Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Why auditing isn’t like reading a history book

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Sometimes it’s weird reading a story about the Civil War. It’s the same when reading about an audit fiasco.

People do the oddest things.

As the first major battle of the war shaped up near Manassas Junction, lots of people rode out from DC in their carriages. They brought along picnic baskets so they could eat as they watched the battle. Would be a fun afternoon outing with the children.

Lincoln’s first inaugural address is so gentle and conciliatory. So odd compared to what happened in the next few months. 

At various times he accepted compromises that are so offensive today.

The reason those seem so odd is we know what happened in the next four years.

At the time, everyone thought one battle would be all it took to force those unreasonable (southerners) / (northerners) to see the error of their ways and (rejoin the union) / (let the states go).

Everyone knew that for a certainty. Who wanted to miss the only battle of the war?

Lincoln hoped that gentle words could woo the southern states back. Calm effort had paid off before when leaders from the south got worked up. He thought it would work again.  We know 150 years later that it didn’t.

Performing an audit is like that in ways.

While planning, we don’t know what we will find in the field. During testing in the field as we try to determine the scope of an issue, we don’t know what else is there or where the actual end is on a particular problem. Only years of hindsight show us the real extent or meaning of an issue we tried to understand.

As we get ready to issue a report, we can’t be sure what we didn’t find or what we don’t know. Just like Lincoln didn’t know whether he could gently draw those upset legislatures back into the fold. Careful compromise with the South had worked so many times before.

Lee was confident just one more push at the center at Gettysburg would work when the previous two days efforts came so close to victory. Grant was convinced his troops could break through at Cold Harbor. They each must have thought, just one more push, then victory. Somewhat like us – we have all the audit work we need, we did what we should, it’s okay to release the report.

As I read about an audit fiasco, I sometimes feel like I’m reading a military history book.

No, General Grant! Don’t attack at Cold Harbor! Go around Lee again, like you did before! Oh no! Oh no. He gave the order. Here comes disaster on the next page.

It’s so obvious now.

No, no, audit partner! Ask about that thing over there! Don’t gloss over that little bitty red flag. Oh no! Oh no. He didn’t realize a key thing from fractional knowledge. She didn’t put four disparate pieces of information together. Here comes disaster on the next page.

It’s so obvious now.

We all live and make decisions inside of time. And we all have perfect hindsight.

Written by Jim Ulvog

December 6, 2013, 9:22 am at 9:22 am

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