As the holiday season provides a brief respite for accountants, the looming specter of the "busy season" in January brings with it the challenges of late nights and weekends dedicated to finalizing clients' annual financial statements. However, KPMG, one of the Big Four firms in the United States, is pioneering a strategy to alleviate the notorious stress associated with this period, with early success and positive outcomes for both staff and audit quality.
In an industry where the busy season is often considered a rite of passage, KPMG is breaking the mold by pulling more audit work forward to before year-end. The firm reported a notable reduction in the number of staff working over 50 hours across the eight weekends of the busy season, dropping from almost one-third three years ago to less than one-fifth last year. The firm is on track to further decrease this figure in 2024.
A significant driver of this change has been the implementation of targets set two years ago, aiming to complete specific percentages of audit work for large public company clients by deadlines in October and December. Senior executives face potential pay cuts if these targets are not met, providing a tangible incentive for meeting deadlines and fostering a more balanced work environment.
Scott Flynn, Vice-Chair for Audit at KPMG US, highlighted the shift in perspective, acknowledging the evolving priorities of younger professionals who prioritize work-life balance. The firm aims to meet its professionals where they need to be met, acknowledging that late-night work during the traditional busy season may not yield the best results.
Flynn emphasized the urgency of the matter, attributing it to the increasing prevalence of remote audit work, which lacks the natural breaks and social interactions present in on-site engagements. Recognizing the importance of mental health, KPMG has embraced new technology to monitor audit progress, allowing for a revamp of work practices that goes beyond simply meeting deadlines.
Initially introduced for audit work on large US clients, this innovative approach has now been extended to all KPMG's public company clients and most private company audits. The firm reported a significant success in pulling more work forward to before year-end, with a 10% increase in 2022 compared to 2020 and an expected 20% increase in 2023.
Executives at KPMG anticipate that this proactive strategy will not only boost staff morale but also benefit audit quality. By engaging in year-round interaction with clients, the firm believes it can enhance the identification process of potential issues and improve its capacity to handle the unexpected during the critical months of January and February. KPMG's initiative stands as a noteworthy step towards reshaping industry norms and promoting a healthier work-life balance for accounting professionals.