Students who major in accounting are normally required to take one or two courses in auditing, but other business administration majors can skip these courses. That's too bad, because a knowledge of auditing c
an often mean the success or failure of the enterprise.
By auditing, I mean more than pushing pencils and clicking keys on a computer keyboard. I mean the auditor must go into warehouses, count boxes, check serial numbers, check model numbers and so forth. When it comes to evaluating fixed assets, the auditor must be rigorous in determining the value of the physical plant. He or she must ignore the opinions of plant managers and others who would like to see the audit go a certain way.
I've seen BSBA grads who are far too timid when it comes to conducting audits or reviewing them, either for the own company or for others. In one case, an inexperienced auditor working for the loan department of a bank valued a company's current inventory at over $5 million--a figure that had been suggested by company management. However, most of the inventory was out of date. Items in storage had already been replaced by newer models, and the auditor failed to uncover that fact. The result was a misleading balance sheet and greater risk for the bank that was making a loan.
Business schools should take a two-fisted approach when teaching auditing. No more being nice guys. If students complain about the rigors involved in conducting accurate audits they should be invited to transfer to another academic discipline. Business is no place for limp-wristed whiners.
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