On August 3, 2017
The CFE is a complicated beast. In the heat of battle, you need a way to tame it. That’s why we recommend the use of simple performance cues that focus on the positive actions that you need to take with your analysis and response.
Performance cues might sound like things that a pool shark would take to the nearest billiard room on a Saturday night. However, the underlying concept should be familiar to you as you’ve probably used mnemonic-based memory tricks at various points during your education. I like to think of these performance cues as inspirational thought processes and not fixed templates.
Let me give you a few examples of the performance cues that I use:
B-W-B stands for “build with balance.” It’s a simple reminder to help me achieve balance between areas of an analysis when I’m under time constraints. For example, let’s say that I have to analyze control weaknesses and I identify ten potential problems among three systems (e.g., inventory, payables and payroll). If I only have time to address six weaknesses, I’ll balance my analysis, covering two weaknesses in inventory, two in payables and two in payroll. This strategy should optimize my scoring potential.
When choosing between two alternatives, I always think of B2C for “building to a conclusion.” It’s an efficient way to organize my response that identifies the advantages and disadvantages of both alternatives without the inefficient duplication of concepts inherent in a traditional pros and cons matrix. I order my analysis so I address the factors that don’t support my conclusion first. Then I transition to the factors that support my conclusion, which then flows logically from the analysis without having to repeat the supporting factors.
I-D-C stands for “identify-discuss-conclude” and reminds me to not simply jump to a conclusion. It works great for financial reporting and tax-related issues.
Q-Q-C stands for “quant-qual-conclude” and reminds me to balance my analysis of finance and management accounting issues between the quantitative and qualitative components, and to make a supported conclusion at the end.
A-C-R-R helps me identify the root cause of problems relating to a lack of segregation of duties and to develop an effective recommendation. It’s a simple reminder that the authorization of a transaction should be segregated from the custody of the related assets and the recordkeeping and reconciliation processes.
The performance cues should live in your head and must be filtered through a required before you use them in your response. Let me explain with a couple of examples of the most common performance cues and how they have been applied inappropriately in some circumstances.
Every candidate is familiar with W-I-R, which stands for “weakness-implication-recommendation.” Unfortunately, this familiarity has bred contempt. In several cases, candidates were asked for an analysis of both strong controls and weak ones. When they slammed the W-I-R templates into their responses, they filtered out half of the required analysis. W-I-R worked perfectly for the weaknesses, but a different three-part approach was needed for the strong controls.
In another instance, the weaknesses were listed and candidates were asked for the root causes of the weaknesses and to make recommendations. W-I-R had to be filtered through this unique required and had to become W-Cause-I-R in order to develop an appropriate analysis.
Another common term is R-A-M-P, which stands for “risk-approach-materiality-procedures.” It works well if the required demands a full audit plan, but quickly falls apart in other situations. We’ve seen candidates go off on a 20-minute RAMP tangent that was worthless because the audit was complete and the required was to deal with the post-audit reporting implications.
The bottom line is simple: performance cues will help you react quickly and organize your thoughts. However, they are not one-size-fits-all templates. They should live in your head and always be filtered through the required before they reach your response.
(Paul Morris – August 3, 2017)