Recently Developed Audit Techniques
by CHARLES L. BAGBY Senior Assistant Accountant, Atlanta Office
Presented before the University of Georgia Chapter of Beta Alpha Psi—December 1966
WHEN I was a member of Beta Alpha Psi I was a senior in college with one quarter remaining before graduation. At that point in my training, in addition to the two introductory courses, I had taken approximately
45 hours of accounting. Included in my training were the two auditing courses. I felt that I was prepared to take the big step into public accounting at that very moment, even though I had been warned by all my professors of the big transition necessary between the classroom
As I soon discovered, the professors were right. In my first two years in public accounting I have discovered three obvious facets of this profession that in my own mind greatly distinguish practice from the classroom. One is the importance of being able to gather the information
necessary to analyze the financial statements. Whereas in college you are given this information in connection with a specific problem, in practice you must sort through all the related information to determine what is relevant and what is irrelevant. This ability becomes of greater importance as you advance in the profession and encounter more difficult
A second obvious difference is the increased emphasis in practice on the ability to distinguish between significant and insignificant deviations
from accounting principles or procedures. In the classroom you are concerned with exactness in the problems assigned; however, in practice, deviations or misstatements are compared to the financial statements
to determine if they are "material" errors. If they are not considered
material deviations, the accountant can then render his opinion that the items in the financial statements are reasonably stated.
The third distinguishing feature, and the one I want to discuss in detail tonight, is the accounting profession's heavy emphasis on improving
the efficiency of the application of auditing standards. In this area, accountants are continually striving to perfect new audit techniques to facilitate the performance of the work necessary to express an opinion on the financial statements. In recent years there have been many such developments.