Audit Assignment Review
Colorado Department of Revenue
ACCT 4540/5540
Table of Contents
Storyboard
Premise
Core Conflict
Tension
Turning Point
Resolution
Project Charter
Roles and Responsibilities
Deliverables
Analysis of the Current Audit Assignment Process.
Analysis of Other States’ and CPA Firms’ Audit Assignment Processes.
Recommendations for a New Audit Assignment Process
Analysis and Recommendations on How to Improve Motivational Techniques and Offer New Incentives.
Milestones
Work Breakdown Structure
Risk Management Plan
Stakeholder Analysis
Cost Benefit Analysis
Status Reports
Risk Management
Quality Assurance
Change Management
Lessons Learned
Appendix
Meeting Minutes
Research
States Responses
Colorado Department of Revenue Survey to Auditors
Research from CPA Firms and Managers
Research from Protiviti Website
Storyboard
Premise
Improve audit efficiency by assigning audits based on each auditors personal skill set and maintain motivation of the agents while increasing audit accuracy and decreasing the time to complete audits.
Core Conflict
The current audit assignment process is inefficient because the best, most suited agents for different types of audits are not always assigned to those audits. However, a change to this process may cause employees to be less motivated and create strong resistance.
Tension
Doing nothing to change the current audit assignment process will continue to make it difficult for the department of revenue to collect the correct amount of money owed to them in a timely and low cost manner. Also, new employees will not be motivated to perform at their highest level because of the seniority based audit assignment system.
Turning Point
Maintain the current audit assignment process or change to a standardized process based on personal skill set while maintaining employee motivation.
Resolution
Standardizing the audit assignment process and providing intrinsic benefits will help the State of Colorado Department of Revenue Field Audit Division collect the correct amount of revenue and keep motivation high for employees.
Project Charter
Format taken from CUAccelerate.com
Project Purpose:The purpose of this project is to increase audit quality and efficiency by creating a more efficient audit assignment process based on performance while raising motivation and creating more incentives for better performance on audits without increasing the current costs of the audits.
Prioritized Measurable Objectives:
- Create a standardized audit assignment process throughout the State of Colorado Department of Revenue.
- Eliminate the current seniority based audit assignment process and replace it with a process based on skill sets.
- Suggest various motivational techniques and intrinsic incentives to help managers keep the agents motivated.
Project Manager Authority:
In order for this project to be successful, the project manager will need the authority to:
- Determine the project approach, including milestones; deliverables; and
- Determine project resource requirements, including funding, people and
- Determine how to allocate/reallocate project resources throughout the project.
- Fire project team members.
- Identify and communicate directly with all project stakeholders as the project manager sees fit.
- Determine which recommendations to implement if the project sponsor/project stakeholders do not provide this feedback within three business days of it being requested.
- Cancel the project.
- Increase project funding beyond what is approved in the project plan.
- Extend the overall project timeframe beyond six months.
Project In-Scope:
- Develop audit assignment process.
- Collect research from other state’s Department of Revenue and CPA firms.
- Increase audit quality and efficiency by assigning each agent an audit that best fits an agent’s skill set or development plan.
- Keep motivation and morale high while implementing the new processes.
- Provide intrinsic benefits to employees.
Project Out-of-Scope:
- Promote the new audit assignment process within the State of Colorado Department of Revenue.
- Create a new training process.
- Improve audit selection process.
- Increase costs of audits.
- Recruit new auditors.
- Provide monetary benefits to employees.
- Improve the performance evaluation process.
Project Assumptions:
- A culture of seniority exists within the department that is kept in place by the agents with seniority whom have no incentive to change assignment process.
- The biggest incentive for the senior agents is their ability to have first choice of audit they work on.
- Managers are unable to base performance on the money an audit brings in to the department.
- Managers prefer to allow agents to create a list of audits they would like to be assigned to because it makes the assignment process easier for them.
- Incentives for new auditors are low compared to working with a non-government accounting firm.
- Expectations of an audit are not clearly defined to an agent.
- Many new agents are not receiving the proper training.
- New agents are having trouble learning from the senior agents.
- Some agents are selecting their audits based on destination rather than skill sets.
- No standardized process for assigning audits currently exists.
Deliverables:
- Analysis of the current audit assignment process.
- Analysis of other states’ and CPA firms’ audit assignment processes.
- Recommendations for a new audit assignment process
- Analysis and recommendations on how to improve motivational techniques and offer new incentives.
Roles and Responsibilities
Each week team members are assigned tasks that they are responsible to complete by the following meeting. Tasks have been assigned on a volunteer basis and are assigned equally throughout the team.
Role:Responsibilities:
Project Sponsor- State of Colorado Department of Revenue and Tammy Sorensen. /- Approve project charter.
- Provide resources necessary to complete project.
- Communicate any department changes that may impact the project.
- Help project team resolve any problems that are encountered during the project.
Project Manager- Bishop Bhandari
Myers Briggs Personality Analysis:
Personality: ENTJ
ENTJs have a natural tendency to marshal and direct. This may be expressed with the charm and finesse of a world leader or with the insensitivity of a cult leader. The ENTJ requires little encouragement to make a plan. ENTJs are decisive. They see what needs to be done, and frequently assign roles to their fellows. When challenged, the ENTJ may by reflex become argumentative. ENTJs are capable of living on a higher plane, if you will, and learning to value individuals even above their principles. The above dynamic suggests less individuation. ENTJs have extraverted sensing but introverted feeling.
Some of the famous ENTJs:
Franklin D. Roosevelt
Steve Jobs
Jim Carrey /
- Develop project plan and get approval from project sponsor.
- Communicate group questions with Jim Marlatt, project sponsor, and project mentors.
- Communicate information received from sponsor, Jim Marlatt, and mentors with the project team in a timely manner.
- Assist team in determining roles and responsibilities.
- Provide research on performance processes.
- Ensure team is on track to meet project deadlines.
- Assist in creating survey to send out to the state of Colorado auditors.
- Assist in creating and sending survey to other states’ Department of Revenue.
Project Manager- Daniel Deshe
Myers Briggs Personality Analysis:
Personality: ESTJ
Supervisors are highly social and community-minded, with many rising to positions of responsibility in their school, church, industry, or civic groups. Supervisors enjoy and are good at making schedules, agendas, inventories, and so on, and they much prefer tried and true ways of doing things over speculation and experimentation. Supervisors keep their feet firmly on the ground and would like those under their supervision to do the same, whether employee, subordinate, spouse, or offspring. Supervisors have no problem evaluating others and tend to judge how a person is doing in terms of his or her compliance with, and respect for, schedules and procedures.
Some Famous ESTJ’s include:
Judge Judy
George Washington
Sandra Day O’ Connor
Vince Lombardi /
- Develop project plan and get approval from project sponsor.
- Assist team in determining roles and responsibilities.
- Take meeting minutes and communicate them with the team in a timely manner.
- Provide research from various state departments of revenue and state auditors.
- Ensure team is on track to meet project deadlines.
- Assist in creating survey to send out to State of Colorado auditors.
- Assist in creating and sending survey to other states’ Department of Revenue.
Team Member- Brandon Dyer
Myers Briggs Personality Analysis:
Personality: ENJF
ENFJs enjoy organizing group activities and tend to take their commitments seriously. In general, they are reliable and do not like to disappoint others. As team players and project leaders, they have a gift for rallying their players, focusing on what is being done right and each member's strengths. They carry conversations well, finding common ground with their speaker. They tend to find the correct and gracious way to respond in any given situation, no matter how tense or uncomfortable it is. /
- Develop project plan.
- Assist team in determining roles and responsibilities.
- Provide web-based research (including Protiviti website) for project.
- Assist in developing new audit assignment process.
- Assist in creating survey to send out to state of Colorado auditors.
- Assist in creating and sending survey to other states’ Department of Revenue.
Team Member- Torrence White
Myers Briggs Personality Analysis:
Personality: ISFJ
ISFJ’s are Protectors whose primary interest is in the safety and security of those they care about. For their part, Protectors value tradition, both in the culture and in their family. Protectors prefer to make do with time-honored and time-tested products and procedures rather than change to the new. They are not as outgoing and talkative as the Provider Guardians [ESFJs], and their shyness is often misjudged as stiffness, even coldness, when in truth Protectors are warm-hearted and sympathetic, giving happily of themselves to those in need. Their reserve ought really to be seen as an expression of their sincerity and seriousness of purpose. The most diligent of all the types, Protectors are willing to work long, hard hours quietly doing all the thankless jobs that others manage to avoid. Protectors are quite happy working alone; in fact, in positions of authority they may try to do everything themselves rather than direct others to get the job done. They also know better than any other type the value of a dollar, and they abhor the squandering or misuse of money.
Some Famous ISFJ’s include:
Mother Teresa
Jimmy Stewart
Tsar Nicholas II /
- Develop project plan
- Provide research from CPA firms about their audit assignment process.
- Assist in developing new audit assignment process.
- Assist in creating survey to send out to state of Colorado auditors.
- Assist in creating and sending survey to other states’ Department of Revenue.
Deliverables
Analysis of the Current Audit Assignment Process.
The current audit assignment process at the State of Colorado Department of Revenue is based on seniority. While no standardized process is currently in place, the most common process allows the auditors to request audits and are assigned them based on the auditors seniority level and if the auditor is suited for the audit.
The problem with the current system is that auditors are selecting their audits based on location first and foremost and then based on type of audit and how qualified they are for it. Of the 11 responses to the surveys sent to the auditors at the Colorado Department of Revenue, 9 auditors have said they choose their audit based on the location. This is causing the most experienced and qualified auditors to get the audits that are in the best location and not the audits they are most qualified for. As a result of this, the lower level auditors are being stuck with audits that they are not qualified for and may not have all of the skills to complete as efficiently as possible.
Based on the responses to the surveys, higher level auditors and thus agents with more seniority like the current process because they get their first choice of audits and get to go the locations of their choice. However, lower level auditors have said that they either do not think it is fair or just go along with it because that is the way it is done.
For in state audits it makes sense to allow the auditor to choose their audits based on location because it reduces the travel time for an auditor and reduces the amount of money spent by the Department of Revenue in travel costs. Also it makes sense for an auditor in Denver to perform and audit in the Denver area and not in places far away such as Telluride or Pitkin County. The problem with the in state assignment process is that auditors are still not being assigned to the audits they are most qualified for which may be in the same city they are performing the audit they have chosen. To solve this problem a new process must be created for in state audits.
For out of state audits the current process of seniority does not work. Because the auditors are choosing based on location, higher-level auditors are potentially getting audits that they are over qualified for and lower level auditors are potentially getting audits they do not have the skills to complete. An example of this is when an auditor with more seniority chooses the audit in Miami, the easier audit that is perfect for a lower level auditor, over Wichita, the more difficult audit that the higher level auditor has the skill set to complete, because he or she wants to get out of the cold and be in warm Miami by the beach. This creates the obvious problem of the lower level auditor getting the more difficult audit that he or she may not be able to complete as efficiently as the higher level auditor would have been able to.
While it would be ideal for the auditors to keep the current process and choose their audits based on their skill sets and the requirements of the audits, it is not possible to ensure this happens without a change in the process. The audit assignment process needs to change in order to enable to Colorado Department of Revenue to perform at top efficiency and generate all of the revenue owed to the state.
Analysis of Other States’ and CPA Firms’ Audit Assignment Processes.
There were eleven departments of revenue that responded to our survey about their audit assignment process and motivational techniques. We also acquired information from industry sources on the same topics.
The majority of the states that responded said that they do not use a seniority-based system for the audit assignment process. These states had either the managers or separate assignment committees decide what audits each agent should go on. The criteria for their decisions are based on the factors of agent skill, experience, and quality of past performance. Industry sources from two auditors confirmed that they followed the same process.
Findings from our research also show that seven of the states and both industry auditors do not give their agents any say at all for which audits they want to go on. However, there are four states that do give their agents a chance to voice their preference. Wisconsin is one example of a state that allows for some input from the agents. Under their system an agent may make a request using any decision factors that they wish. Their request is then sent to their audit assignment unit for discussion. The assignment unit allows the agent their choice only if they feel that the agent has enough experience to perform it. South Dakota is another one of the states that allows their agents some say in the audit assignment process. Their system utilizes a pool of audits that can be chosen from. Some of their auditors are considered experts and can make their choice without review. The other agents can still request a specific audit but a supervisor must authorize it. Washington also stated that they have an assignment process that allows for agent requests. Their process lets agents ask for an audit in a specific industry but not for a specific taxpayer. The final decision is made by a manger that decides based on the agent’s skills to complete the audit. Washington said that this system allowed for their auditors to gradually develop in different areas. All of the departments of revenue responded that their employees were satisfied with their current audit assignment process. The industry auditors echoed this in their responses.