CHAPTER 3A – Accepting, Not Verifying
IN THIS CHAPTER, WE discuss the significance of obtaining sufficient relevant data, and ensuring that accountants and auditors do not simply accept, but verify.
INTRODUCTION
Did your parents take your word when you told them your room was clean, or did they check? For those of you who have children, do you look under their bed when they claim they are finished? Of course you do, just as your parents did! My first boss, the Legislative Auditor for the State of Louisiana, Dr. Dan Kyle, had a plaque on his desk that read, IN GOD WE TRUST. IN ALL OTHERS, WE AUDIT. And boy, did he mean it. I remember having an expense report returned, as I submitted a receipt and sought reimbursement for a two-pack of AAA batters, totaling $2.88. Ms. Mary Smith, who was in charge of the expense report verification in the accounting department, asked: “Where is the other battery? Your pager only takes one.” I am fairly certain it was rolling around the floor of the car I had lived in for the last six weeks. Nonetheless, I was only paid $1.44 for the purchase. Such was the life of a state auditor for the State of Louisiana.
It takes a lot of courage to challenge someone's assertions. One of my favorite cases involved another Louisiana ...
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