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As a financial auditor, if a client uses SAP or some other standard ERP we can just ask for a general ledger report and get to work. If they are using something

As a financial auditor, if a client uses SAP or some other standard ERP we can just ask for a general ledger report and get to work. If they are using something bespoke I would probably put my head in my hands and send an urgent email to our dreaded IT systems audit team, at major expense to the client.

deleted 7y ago
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qubex 7y ago
Yeah... when my family business installed SAP the auditors were delighted. But... here’s the thing: standardised ledgers that make a company easy to audit have no positive correlation with corporate effectiveness and competitive advantage. It’s great that your work is simplified, but frankly, it’s totally irrelevant. I’d rather my auditors had to hail their dreaded IT departments than having the whole firm rendered essentially paralysed by Satan’s Accounting Package.
- tomnipotent 7y ago
  > It’s great that your work is simplified, but frankly, it’s totally irrelevant It's the other way around. It's totally irrelevant to re-invent the wheel and do something in a non-standard way. > I’d rather my auditors had to hail their dreaded IT departments That's not how auditing works. The point of GAAP is that things are done a certain way, and if you do things differently you need to provide that it isn't bullshit. Otherwise Enron & WorldCom all over again.
  - qubex 7y ago
    > That’s not how auditing works. The point of GAAP... Hate to break it to you, but there’s other countries and other regimens out there.
    - deleted 7y ago
      [deleted]
    - jsmith99 7y ago
      Of course USGAAP is not the only financial reporting standard (I posted a parent comment and I work in the UK on IFRS which is used in almost every other country) but US audit standards are quite close, and converging, to International Standards on Auditing from the IAASB used internationally.
    - tomnipotent 7y ago
      Doesn't take a lot of imagination to replace GAAP with IFRS or your acronym of choice.
    - sobani 7y ago
      > > That’s not how auditing works. The point of GAAP... > Hate to break it to you, but there’s other countries and other regimens out there. Which country are you from that it doesn't have Generally Accepted Accounting Principles? Are you saying that in your country every company can make up what they want and the authorities are OK with that?
      - buonzz 7y ago
        congrats, you just had discovered the dark web, where things are done in non-GAAP way. surprisingly enough, there are lot of "business transactions" going on out there than all these innocent corporations combined.
        tomnipotent 7y ago
        What does the dark web have to do anything? Should we bring up school kids mowing lawns? We're talking about serious companies managing millions in cash flow with investors or loans providing them a swift kick of responsibility.
        tripzilch 7y ago
  - qubex 7y ago
    The problem is that installing SAP into a going concern does force you to reinvent the wheel: as an auditor you might not notice it or might even rejoice, but the truth is that the whole operative side of the business needs to reinvent itself in order to conform to the mould the new ERP software requires. Auditing, accountancy, control... those are offline, non-value-adding activities and services that quite frankly the enterprise-minded couldn’t care less about.
    - tomnipotent 7y ago
      > whole operative side of the business needs to reinvent itself in order to conform to the mould the new ERP software requires This is exactly expected and a desired outcome in a vast majority of scenarios. These jobs/roles are not snowflakes.
      - tripzilch 7y ago
        I've been dependent on businesses that just went through such a transition and it's terrible. It's not a desired outcome at all. The "not snowflakes" good people leave, and the ossified ones who really just keep their head above water and need the job, are what you have to deal with. And they have the exact same attitude to succumb to the system or else you're SOL. I really truly think you do not understand. It's rare but I know from first hand experience that it can be different.
        deleted 7y ago
        [deleted]
        tomnipotent 7y ago
        > I really truly think you do not understand. Totally. My clearly poorly researched comment and seemingly lack of knowledge on the subject clearly reveals me as a fraud. You got me.
        tripzilch 7y ago
        Hey, can you maybe knock it off?! You've been sending replies to my old comments for the past THREE DAYS, and then editing and deleting them. I got "HN Replies" enabled so they do end up in my mailbox even if you edit or delete them shortly after. So I do get to see EVERY TIME you wrote me in the past couple of days that you believe I am "not qualified to have an opinion. full stop". No discussion, no arguments, not even trying to engage what I said, just attacks telling me over and over how much better you understand SAP. Just attacks or stating your credentials. Which is no discussion but I don't care any more, I want you to knock it off, now. At this point I honestly don't care what your opinion is on ERP, that you're the Queen of SAP, or whether you think I get to have an opinion or not. You deleted that remark, but it was the straw. I just want to cease communicating with you, which I did from my end already nearly a week ago. Now I understand when sometimes people post while in a bad mood, causing them to post things they regret. And if you delete those messages, then that is fine with me. But what I'm a little bit worried about, is that I got to wake up to a new reply from you, telling me how stupid I am and that I don't deserve to have an opinion, for the past THREE DAYS. That's not a bad mood. And I don't care what it is. Just let it go, alright? Please don't reply to this comment with anything less than an apology.
antaviana 7y ago
This reminds me an interview to Eric Schmidt [1]. Here is the interesting excerpt on Google decision to buy Oracle instead of building their own ERP. "__ How did you convince them that you needed to do this? __ Well, it was actually very interesting. Larry and Sergey suggested that we should build our own, because most of the existing accounting systems weren't any good. And I said, "I'm sure that's true, but you'll never get it audited," And I thought that was a pretty clever argument. The auditors would never pass financials (generated out of software) that we built ourselves. And Larry and Sergey today will complain about the Oracle system, but they'll also say "We had to get one that was auditable."" [1] https://www.wired.com/2007/04/my-other-interv/ https://www.wired.com/2007/04/my-other-interv/
- VladimirIvanov 7y ago
  That's just a lie though. Custom software can be audited. I have first hand experience with this

deleted 7y ago

[deleted]

qubex 7y ago

Yeah... when my family business installed SAP the auditors were delighted. But... here’s the thing: standardised ledgers that make a company easy to audit have no positive correlation with corporate effectiveness and competitive advantage. It’s great that your work is simplified, but frankly, it’s totally irrelevant. I’d rather my auditors had to hail their dreaded IT departments than having the whole firm rendered essentially paralysed by Satan’s Accounting Package.

tomnipotent 7y ago
> It’s great that your work is simplified, but frankly, it’s totally irrelevant It's the other way around. It's totally irrelevant to re-invent the wheel and do something in a non-standard way. > I’d rather my auditors had to hail their dreaded IT departments That's not how auditing works. The point of GAAP is that things are done a certain way, and if you do things differently you need to provide that it isn't bullshit. Otherwise Enron & WorldCom all over again.
- qubex 7y ago
  > That’s not how auditing works. The point of GAAP... Hate to break it to you, but there’s other countries and other regimens out there.
  - deleted 7y ago
    [deleted]
  - jsmith99 7y ago
    Of course USGAAP is not the only financial reporting standard (I posted a parent comment and I work in the UK on IFRS which is used in almost every other country) but US audit standards are quite close, and converging, to International Standards on Auditing from the IAASB used internationally.
  - tomnipotent 7y ago
    Doesn't take a lot of imagination to replace GAAP with IFRS or your acronym of choice.
  - sobani 7y ago
    > > That’s not how auditing works. The point of GAAP... > Hate to break it to you, but there’s other countries and other regimens out there. Which country are you from that it doesn't have Generally Accepted Accounting Principles? Are you saying that in your country every company can make up what they want and the authorities are OK with that?
    - buonzz 7y ago
      congrats, you just had discovered the dark web, where things are done in non-GAAP way. surprisingly enough, there are lot of "business transactions" going on out there than all these innocent corporations combined.
      - tomnipotent 7y ago
        What does the dark web have to do anything? Should we bring up school kids mowing lawns? We're talking about serious companies managing millions in cash flow with investors or loans providing them a swift kick of responsibility.
        tripzilch 7y ago
- qubex 7y ago
  The problem is that installing SAP into a going concern does force you to reinvent the wheel: as an auditor you might not notice it or might even rejoice, but the truth is that the whole operative side of the business needs to reinvent itself in order to conform to the mould the new ERP software requires. Auditing, accountancy, control... those are offline, non-value-adding activities and services that quite frankly the enterprise-minded couldn’t care less about.
  - tomnipotent 7y ago
    > whole operative side of the business needs to reinvent itself in order to conform to the mould the new ERP software requires This is exactly expected and a desired outcome in a vast majority of scenarios. These jobs/roles are not snowflakes.
    - tripzilch 7y ago
      I've been dependent on businesses that just went through such a transition and it's terrible. It's not a desired outcome at all. The "not snowflakes" good people leave, and the ossified ones who really just keep their head above water and need the job, are what you have to deal with. And they have the exact same attitude to succumb to the system or else you're SOL. I really truly think you do not understand. It's rare but I know from first hand experience that it can be different.
      - deleted 7y ago
        [deleted]
      - tomnipotent 7y ago
        > I really truly think you do not understand. Totally. My clearly poorly researched comment and seemingly lack of knowledge on the subject clearly reveals me as a fraud. You got me.
        tripzilch 7y ago
        Hey, can you maybe knock it off?! You've been sending replies to my old comments for the past THREE DAYS, and then editing and deleting them. I got "HN Replies" enabled so they do end up in my mailbox even if you edit or delete them shortly after. So I do get to see EVERY TIME you wrote me in the past couple of days that you believe I am "not qualified to have an opinion. full stop". No discussion, no arguments, not even trying to engage what I said, just attacks telling me over and over how much better you understand SAP. Just attacks or stating your credentials. Which is no discussion but I don't care any more, I want you to knock it off, now. At this point I honestly don't care what your opinion is on ERP, that you're the Queen of SAP, or whether you think I get to have an opinion or not. You deleted that remark, but it was the straw. I just want to cease communicating with you, which I did from my end already nearly a week ago. Now I understand when sometimes people post while in a bad mood, causing them to post things they regret. And if you delete those messages, then that is fine with me. But what I'm a little bit worried about, is that I got to wake up to a new reply from you, telling me how stupid I am and that I don't deserve to have an opinion, for the past THREE DAYS. That's not a bad mood. And I don't care what it is. Just let it go, alright? Please don't reply to this comment with anything less than an apology.

antaviana 7y ago

This reminds me an interview to Eric Schmidt [1]. Here is the interesting excerpt on Google decision to buy Oracle instead of building their own ERP. "__ How did you convince them that you needed to do this? __ Well, it was actually very interesting. Larry and Sergey suggested that we should build our own, because most of the existing accounting systems weren't any good. And I said, "I'm sure that's true, but you'll never get it audited," And I thought that was a pretty clever argument. The auditors would never pass financials (generated out of software) that we built ourselves. And Larry and Sergey today will complain about the Oracle system, but they'll also say "We had to get one that was auditable."" [1] https://www.wired.com/2007/04/my-other-interv/ https://www.wired.com/2007/04/my-other-interv/

VladimirIvanov 7y ago
That's just a lie though. Custom software can be audited. I have first hand experience with this