<p>I wanted to know more about question #3 and found this while searching…</p>
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<p>There is a high degree of politics that reside within the Big4Firms. While there are politics in all organizations, the politics that reside within the Big4Firms take a unique characteristic provided the nature of the business.</p>
<p>Favoritism & Diversity</p>
<p>Employees of Big 4 Firms do not have one “boss” and work for different partners on varying accounts. This is different from private industry whereby people typically have one or two bosses whom they consistently report to. This increases the level and amount of favoritism that comes into play when selecting and supporting staff and management to serve the firm’s clients. </p>
<p>As part of human nature, it is normal that people will identify with and support people who think, act, and look like them. Supporting such homogeneity within a business like public accounting, which thrives on differing perspectives and ideas to serve clients as their trusted business advisor, leads to a decline in the quality of professional service that is rendered to clients. For example, employees of the Big 4 Firms are given opportunities to serve on certain clients that will ultimately play a key factor in determining their career progression and success with the firm. </p>
<p>Many staffing decisions in the Big4Firms are based on favoritism and perceptions of certain employees. There are situations whereby the more talented employees of the Big4Firms are not given the proper opportunities and support based on the favoritism and perceptions (not reality) that are cast upon them. While it is human nature to gravitate towards people who exhibit certain characteristics, a key aspect of providing quality professional services is based on the diverse perspectives and talents of the firm’s employees and not based on the homogeneity of the teams that serve the clients.</p>
<p>Catch 22’s</p>
<p>As part of the politics within the Big 4 Firms, there are many Catch 22 situations, or situations whereby the direction, guidance, and requests are contradictory. Especially with the economic downturn in 2008, there has been immense pressure on audit engagement team to find efficiencies in the audits while requiring an increase in minimal chargeable hours. These two pressures are contradictory in nature.</p>
<p>This is coupled with the increasingly complex and additional audit requirements that audit teams must utilize in order to properly conduct an audit. Increased oversight of the public accounting profession and an increased level of audit requirements make it difficult to attain efficiencies while adhering to the required audit standards and audit documentation requirements. While certain efficiencies can be attained in many audits, there is an inherent limitation in the amount of efficiencies that can be implemented while maintaining high quality client service and performing a quality audit.</p>
<p>Do More with Less</p>
<p>Based on the staffing and leverage models utilized by the Big 4 Firms, there is increasing pressure to “leverage down” the audit work to less experienced (and cheaper) audit staff. While leveraging work down to younger professionals provides a valuable learning experience, there must be proper guidance, on-the-job training, and oversight of the younger professionals.</p>
<p>In addition, many staffing and scheduling situations are resolved by having the staff work a ridiculous number of hours at times to meet tight deadlines with limited resources. After working over 50 or so hours in a week, a human’s productivity and cognitive abilities diminish. Based on the nature of the deadlines and staffing models, many key areas of audits or the riskier audit areas are often handled at a time that is close to the deadline. </p>
<p>While the Big 4 Firms have good quality control measures in place, the volume and nature of the work that is performed under conditions of excessive work hours still remains. The employees of the Big4Firms represent fixed costs to the firm since the employees are paid a set salary regardless of the number of chargeable hours worked in a week.</p>