How to Audit (Part 11): More Than Numbers
I have long argued that auditing more than just numbers. A masterly command of the English language is vital for effective working. For words that provide the narrative behind the numbers. Indeed, a career in audit has an insidiously affects ones vocabulary. If you believe that the tongue is the reflection of the heart then audit does affect one’s character (Matthew 12:33).
This blog post will give you the words to mimic an experienced auditor. There are two types: business fads and audit vocab.
Use these words in quick succession whenever you realise that you know as much about the subject matter as next week’s lottery numbers. A first year will average 114.5 of these words per hour. This decreases exponentially with experience.
You’ve been sent out on the business battlefield. I now want a progress report over a game of rounders.
It is what it is
Read: I have nothing more to say on the matter; there is nothing you can do to change the situation; and you will have to clean the mess. Goodbye.
For the win
Beat the offside trap, aim for the bottom corner, apply an accurate finish (to the accounts), three points and escape the relegation zone.
Like all fads, their inappropriate use only results in the speaker looking lame instead of looking knowledgeable. Avoid.
Auditors hate petty details and small numbers. Auditors ignore the small numbers and do allow a margin of error. Loudly declaring that a number is not material is an easy way to sounds learned and wise.
This word is an example of good audit jargon because:
- Any financially literate person knows exactly what you mean
- It summarises a difficult concept in one word
- There is not a simpler substitute for this word
“Reconciliation” means the restoration of relationship. In the accounting world, it means showing how financial information from two sources can be matched to each other. The crucial point is that both sources should produce the same number. This is unintuitive because it seems like using only one source of data would be more logical.
This is not the case, and I shall show this by using an analogy. Note that bad business jargon originated from good analogies. Imagine that one blind man and one deaf man are both witness to a robbery. A policeman called Mr Accountant is asked to write a report. The blind and deaf man’s testimonies are adequate by themselves but it’s better to use both. Also, the discrepancies between the two accounts will need to be further investigated.
The next part of the story is that the public has not much confidence in Mr Accountant’s report. So, Ms Auditor(ess) is asked to examine the report and make a comment about the truth and fairness of that report.
The “bank reconciliation” is a classic example. A company will keep its own records of their cash transactions. This is called the “cashbook”. The balance in the cashbook should be the same as the bank statement. The differences are called “reconciling items”. Using both sources together gives the most complete information about a company’s cash position.
Note that this is shortened to “rec” in everyday conversation.
It does not mean that your workpaper is a glorious piece of art that belongs in the National Gallery rather than an audit file. An “outstanding list” summarises all the work that you weren’t able to finish. Every minute spent making an outstanding list substitutes for 0.7 minutes of actual work.
Gain respect in the workplace and home with these new phrases:
Reaping to the edge of my field
Use when being overloaded with work.
Always aim for the most effective audit test.
Declare one when there is an irresolvable accounting issue
Real guitar or Guitar Hero?
Does the manager want a full or simplified explanation?
Is it Facebook safe?
Goal side view or grandstand view?
If you are lucky enough to get tickets for the Olympics
When there are two options and one has greater consequences than the other
False asymmetric dichotomy
Not the above
Knot the rope
You don’t know what it means, you just know that you have to do it.
Zero sum synergies
At the end of the day
I dislike business jargon, but I do use it. Every profession needs jargon to for complex ideas and to save time. It makes you feel part of an “insider group”. But does the English language need to be slaughtered for a few extra pounds?
Sometimes, numbers do not need works, like RBS’s record £24.1bn loss.