What is SALY in Public Accounting?
In public accounting firms, there is no doubt that you'll come across the acronym SALY, which stands for "Same As Last Year." Sadly, SALY has sustained a sullied reputation over the years, despite being a very useful tool when implemented properly. Because SALY is such a hot topic in public accounting, I thought it would be useful to outline what SALY is, how it can be useful, and why it has such a bad reputation.
What is SALY?
As the name implies, doing something the same as last year involves looking at the prior year work paper and completing the current year workpaper in a similar fashion. In many cases, this strategy is used by less experienced staff to turn out work relatively quickly. However, it's important to note that the effectiveness of SALY is predicated on two things:
Having a prior year work paper with similar information available.
Having the same requirements and objectives as the prior year with respect to that information.
If either of these conditions are not met, telling the first year associate to “do it SALY” will not end well.
How Can SALY Be Useful?
SALY is one of the most common and effective learning tools in a public accountant environment, even if the partners don't want to admit it. Being able to pull up the prior year work paper and see what it should look like after manager and partner review is incredibly helpful for new associates. If the work paper is particularly clean, the new associate can also know what the end product looks like but also the process to complete it. But remember, it can only be a useful tool for learning if the circumstances are right. If something has changed from the prior year, the associate will learn a different lesson from their manager if they SALY the work paper.
Why Does SALY Get a Bad Reputation?
Despite being such a useful tool when used properly, SALY has a bad reputation among many public accountants. This is because when used ineffectively, SALY can be a big time waster for engagement budgets. Here's some examples of the ineffective use of SALY:
Performing procedures not necessary in the current year - just because something was done last year, doesn't mean it needs to be done this year. While there are many basic procedures that will carry over from year to year that can be SALY'd effectively, there may be extended procedures that are only necessary in certain circumstances. It's critical that the prepare of the workpaper knows the difference between what was done last year and what needs to be done this year.
Associates not understanding what they're doing - blindly following the prior year workpaper without thinking about the work is a great way to make careless mistakes and not learn anything in the process. These careless mistakes range from not changing the dates at the top of the page to copying the analytic explanation from the prior year, despite the relative account balances shifting in the opposite direction (saying something increased when it really decreased).
Rolling forward errors - just because something was done last year, doesn't necessarily mean it's correct. This is especially true when it comes to assurance work where materiality will change every single year. I’ve seen plenty of workpapers where someone hard coded something at the last minute or plugged some random small number to make a workpaper passable, and then have that workpaper and those effects rolled forward by an associate the following year, even if they didn’t make sense anymore.
Should I SALY?
If you aren’t sure what you should be doing, you should SALY with caution and take the time to learn what should be done in the current year. If you are sure about what you are doing, you should use SALY to frame and template your workpapers to help things go faster for the current year. In any circumstance, it's critically important to learn how things should be done before blindly following any other workpaper and looking at the prior year is a great place to start!