Even if you’re not an auditor, please do not get put off by the title — it may help you understand that there are endless devious paths to auditing and accounting frauds — and you can wonder if you know any auditors like this! If you’re a good auditor, you already know this, so you can nod your head in empathy. If you’re a lousy auditor, you’re probably not going to read this post anyway 🙂
This story was narrated to me by my one-time colleague at the bank. (No, neither of the guys mentioned in my previous post!)
When he was with a Big 4 audit firm in Singapore, he was leading a team for a particular audit. A young woman, who reported to him on this project, turned in her findings. My friend, who is anyway thorough in his work, was aware that this woman was in the habit of taking shortcuts, so he decided to go over her report very carefully. For her test XYZ, she had written “Refer to result of test D”. When he checked test D, she had written “Refer to result of test C”. He kept digging and digging — C led to B, B led to A, and A led to — you guessed it — XYZ! Therefore, what appeared to be an innocent case of nested references actually turned out to be a circular reference!
When he questioned her, she lashed out at him, “Gosh, you’re so suspicious! Don’t you have any better work to do? A senior person like you should not be checking every result with a fine-toothed comb!”
[Incidentally, this woman now holds a senior post at a bank in Singapore.]