Three Interesting Questions - Part III - Oh, the Fun We Have

This week, I’ve been addressing a couple of questions brought up by Wisnu Marbun. He brought up a number of points in response to my post last week. Monday I talked about how much knowledge an auditor needs, and Wednesday I talked about how the continuous search for knowledge can help an auditor prove he or she is ready for any assignment. Today we face the last and infinitely more interesting question - what is your most unforgettable moment as a junior auditor? 

Hmmm – where to go with this one? Probably not the time I was doing fieldwork and drove the rental car over a jack while driving to Rhyolite, Nevada and poked a hole in the gas tank. Probably not the time I turned in my very first audit report on computer card control (I was a junior auditor a long time ago) for the 77 Account and, after the supervisor sent it back for me to rewrite, I instead turned in a story of how the 77 Account fairy would come and work the cards overnight. Probably not the time I realized my illegible handwriting was making it impossible for our secretary to type the final report, so I just went to the green screen terminals, cleared the screen, typed on that, and printed it out for her to type from. Probably not the time in Albuquerque, New Mexico I got the rental car stuck driving down what, in retrospect, was pretty much a cliff rather than the road it purported to be, so I jacked up one side of the car and then drove off the jack and tumbled down the remainder of the cliff/road.   (I seem to have a problem with jacks.) Probably not the time I was doing my first fraud investigation and the person was writing out her confession and stated this was very hard for her but that it was probably real easy for me since I did it all the time and I managed not to break into a big grin and tell her that she was wrong and I was excited because it was my first investigation. Probably not the time I found out the audit we had scheduled for two days in Las Vegas actually only took one hour and, when I called into the supervisor, he basically replied to not tell anyone and go have some fun. Probably not the time we were so bored on the last work day before Christmas that we converted our business cards into playing cards and played poker until we got a phone call based on a confirmation letter that eventually led to an investigation and termination of an employee the first working day after Christmas.
 
No, rather than go that direction, I want to talk about the second audit I performed. Let’s start with some background. When there are a large number of losses occurring from the same event (think hurricane, hailstorms, fire) insurance companies will declare a catastrophe. Over a certain amount, reinsurance then kicks in. (Reinsurance is the insurance company’s insurance on the insurance.) I was asked to audit the reimbursement process. I went over to our claims department and was given a list that showed all claims that occurred approximately the same date as the catastrophe. There were various check marks on it and the claims clerk advised that she would look up the loss, determine if it should have been coded as a catastrophe, place a check mark next to those that need to be recoded as catastrophes, and then send it down to IT for them to recode. I then took the list down to IT where I was told that they looked at the list and, if the entry was marked with a check mark, they knew everything was okay and they did not have to make any changes. Two quick conversations and I found where we had missed out on a hundred thousand dollars (80s dollars) in reimbursements.
 
Memorable for a lot of reasons. First, I decided I wanted to work on a commission basis (based on the remainder of my career, it’s a good thing that didn’t happen). Second, I learned how just a few questions can lead to large savings. Third, because this was an example of an auditor not knowing any better and asking the questions that get to the good stuff, I became aware of the hidden brilliance of naïveté. (Side note: The auditee made the comment, “You guys have audited this the last three years. How come you never found it?”) Fourth, I learned the importance of everyone actually talking, and how important it is to ensure what is being said matches what isn’t being understood.
 
Moral of the story? You have to have fun.
 
So, what is your most memorable story?
 
Thanks for listening.

Posted on Aug 20, 2010 by Mike Jacka

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  1. Darn!! I was sure the "Probably Nots" would include your report that started "A long, long time ago in a department far, far away...." and kept the theme going through to the end. Or what about crashing the steno pool's word processor because you were storing a book you were writing on it? Or what about ... But you got the main thing right: you've got to have fun while solving the mystery!
  1. Actually, the 77 Account fairies were part of the report you mention.  And, now that I think of it, maybe I'd rather you didn't share any more with everyone else.

  1. My undergrad degree was forestry, not accounting.  I was in IA as a developmental assignment, and the first audit they had me on was tree trimming contractors.  A "real" auditor took me out to count stumps (really!), and at the end of the day, back at the office, he told me to stop by his desk to talk about tic marks.  I told him I didn't need to -- I had worn long socks and boots, and was tick-free.  He mumbled something about the problem with the company being that it tried to make foresters into accountants, and accountants into foresters.

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