Everything you need to know to avoid requesting something unworkable without practical results.

The standard lame excuses

Recently, a Brazilian club president (amateur management) claimed that he would need to get his documents tidied up to be audited by a Big4. This phrase made me very surprised. It is similar to other statements made by different club managements for several and several years of demand for Big4 audits. “I need to clean up the house first and then be audited” is often something you hear.

As we saw in the previous post, at no time does the auditor have access to internal documents, much less imagine whether they are organized or not. The auditor also does not even imagine the actual quality of the controls.

Quite frankly, no one assumes that documents from a club that is regularly audited may be disorganized. Suppose a club is audited, not by choice, but in the Brazilian case, compulsory since the late 2000s, and those who perform these audits are usually smaller firms. In that case, the documents cannot be disorganized, as the auditors did not indicate problems of this nature in their opinions.

If any club needs to arrange its documents, then all of its opinions up to this “arrangement” would have to present limitations of scope or negative opinions, which rarely happens.

It turns out that the manager himself creates a dilemma and a shadow of doubt about the quality of the annual audits.

There is no way to say that smaller firms’ choice is based on the principle that they are more tolerant of organization and control problems. It would be a frivolous generalization on my part. There is a substantial cost component in choosing the audit, credit risk, and reputational risk. This mix makes the smaller company more attractive to Brazilian football, as you may have noticed previously.

But the management and associates themselves belittle this choice in their narratives. There are always promises to hire a Big4 to audit clubs. By the end of this thread, I hope you will have elements to discern who seeks improvements and wants to have a seal of Big4 in their statements and internal controls and who only has an empty speech.