Save Time with Online Meetings
Feb 10

CPAs Save Time with Online Meetings: Getting Started

By Charles Hall | Technology

CPAs save time with online meetings. At least, they do if they know how.

Are you tired of driving hours to see clients? Or maybe you drive two hours to meet with a customer and realize you left files on your office computer. Online meetings solve these problems and make you more accessible. Below I show you how to get started. 

Save Time with Online Meetings

Pick an Online Meeting Solution

First, you need to choose a video conferencing solution.

Some popular alternatives include:

Here is a PC Magazine article that compares these products (and others). All of these packages offer free trial versions. And they all provide similar abilities. The main thing is they allow me to share what’s on my computer monitor and my voice. 

So, what video conferencing software do I use? Zoom. Why? It is easy to use and reliable. While Zoom offers a free version, I use their paid Pro version. Below I demonstrate a Zoom session so you can see just how easy online meetings are.

 

The point of this article is not to sell you on a particular online meeting product (though I do like Zoom), but to sell you on the concept. I have spent years of my life (at least it feels that way) driving to and from clients’ offices. So when I heard about online meetings, I gave it a try.

My First Online Meeting

My first online meeting sold me. A few years ago I was assisting an attorney with a forensic project. My final report was several hundred pages long. Rather than making a 4.5-hour trip to meet with my client, I did the following:

  • Opened the draft report on my center computer screen
  • Opened supporting documents on my two side computer screens
  • Shared my center computer screen using my online meeting software—the attorney, once he clicked the link I emailed him (see the next bullet), could see my screen
  • Sent the attorney an email (with a hyperlink) to join the meeting—my online software automatically created the email as I invited him 
  • Called the attorney with my cell phone and went hands-free so I could use my mouse (you can use your computer audio, I just prefer using my phone)
  • When the attorney answered my call, I told him I had sent him an invitation email, and I walked him through connecting (which took less than two minutes)
  • We reviewed the draft report from my center computer screen
  • When needed, I moved supporting documents from my two side screens to the center display (and then moved them off as needed)—think of this as moving information on and off stage

The meeting lasted one hour. Once done, the attorney said to me, “This is one of the best meetings I’ve ever attended.” 

So rather than taking 5.5 hours (4.5 hours of driving and the 1-hour session), the meeting took 1.5 hours (including setup time). I saved four hours—and I didn’t even have to sit in the attorney’s lobby and wait for him. Also, I didn’t have to stop and refuel my vehicle—or file an expense report.

If sharing video works with an out-of-town client, does it work with in-the-office staff?

Online Conferencing in My Office

Yes, online meetings work with others in your office as well. Why? For the same reasons. I can share any information from my computer screen. And I can invite several people to the meeting at the same time. They can view what I am sharing from the comfort of their offices. Believe me, it’s better than several people huddling around one computer.

Other Online Meeting Thoughts

Here are some additional thoughts about online meetings.

Though I don’t do so often, I can record my online meetings in Zoom. Then if I need to watch the session, I can.

Once you are in a Zoom meeting you can share your mouse. This allows your client to control your computer. I find this useful when my client wants to show me something. Rather than the client telling me where to click, I simply hand the mouse control over to her. Then she can move around in the documents we are viewing.

Are there any downsides to online meetings? Yes. Some people don’t want to be seen. Perhaps they are working from home and are still in their pajamas. If they have their camera on, you will see them, and if your camera is on, guess what? Yep. They can see you. You can, however, turn your camera off. And they can as well.

For a more professional look, consider buying a video camera. I use a Logitech 930e (cost is $71.50). It sits on top of my right monitor. Why buy a camera? For higher quality video. Additionally, the camera has a microphone. If you’re wondering about the quality of the video from this device, see the recording above. I used the Logitech 930e for that one.

Sharing Video with a Client

What if your client is too busy for an online meeting? Record a video and share it. I can do so from Zoom, but I use Camtasia to record my videos. (A single license is $249.)

Say you need to explain the details in a lease document. And you want to show and explain the related journal entries. Turn Camtasia on and shoot the recording with your Logitech camera. Whatever appears on your monitor (e.g., lease agreement in a PDF; journal entries in Excel) is captured in the video. Once done, save the video and send a link to your client. And why do this? So your client can watch the presentation at her convenience.

Don’t want to be seen on video? Then turn it off. Camtasia provides that option. You can record what you present on your monitor and your voice narration–with no video.

I store my videos on Screencast. The cost is $99.95 per year.

You may wonder why I use Camtasia and Screencast, especially when I can record and store video with Zoom. The short answer is I create training videos. Camstasia gives me better editing capabilities. And Screencast was built for the purpose of sharing videos. So the two products (both made by TechSmith) work well together for the creation and sharing of video.

Sharing Video with Your CPA Firm Members

I create and share videos with my partners and staff. Once a video is created, I store it on my Screencast site. Then I share the video link on our firm intranet. That way I can demonstrate something once and share it with everyone. 

Your Thoughts

Do you already use online meeting or video capture software? If yes, what solutions do you use? Share your suggestions below.

Client Acceptance and Continuance
Feb 09

Client Acceptance and Continuance: The Why and How

By Charles Hall | Auditing

Client acceptance and continuance may be the most critical step in an audit, but it’s one that gets little attention. A prospective client calls saying, “Can you audit my company?” and we respond, “sure.” While new business can be a good thing, relationships need appropriate vetting. Not doing so can lead to significant (and sometimes disastrous) consequences.

New Relationships

My daughter recently met a young man on Instagram. Not unusual these days. But now the relationship is entering into its third month. They talk every day for two or three hours. So far, they have not been in the same room—and not even in the same city. Skype, yes. Physical presence, no. That’s happening at the end of this month. (He lives eight hours away.)

So what do Mom and Dad think about all of this? Well, it’s fine. My wife checked him out on Facebook (I know you’ve never done this). And my daughter has told us all about the “fella” and his family. We like what we’re hearing. He has similar beliefs. He has a job (Yay!), and he has graduated from college. His family background is like ours.

Why do we want to know all the details about the young man? Because relationships impact people—my daughter, the young man, his family members, and yes, my wife and I. We want everyone to be happy.

Client Acceptance 

And that’s what good relationships create. Happiness. The same is true with clients. As Steven Covey said, “think win, win.” When the customer wins, and your CPA firm wins, everyone is happy. Mutual needs are met.

Careless CPAs accept business with only one consideration: Can I get paid? 

While getting paid is important, other factors are also critical.

Here are a few things to consider:

  1. Are they ethical?
  2. Are you independent?
  3. Do you have the technical ability to serve them?
  4. Do you the capacity to serve them?

Are They Ethical?

I want my daughter to marry a guy with beliefs that correspond with who she is. Is he honest? Would he steal? Is he transparent? Who are his associates? What do others think of him? 

We ask similar questions about accepting a new client. Audit standards require us to consider whether the prospective client has integrity. If the company is not morally straight, then there’s no need to move forward. 

(The predecessor auditor can provide information about their interactions with the company. Audit standards require contact with the predecessor auditor prior to acceptance.)

Are You Independent?

The time to determine your firm’s independence is the beginning—not at the conclusion of the audit.

Consider what happens—during a peer review—when a firm is not independent, and it has issued an audit opinion. The original audit report will be recalled, and I’ll bet the company asks for and receives a full refund of your audit fee. Now, the company needs to be re-audited.  (Oh, and there’s that impact on the peer review report.)

Pay attention to requested nonattest services—such as preparation of financial statements. If the client has no one with sufficient skill, knowledge, and experience to accept responsibility for such services, you may not be independent. See the AICPA’s Plain English Guide to Independence for more information. (You can see additional help-aids in my list of online resources for CPAs. )

Do You Have the Technical Ability to Serve Them?

If you can pick up a client in an industry in which you have no experience, should you? Possibly, but it depends on whether you can appropriately understand the client and their industry before you conduct the engagement. Some new customers may not be complicated. In those cases, CPE may get you into position to provide the audit. 

But what if the potential engagement involves a highly sophisticated industry and related accounting standards for which you are ill-equipped? It may be better to let the engagement go and refer it to an audit firm that has the requisite knowledge. Or maybe you can partner with the other firm. 

Do You Have the Capacity to Serve Them?

A prospective client calls saying, “Can you audit my company? We have a December 31 year-end, and we need the audit report by March 31.” After some discussion, I think the fee will be around $75,000. But my staff is already working sixty hours a week during this time of the year. Should I take the engagement? 

My answer would be no unless I can create the capacity. How? I can hire additional personnel or maybe I can contract with another firm to assist. If I can’t build additional capacity, then I may let the opportunity pass. 

Far too many firms accept work without sufficient capacity. When this happens, corners are cut, and staff members and partners suffer. Stuffingeven morework into a stressful time of the year is not (always) a wise thing. We lose staff. And if the engagement is deficient, peer review results may take a hit.

When you don’t have the capacity to accept new good clients, consider whether you should discontinue service to existing bad customers.

The Continuance Decision

Quality controls standards call for CPAs to not only develop acceptance procedures, but we are to create continuance protocols as well.

I previously said CPAs often don’t give proper attention to acceptance procedures. So, how about continuance decisions? Even worse. 

Continuance Decision

Picture from AdobeStock.com

Each year, we should ask, “If this was a new client opportunity, would I accept them?” If the answer is no, then why do we continue serving them? 

Here are a few questions to ponder:

  • Has the client paid their prior year fees? 
  • Am I still independent (consider the new Hosting Services interpretation)?
  • Does the client demand more from me than the fee merits?
  • Do I enjoy working with this client?
  • Is the client’s financial condition creating additional risks for my firm?
  • Is the client acting ethically?

Each year, well before the audit starts, ask these questions.

And then consider, is the bottom 10% of my book of business keeping me from accepting better clients? My experience has been that when I have the capacity, new business appears. When capacity is lacking, I don’t. The decision to hold on to bad clients is a decision to close the door to better clients. Don’t be afraid to let go.

Risk Assessment Starts Now

When should we start thinking about risk assessment? Now.

Whether you are going through the initial acceptance procedures or you are making your continuance decision, start thinking about risk assessment now. Assuming you accept the client, you’ll be a step ahead as you begin to develop your audit plan. Ask questions such as:

  • How is your cash flow?
  • Do you have any debt with covenants?
  • Who receives the financial statements?
  • Has the company experienced any fraud losses?
  • How experienced is management?
  • Why are you changing auditors?

Keep these notes for future reference and audit planning. 

Next Post in this Series

The above is the first post in The Why and How of Auditing. My next post will be Audit Risk Assessment: The Why and How. Subscribe to my blog (see below) to make sure you don’t miss anything.

Review Quiz

Feb 09

The Why and How of Auditing: A Blog Series about Basics

By Charles Hall | Auditing

Do you struggle with what needs to be done in an audit–and what does not? Do you perform audit procedures (because they are in a standard audit program) but you’re not sure why? Do you want to be more efficient? You are not alone.

While audit forms—like risk assessment, audit planning, and audit program—are necessary, they can make us feel like a blind man being led by the hand. If you’re like me, you want to see, to know where you’re going and why. To gain sight, we need to go back to the basics. 

Each year, Vince Lombardi (the revered coach of the Green Bay Packers) held a pigskin up and said, “This is a football.” And he did so with the best players in the world. He knew that winning is all about basics: blocking, tackling, passing, running. Understanding fundamentals brings clarity and power. And that’s what I’m after in The Why and How of Auditing. I’ll strip away the technical mumbo-jumbo and make auditing accessible, even for beginners. Moreover, experienced auditors will profit as you revisit what matters (and what does not).

The Why and How of Auditing

Here’s an overview of the upcoming posts:

Moving from Wasteful to Efficient Auditing

In the cartoons I read as a kid, Lucy would say to Charlie Brown, “I will hold the ball, and you kick,” but as Charlie Brown would lean into his launch, she would pull away. And you remember the result: Charlie Brown, lying on his backside. 

Some audit procedures (like the invitation to kick) are tempting. They call us (like a familiar friend), but they are a waste of time–even if we have done these steps for years. In the end, they leave us staring at the sky. So, we need to know what is best and what is necessary. Then, we can avoid waste.

This series provides you with what you need to know—without excess baggage. By design, the series is simple. Why? To provide clarity. I want you to understand the basics of auditing. 

When you’re done, you’ll understand auditing, possibly in a way you never have. Then you’ll work with greater confidence and effectiveness. So, let’s begin.

GASB 87 Lease Accounting
Jan 27

GASB 87 Lease Accounting

By Charles Hall | Accounting , Local Governments

Are you looking for GASB 87 lease accounting information? Are you a government that leases assets? Then you're in the right place. Below I provide information about lease terms, discount rates, accounting entries, and disclosure requirements.

GASB 87 Lease Accounting

Removal of Bright-Line Criteria

Historically governments have followed the guidance in FASB 13, Accounting for Leases. Lease classifications (i.e., operating or capital) were based on bright-line criteria such as whether the government leased an asset for more than 75% of its economic life. 

GASB 87, Leases, removes the bright-line criteria and calls for more judgment. (The words reasonably certain appears thirty-nine times in GASB 87.)

The new lease standard provides for various accounting alternatives. Let's see what they are.

Three Potential Accounting Alternatives

Regarding leases, there are now three accounting alternatives:

  1. Short-term leases
  2. Contracts that transfer ownership
  3. Contracts that do not transfer ownership

Before we dive deeper, here are three quick points about these alternatives:

First, know that short-term leases do not create a lease liability.

Second, understand that contracts that transfer ownership are a financed sale.

Third, know that contracts that do not transfer ownership create a lease liability. This third category is a catchall for arrangements that don't qualify for short-term lease treatment and don't transfer ownership.

Now, let's see how GASB defines a lease.

Definition of a Lease

GASB defines a lease this way:

A lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction.

There are five points to this definition:

First, the lease must be a contract. 

Second, the contract must provide control of the right to use.

Third, this control is in relation to a nonfinancial asset.

Fourth, the control of the nonfinancial asset must be for a period of time.

And finally, the lease is an exchange or exchange-like transaction.

I think the terms contract, period of time, and exchange are easily understood. But the terms control and nonfinancial assets might cause some confusion. So let's clarify those.

Control

​A government controls an asset if it has the right to the present service capacity and the right to determine the nature and manner of use of the asset.

In other words, the government must have the right to the benefits generated from the asset. A city can drive a leased police car. That is the benefit, the present service capacity.

Additionally, Nature and manner address whether the government controls the use of the asset. A city police officer can, for example, drive a leased police car at 3:00 a.m. And she can drive it as far as she likes. The police department determines the nature and manner of use.

Nonfinancial Asset

And what is a nonfinancial asset? It's generally anything that is not a financial asset (e.g., cash, receivable). Examples of nonfinancial assets include buildings, land, vehicles, and equipment. There are exceptions, however. 

GASB 87 Scope Exclusions

GASB 87 does not apply to:

  • Leases of intangible assets (e.g., rights to explore for oil and gas)
  • Leased biological assets (e.g., timber)
  • Inventory that is leased
  • Service concession arrangements
  • Leases in which the underlying asset is financed with outstanding conduit debt (unless the underlying asset and the conduit debt are reported by the lessor)
  • Supply contracts (e.g., power purchase agreements)

Now let's see how to determine the lease term.

Lease Term

Prior to GASB 87, the minimum lease payments determined the lease term. Not so any more. In some cases, GASB 87 provides for a more subjective determination of a lease's term, one based on what is reasonably certain.

Lease Options

Under GASB 87, lease terms are not just the noncancelable portion of the agreement. Governments add the following to the noncancelable period:

  • Periods covered by a lessee’s option to extend the lease if it is reasonably certain, based on all relevant factors, that the lessee will exercise that option 
  • Periods covered by a lessee’s option to terminate the lease if it is reasonably certain, based on all relevant factors, that the lessee will not exercise that option 
  • Periods covered by a lessor’s option to extend the lease if it is reasonably certain, based on all relevant factors, that the lessor will exercise that option  
  • Periods covered by a lessor’s option to terminate the lease if it is reasonably certain, based on all relevant factors, that the lessor will not exercise that option.
Reasonably Certain Factors

In determining what reasonably certain is, the government considers factors such as the economic impact of not exercising an option or how the government has acted in the past.

Once the lease term decision is made, document your basis for doing so. Why? So there is a record of the decision. (Your auditors may want to see this. Additionally, the record provides valuable information regarding future lease term decisions.)

Fiscal Funding Clauses Affect on Term

Additionally, you may be wondering if fiscal funding clauses affect leases. (Fiscal funding clauses allow a government to cancel a lease if the government does not appropriate funds for the payments.) If a government is reasonably expected to exercise such a provision, then this factor can impact the lease term. Personally, however, I've never seen a government terminate a lease through such a provision. Fiscal funding clauses will usually not affect lease terms.

So, should governments ever reassess the term period?

Reassessment of Term

Government will generally not reassess the lease term decision. 

Nevertheless, reassessment will occur in some cases. Consider this example. The government enters into a fifteen-year lease with a five-year lease extension. The government believes that it will not exercise the five-year extension. But then in year fifteen, it does so. Now the government binds itself for another five years. Therefore, the lease is extended. And the additional five years is added to the lease term. 

Now that you know about lease terms, you may be wondering about short-term leases. How does a government account for those?

Short-Term Leases

Treat leases with a maximum possible term of twelve months or less as short-term leases. And do not capitalize such leases. 

One word of caution: if there are renewal options, include those in making the short-term lease classification decision, regardless of probability. If, for example, the lease is for twelve months with an option to renew for another six months, then the lease is not short-term. Even if the government believes it will not exercise the option.

So, how do you record short-term lease payments? As expenses.

Contract that Transfers Ownership

If an agreement transfers ownership of the asset to the lessee by the end of the contract, then the contract is a financed purchase. For the lessee, the government records the purchased asset (not an intangible) and the related debt (not a lease liability).

So, what about a lease agreement with a bargain purchase option? Should it be treated as financed purchase? The answer is no. The presence of a bargain purchase option in a lease contract is not the same as a provision that transfers ownership of the underlying asset.

Multiple Components of a Lease Contract

If an agreement has lease and non-lease components, split the transaction. 

A government might, for example, lease floors four and five of a ten-story building. In doing so, it is required to pay for common area maintenance. Split this transaction into a lease and a maintenance contract. Record the lease exclusive of the maintenance payments. If, however, it is not practicable to determine the separate price allocation, the government should account for the transaction as a single lease.

If a lease involves multiple underlying assets (say a police car and a water tank), the government should account for each as a separate lease component. 

Lessee Accounting

If the government is leasing an asset, then it will use the following guidance. (An exception exists if the lease is short-term as explained above.)

GASB 87 Lessee accounting

Initial Recognition

At commencement, the government recognizes an (1) intangible right-to-use asset and (2) a lease liability. 

So the government does not recognize the asset itself (e.g., tractor), but the right to use the asset. This is an intangible asset.

Now let's see how to compute the lease asset.

1. Lease Asset 

So. what goes in the lease asset calculation?

The government should include:

  • Initial lease liability (see below)
  • Payments made to lessor at or before commencement less any lease incentives received from the lessor at or before the commencement of the lease term
  • Initial direct costs that are ancillary charges necessary to place the lease asset into service

So what costs are not included in the intangible asset? Governments should exclude any debt issuance costs.

Notice that the lease asset can be greater than the lease liability. The lease asset starts with the lease liability and increases if, for example, the government makes a payment to the lessor prior to commencement of the lease term.

In governmental funds (e.g., general fund), the initial accounting entry is a debit to capital outlay and a credit to other financing sources. In full accrual funds (e.g., enterprise fund), the initial entry is a debit to the intangible lease asset and a credit to the lease liability.

So, how should the lease asset be amortized?

Lease Asset Amortization

Amortize the lease asset in a systematic and rational manner over the shorter of the lease term or the asset's useful life. Usually this will be straight-line amortization.

And what are the journal entries for recording the lease asset?

Lease Asset Accounting

The government records the lease asset and then amortizes it using an entry such as the following (for full-accrual funds; e.g., water and sewer fund):

Account
Amortization Expense
Accumulated Amortization - Right-of-Use Asset
Debit
XX


Credit


XX

GASB 87 says to report the amortization as an outflow of resources (e.g., amortization expense). The amortization expense can, for financial reporting purposes, be combined with the depreciation expense of other capital assets. 

Modified accrual funds (e.g., general fund) will not record an amortization entry. Why? The asset does not appear on the balance sheet.

2. Lease Liability 

How does a government compute the lease liability?

Simply put, the lease liability is the present value of everything you think you're going to pay. Prior to GASB 87, governments used the present value of minimum lease payments. Now governments include payments that are reasonably certain. (See information above regarding what is reasonably certain.)

The computation is made up of the present value of:

  • Fixed payments
  • Variable payments that depend on an index or a rate (e.g., consumer price index) measured using the index or rate as of the commencement of the lease
  • Variable payments that are fixed in substance
  • Amounts that are reasonably certain of being required to be paid by the lessee under residual value guarantees
  • The exercise price of a purchase option if it is reasonably certain that the lessee will exercise that option
  • Payments for penalties for terminating the lease
  • Any lease incentives receivable from the lessor
  • Any other payments that are reasonably certain of being required based on an assessment of all relevant factors
Variable Payments Based on Future Performance

Governments will not include payments based on future performance or usage in the lease liability. Expense such payments in the period incurred. 

For example, if a government leases a vehicle with a provision for 12,000 miles annually but the car is driven 15,000 miles, expense the payment for the additional mileage as incurred.

So, where does the discount rate come from?

Discount Rate

Use the rate charged by the lessor if specified in the agreement. If not specified, use the incremental borrowing rate for the government. This is the estimated rate the government would pay if, during the life of the lease, it borrowed the funds for those lease payments.

Lease Liability Accounting

Once the initial lease is recorded as a liability, the government will begin making periodic payments to the lessor. The effective interest rate method will be used. Record the payments as follows (for full-accrual funds; e.g., water and sewer fund):

Account
Lease liability
Interest Expense

Cash

Debit
XX

XX

Credit


XX

Post the payments to principal and interest expenditures in modified accrual accounting funds (e.g., general fund).

GASB 87 Disclosures

The following disclosures are required for lessees:

  • A general description of its leasing arrangements 
  • The total amount of lease assets, and the related accumulated amortization, disclosed separately from other capital assets
  • The amount of lease assets by major classes of underlying assets, disclosed separately from other capital assets
  • The amount of outflows of resources recognized in the reporting period for variable payments not previously included in the measurement of the lease liability
  • The amount of outflows of resources recognized in the reporting period for other payments (e.g., termination penalties) not previously included in the measurement of the lease liability
  • Principal and interest requirements to maturity, presented separately, for the lease liability for each of the five subsequent fiscal years and in five-year increments thereafter
  • Commitments under leases before the commencement of the lease term
  • The components of any loss associated with an impairment 

Transition

Apply GASB 87 retroactively, if practicable, for all periods presented. Use the facts and circumstances existing at the beginning of the implementation period to record the leases.

The notes to the financial statements should disclose the nature of the restatement and its effect. 

GASB 87 says that the provisions of this statement need not be applied to immaterial items.

GASB 87 Effective Date

The effective date of GASB 87 is for reporting periods beginning after December 15, 2019. 

Early application is encouraged. 

Audit lessons from a brain tumor
Jan 24

Audit Lessons from a Brain Tumor

By Charles Hall | Auditing

I said to my wife, “Am I driving straight?” I felt as if I was weaving, not quite in control. I felt dizzy and heard clicking noises in my ears.

The mystery only increased over the next two years as I visited three different doctors. They stuck, prodded, and probed me–but no solution.

Frustrating.

Doctor Looking at Head Xray on blue

Picture is courtesy of istockphoto.com

Meanwhile, I felt a growing numbness on the right side of my face. So one night I started Googling health websites (the thing they tell you not to do) and came upon this link: Acoustic Neuroma Association. I clicked it. It was like reading my diary. It couldn’t be. A brain tumor.

The next day I handed my doctor the acoustic neuroma information and said, “I think this is what I have. I want a brain scan.”

Two days after the scan, while on the golf course, I received the doctor’s call: “Mr. Hall, you were right. You have a 2.3-centimeter brain tumor.” (I sent him a bill for my diagnosis but he never paid–just kidding.) My golfing buddies gathered around and prayed for me on the 17th green, and I went home to break the news to my wife. I had two children, two and four at the time. I was concerned.

Shortly after that, I was in a surgeon’s office in Atlanta. The doctor said they’d do a ten-hour operation; there was a 40% chance of paralysis and a 5% chance of death. The tumor was too large for radiation–or so I was told.

I didn’t like the odds, so I prayed more and went back to the Internet. There I located Dr. Jeffrey Williams at Johns Hopkins Hospital in Baltimore. I emailed the good doctor, telling him of the tumor’s size. His response: “I radiate tumors this size every day.” He was a pioneer in fractionated stereotactic radiation, one of the few physicians in the world using this procedure (at the time).

A few days later, I’m lying on an operating table in Baltimore with my head bolted down, ready for radiation. They bolt you down to ensure the cooking of the tumor (and not the brain). Fun, you should try it. Four more times I visited the table. Each time everyone left the room–a sure sign you should not try this at home.

Each day I laid there silently, talking to God and trusting Him.

Three weeks later I returned to work. Twenty years later, I have had two sick days.

I’ve watched my children grow up. They are twenty-four and twenty-six now–both finished college. My wife is still by my side, and I’m thankful for each day.

Cades Cove, Tennessee with my wife

So what does a brain tumor story tell us about audits? (You may, at this point, be thinking: they did cook the wrong part.)

Audit Lessons Learned from a Brain Tumor

1. Pay Attention to Signs

It’s easy to overlook the obvious. Maybe we don’t want to see a red flag (I didn’t want to believe I had a tumor). It might slow us down. But an audit is not purely about finishing and billing. It’s about gathering proper evidential matter to support the opinion. To do less is delinquent and dangerous.

2. Seek Alternatives

If you can’t gain appropriate audit evidence one way, seek another. Don’t simply push forward, using the same procedures year after year. The doctor in Atlanta was a surgeon, so his solution was surgery. His answer was based on his tools, his normal procedures. If you’ve always used a hammer, try a wrench.

3. Seek Counsel

If one answer doesn’t ring true, see what someone else thinks, maybe even someone outside your firm. Obviously, you need to make sure your engagement partner agrees (about seeking outside guidance), but if he or she does, go for it. I often contact the Center for Plain English AccountingI find them helpful and knowledgeable. I also have relationships with other professionals, so I call friends and ask their opinions–and they call me. Check your pride at the door. I’d rather look dumb and be right than to look smart and be wrong.

4. Embrace Change

Fractionated stereotactic radiation was new. Dr. Williams was a pioneer in the technique. The only way your audit processes will get better is to try new techniques: paperless software (we use Caseware), data mining (we use IDEA), real fraud inquiries (I use ACFE techniques), electronic bank confirmations (I use Confirmation.com), project management software (I use Basecamp). If you are still pushing a Pentel on a four-column, it’s time to change.

Postscript

Finally, remember that work is important, but life itself is the best gift. Be thankful for each moment, each hour, each day.

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