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Quote of the Week – WK/E 7 September 2012 September 8, 2012

Posted by Audit Monkey in Quote of the Week, The Joy & Pain of Internal Audit.
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As many readers of the blog will know, auditors will perform sample testing to ensure that the controls are working as expected. Sample sizes are generally devised on how frequency the control is applied and statistical extrapolation to the population. For example, if there is a monthly bank reconciliation, you would look at two reconciliations for the year. If the control is applied daily, you may look at 25 transactions to confirm the process is effective. After looking at 25 items, usually things will pop out. If they don’t, you can provide assurance that things are hunky dory.

During the course of a review, my manager asked if I had found anything. I remarked,”Nope – not a thing. Damn near perfect”. Considering that we’ve been issuing the same effing audit report to the client, albeit on different parts of the business, the client had lost the will to live and had implemented every trivial recommendation to dot the i’s and cross the t’s. (Forgive me, I can’t remember the exact detail as I’m not that interested). Issue solved.

So what does my Manager come back and say?

“Can you continue testing?”, i.e. to find something.

C’mon? Isn’t this unethical? How about being even-handed and fair? Sure, you have detection risk, i.e. that you don’t find something during the course of your work but after 25 items, as any experienced auditor will know, any issues would have emerged. I take this as bad form, slightly amateurish and shoddy. You don’t have to find something to prove your worth.


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