HPP BIZ: Part the third

[BillyB]

I was on a dysfunctional board many years ago. Due to financial problems they had just fired the manager and had hired a series of board members to manage the store. They had just hired a competent manager when I came on board.

They had only been doing an annual audit for over 20 years so the inventory showed on the books as: starting, plus purchases, minus sales. Since those figures added up they paid the accountant $800. done. No one had ever done an annual inventory for those audits.

The new manager asked for a forensic audit, and the inventory discrepancy was huge.
The old board members immediately accused the new manager of stealing all that was missing.
I had been at tent sales over the years and had witnessed people loading their own trucks with extra everything and no one was watching. Sales were handled at a table and no record of what sold was kept, so all that stuff was still carried in inventory.
I was the only accountant on the board, and defended the manager, because much of what was missing had been stolen or discarded over many years, it was just that nobody kept tract.


The moral of this story is if you want to know what is going on you need to do more than pay $800. to have someone check your second grade arithmetic.

FYI they went bankrupt.