Should They Not Already Have Known?

Audit Senior Series: #01

The Walkthrough That Never Happened

Farid was reviewing the inventory file for a manufacturing client. He was looking for the team's notes on obsolete and slow-moving stock identified during last Friday's year-end stocktake. There weren't any.

He called Ravi, the second-year junior on the job, over to his desk.

Farid: Where's your note on the physical identification of obsolete and slow-moving inventory from the stocktake?

Ravi: We didn't get to it. The warehouse team wanted to finish early, so once the counts were done, we packed up and left.

Farid: You know we always do that walkthrough, right? Especially for this client where the obsolescence risk is high.

Ravi: I know. I just, we were the last team still there, and they kept asking if we were done. I didn't want to hold everyone up.

Farid: So you knew, and you skipped it anyway.

Ravi: Yes. I'm sorry. But the client said they'd compiled the list and would give it to us when we started fieldwork.

Farid: But you know we have to see the physical condition of those items ourselves and can't just rely on the client's work, right?

Two Gaps, Not One

Farid's first reaction was frustration, and if he's honest, anger and disappointment too. Ravi was in his second year. He had attended stocktakes before. This wasn't a new audit procedure. It was something he already knew to do.

This is the kind of situation that makes an audit senior wonder: Should they not already have known?

In a situation like this, the issue is usually not the staff's technical knowledge. It is fair to assume that Ravi already had the knowledge. Ravi knew the step and chose to skip it under pressure, and that choice was his to own, not something to excuse as inexperience.

But Farid had to be honest with himself too. He had briefed Ravi that morning on what to count, but hadn't specifically reminded him about the obsolescence walkthrough, even though he knew the client was pushing to finish early. He had assumed that because Ravi knew the step, he would carry it out, regardless of how much the warehouse staff were rushing him.

What Farid needed to do was stop making assumptions. On the other hand, Ravi needed to flag the issue to Farid instead of waiting to be asked.

Knowing a rule and reliably applying it under pressure are not the same thing, and that cuts both ways. Ravi's shortcut was his to own. Farid's blind spot was assuming that a known procedure didn't need repeating.

What Farid Should Do Differently Next Time

First, he can give clear, direct instructions on required procedures, whether or not he thinks his staff already know them. That habit will take him a few minutes, removes the guesswork entirely, and avoids rework later.

Second, telling a one-off lapse from a real pattern is Farid's judgement call, not Ravi's. The question is simple: Would a reminder that morning likely have changed the outcome? Here, probably yes, since Farid hadn't reminded him and the client was pushing hard. That points to a one-off, not a pattern. If it happens again after a clear reminder and enough time, that's a different problem. Either way, Farid learns this from watching the next few stocktakes, not from asking Ravi to explain himself.

Third, Farid can manage the client pressure directly before it ever reaches his team. At the start of future stocktakes, he can tell the client plainly how long the test counts and the observation procedures will take, and that the team can't leave until both are done. That conversation is his to have, not Ravi's, and having it early removes the exact pressure that caused the walkthrough to get skipped in the first place.

A few days later, Farid put the first and third of these into practice before his team's next stocktake observation for another client.

Farid: I've informed the client that they must allow you to complete all your observation procedures before concluding their stocktake. This will include reviewing obsolescence and slow-moving items, and touring the warehouse to confirm completeness of count. I've told them this applies even if they're in a hurry.

Junior: Even if they push back?

Farid: Especially then. Fifteen minutes during the stocktake is better than a return visit afterwards.

So, should Ravi not already have known? Yes, he should have. The obsolescence walkthrough was never new information to him. But knowing a rule and applying it consistently while a client is rushing you are two different things. Ravi's call to skip it was his to account for. Farid's habit of assuming instead of spelling the requirement out clearly was his too. Audit runs on teamwork, and not every hiccup is caused by one person's mistake.

 

Curious what this same relationship looks like from the other side of the desk? Is It Them? (Part 1): Working With Your Audit Senior explores it from the junior's perspective.

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