Black Friday Mayhem Meets Audit Logic: A Survival Guide from an Audit Manager

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If we can survive all our year end audits and interim audits, we can definitely survive 80% off air-fryers.

As we crawl towards year-end functions, finalising our interim audits and the stress of choosing a secret Santa gift that costs less than R200 but still looks thoughtful, black Friday arrives – chaotically.

Every year millions of “normal humans” line up at the malls or stalk Takealot for hours to save R200 on a toaster. Meanwhile auditors (supposed beings of logic, skepticism and spreadsheet-induced trauma) observe Black Friday through a very different lens.

Disclaimer: “Normal human” is NOT an insult unless you’re the Hufflepuffs of the group (JK, sorry Rowling).

So, what makes Black Friday an auditor’s worst nightmare?

Crowd Control = Failed Internal Control

Normal people: “Wow, look how excited everyone is! What a turnout, the queue for the appliance store is snaking around the building”

But for auditors its:

• A Breakdown of segregation of duties
• No approval workflow
• No physical access controls
• Fire exits? Absolutely not
• ISA 315* has left the building

*ISA 315 (revised) - ISA 315 is an International Standard onAuditing that addresses an auditor's responsibility to identify and assessrisks of material misstatement in financial statements. 

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If Black Friday were an internal audit finding:

High risk.

Repeat Finding.

Management DOES NOT agree.

The Markdown prices? Manipulated Financial Reporting.

It’s no secret that prices are manipulated before a sale. It’s a phenomenon many retailers practice to get your attention, create the impression that you are saving money. They increase prices just before, then drop them again to their original price. For example, you’ll be minding your own business when you see a sign saying:

“WAS R9.999 NOW R3,499!”

To someone looking for a bargain, on the surface, this seems like a win. But my Auditor instinct makes me think twice: Now, I have professional scepticism, also known as “Show me the prior period pricing evidence, Sharon”

Black Friday Stocktakes? Impossible

On Black Friday, stock rooms would be pure chaos – inventory moving faster than a junior staff member can be asked:

• Are your working papers ready for review?
• When are you submitting your LOR?
• Can you phone the client instead of sending emails?

Perpetual inventory system? It has perished.

To perform a Black Friday stocktake, you’d need:

• 4 audit seniors
• 2 calculators
• 1 risk register
• And most importantly: 1 seasoned priest

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Revenue Recognition on Black Friday

Black Friday turns revenue recognition into an emotional support exercise

Retailer: We recognise revenue when the sale occurs

But auditors know better: The customer returned it 24 minutes later because they found it R10 cheaper at another store like Checkers or Pick n Pay

IFRS 15* + Black Friday = Variable consideration with emotional instability

Under IFRS 15, you’re supposed to assess the probability of returns, estimate constraints, consider whether the transaction price is reliable, and evaluate whether control really transferred—meanwhile the customer is already halfway home, Googling “refund policy”

*IFRS 15 is an International Financial Reporting Standard that provides a single, comprehensive model for accounting for revenue from contracts with customers.

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Cut off Testing (Financial year end shopper… sorry)

Cut-off testing around financial year-end turns every shopper—and every auditor—into a reluctant timekeeper.

• Sales at 23:59
• Refunds at 00:01
• Deliveries in 3-5 business days
• Returns in 3-5 minutes

At this point, even IFRS throws its hands up in disbelief

Cut off becomes: record it whenever the chaos finally stops long enough to make sense.

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Discounts = Impairment Testing

A Black Friday “70% off” special is just:

Black Friday discounts are really just impairment testing in disguise—because that flashy “70% off” tag is often nothing more than IAS 36* applied to products nobody wanted all year.

That Philips 1000 series Analog 6.2L Air Fryer has seen things (like emotional damage)

*IAS 36, "Impairment of Assets," is an International Accounting Standard that addresses how companies should account for the impairment of assets.

Control Testing: Absolutely Not!

When it comes to control testing on Black Friday, every auditor instinctively knows the answer – defs not. Whatever theoretical controls exist in the SOP manual immediately disappear the moment the doors open.

The reality on the ground looks nothing like the flowcharts—more like organised chaos with a barcode scanner.

Black Friday observations:

• Cashiers overwhelmed
• Tills freezing
• Supervisors sprinting
• Store managers crying
• POS systems that are begging for retirement
• Customers throwing hands over the last few Smeg kettles

Conclusion:

“Controls are not operating effectively”

Management response:

“We tested them and found no exceptions” Of course you did

Budget vs Actual? Xero chance (smug face to be inserted)

When it comes to Budget vs Actual on Black Friday, there’s honestly Xero chance of anything lining up:

Marketing Budget: R10,000. But what lands up actually being spent? “I don’t know… maybe R850k”

The only variance explanation anyone can offer is: “Black Friday Happened”

• CFO Approved
• Audit manager accepts because honestly same

My Final thoughts?

If we can do Home Affairs applications online now, we can definitely do your Black Friday shopping online too (it’s called Cyber Monday, save yourself from those crowds!)

And finally…

SA consumers on Black Friday

While SA consumers vie to take out loans, max out cards, tap now and cry later

Auditors will say:

“Going concern indicators noted”

May your WiFi be fast, your cart not crash, your clients reply quickly, and your discounts be real.

Black Friday is chaos… But hey, so is every audit. We’re trained for this.

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