommendations to other students with regard to finding and securing internship opportunities in DC?

      What is the secret to balancing a challenging accounting major, internships, social life, leadership positions, etc.?

      How were you able to convert an internship at Ernst & Young into a full time job offer?

      Thanks for taking the time to respond,

      David Fletcher

    • Jessica Beasley 1:25 pm on May 19, 2010 Permalink | Reply

      WOW – what great experience! I look forward to hearing more about your internship!!

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