An early lesson learned from audit while working as intern

It’s a good thing for accountants I decided not to continue as one. Experiences that show us what we shouldn’t do are as valuable as those that show us what we should. Being an accountant showed me I shouldn’t so it was a good thing I was.

Plus, it taught me how to audit a scrap pile.

When I graduated from high school I received an accounting scholarship to Alpena Community College. It paid my tuition and provided part time and summer employment at a local CPA firm. In time, the firm assigned me to help the CPAs with audits. One of those audits was of a local manufacturing concern whose books showed a value for a scrap pile. The CPA in charge asked me how I would check the validity of that stated value.

I replied that I would compare the in and out scale receipts to determine the weight of scrap remaining or measure the size of the pile and calculate its volume. His response to my proposal was to rise and say: “Follow me.” We headed outside to the factory yard and there it was – The Scrap Pile. He looked at me, I looked at him – he nodded.

As simple as this audit technique is it continues to elude many. How about that recent Flint water disaster? The people who should’ve looked but didn’t are now saying others should’ve done what they didn’t; a proposition, it appears, best consigned to a scrap pile. I feel sorry for the people of Flint.

I suspect your surmise is that the originators of this cunning – Look to See – audit technique were shrewd, sharp eyed accountants. Not so, they were wily old farmers.

When a new barn needed to be built farmers would select one of their own, usually an older experienced fellow who could cipher. This old guy would cut a stout stick to a predetermined dimension. Thereafter, he would employ it to guide the barn’s creation. Many a fine barn with walls true and sound were built using this old stick method.

Occasionally, prankish youth would conspire to whittle a little off the old man’s stick. But their mischief causing efforts invariably failed. Those old farmers knew to look – they never failed to look – to confirm that the dimensions of the stick at the beginning of the day matched its required dimensions. Only after that affirmation did the new day’s work begin.

Some folks maintain problems won’t exist if you don’t go looking for them and you don’t need to go looking for problems said not to exist. I can’t account for that, neither can an accountant; nor, for that matter, can anyone who professes either.

Consider instead using the, Scrap Pile Audit Technique described above based on that tried and true “looking” methodology utilized by those wily old barn building farmers.

All of which comes down to this: get yourself up, have a look around, and always – Always – measure the stick.

Doug Pugh’s Vignettes run bi-weekly on Tuesdays. He can be reached via email at