In public accounting, engagement teams procure information from clients and create and complete workpapers based on that information. The team who initially does this gains an inherent understanding of the information because they performed the full procedures and created the workpapers. The
next year and every year after, these workpapers often simply get
rolled forward by updating the dates and names on them.
Over
time, the team who initially completed the workpapers and gained that inherent understanding either goes to different clients or leaves the
firm entirely and the new team members joining the team perform the procedures the same as previous years without actually inherently knowing why they're doing what they're doing. This inherent understanding rotting away over
time due to
rolling things forward year after year is called Rollforward Rot. It typically leads to
long, frustrating engagements,low morale and high turnover.
Associate: Hey, I really have no idea what I'm doing with this workpaper.
Senior: It's
easy, just follow the procedures at top.
Associate: Ok, by why exactly are we doing these procedures, like what exactly is going on here and why?
Senior: I'm not really sure. I asked the managers the same
thing and they weren't sure either, but the last year file was done this way so it should be good.
Associate: *thinking* Damn, the rollforward
rot on this engagement is terrible.
Nobody actually knows why we're doing any of this. I'm doing my 2-3 years and I'm out.
