Learned Inefficiency: Box-Cutters vs. Bad Numbers
These days, it seems like everyone is in trouble. Just pick up a paper or turn on the news and you can hear about accounting firms getting fined for violating independence rules and federal agents breaching airport security with alarming regularity. I know you’re wondering, what’s the analogy?
|Low Cost Accounting Software Support
Provider of low cost support, consulting, training and custom report writing for MAS 90, MAS 200 and MAS 500 accounting software systems. Call us toll free at 1-866-762-3990 to learn how we can help. http://www.saveonsupport.com
The easiest way to compare the two examples is by labeling both failures as learned inefficiency. No matter what your profession, if you stare at enough baggage x-rays or balance sheets all day, eventually something just slips through. Especially when the something isn’t what you are expecting or, more to the point, it’s exactly what you are expecting. The most spectacular security and accounting failures usually result from something that appears totally acceptable to the trained eye.
The 9/11 hijackers didn’t storm the planes with machine guns. They slipped on with box-cutters. In the famous Wesson Oil fraud, the auditors simply failed to anticipate that their client, who they had come to trust, would deliberately deceive them. Every time the auditors went to check that the inventory actually existed, the tanks were full of oil. So what if it was the same oil, being funneled from tank to tank? The auditors saw what they expected to see, even if a closer examination of the underlying numbers would have exposed the fraud before the losses increased exponentially.
The lesson here is that anyone can be fooled if their opponent knows what they are trained to look for. Learned inefficiency comes from someone performing the same function repeatedly, until it is so mechanical in nature that mistakes occur. As someone who spent decades successfully fooling credit analysts, I knew that by giving someone, even a professional, exactly what they are expecting on the surface, you will usually be successful in fooling them. Of course, it was my own learned inefficiency that caused me to repeat my actions over and over, until I made the mistake that brought the Secret Service to my door.
Once we become comfortable with our function or routine, we are more likely to relax and make mistakes. Unfortunately, that very human flaw is found at all levels of professions, from airport baggage screeners to accountants and auditors and even professional criminals. The baggage screeners with 100 percent efficiency would soon find themselves out of jobs, as more and more people missed their flights due to screening delays. Likewise, pity the poor auditor who is 100 percent efficient but doesn’t get the 10-Q filed in time. That auditor would probably find themself looking for work as a baggage screener.
So, should auditors be baggage screeners? Probably not. As both groups are human, no perfect system for the prevention of security failures will likely be developed any time soon. The most spectacular failures of both groups will undoubtedly be coming to your newsstand or television in the near future.
Written by John Kammin of The Pros and The Cons. www.theprosandthecons.com
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.