The Auditor the Instructional Novella

This Novella is written by James K. Loebekke, which is a very good supplemental reading for
those who want to pursue Public Accounting in their career. This is a great novella for those
students who want to choose their own path rather than following in footsteps. The main
character in this novella is Jack Butler, having a hard time works for the field of accounting at
the beginning and success later on his career. The authors goal was to show us the important
messages relating to public accounting field such as communication skills, importance of
peoples skills, ethics, hard work and dedication to work. Now I would like to discuss the critical
analysis of the The Auditor the instructional Novella

Chapter one: The Big day
In the very first chapter the main character of the novella Jack Butler was introduced. He
graduated from Farwestern State University with a MBA. He works at the fictional firm in
Oakland, California. He has been working in this firm for almost ten years and his ultimate goal
was to become a partner of this company. In this chapter he seems very anxious to know
whether he has made it to become a partner or not. His wife Libby suggests he should not
worry about it at all because even he does not become a partner, their life will not change. We
also introduced two of his colleagues Don Pamell and Barb Gillespie. Also we came to know the
most responsible person of the company Quentin Barnes who is also called by The Bear.
Barnes and Jack had a good relationship inside the firm and outside the firm as well. They are
also family friends and they both play golf together. So when it comes to decide the partner of
the year, Barns support Jack to become a partner. Out of three people only Jack and Barb
qualified for the position. When Jack got the good news he was happy at the same time he was
unhappy because his best friend from school Don did not make it to become a partner this time.
The first chapter ends with good news for Jack, and his wife Libbys planning for a celebration
for this new journey of their life.
From the first chapter I have learned how some people can reach their goal by work.ing hard. It
gave me very good insight into the process of becoming a partner and I also realize why people
fail to become a partner though they have been working at the company for a long time. I tried
to think from Dons perspective as well, first it feels Iike whatever happened to Don is not fair.
Then I realize doing the job at work is not enough to archive the goal in life. It is very hard for
Don to decide whether he quit the job and go somewhere or just work on his shortcoming and
hope for the next time.
Chapter Two: Celebration
This chapter begins with Jack celebrating his success with his family, friends and co worker of
the firm Barbara Gilllispie. Barbara is a top tax person in the company and very nice person to
work with. She is also got promoted to a partner along with Jack. Jack and Barbara having lunch
together, they discuss their time at the firm as it was both challenging and rewarding. Barbara
thinks as women she has to work more than a man to achieve her goal. Sometimes her path
was not really easy, and then she looks back and mentions previous manager Stan Wright who
was being a jerk. Stan was an audit manager of the firm back in that time and Barb had very
bad work experience with him. One day Stan sexually offended Barb, she stood up for herself
and warn him not to do that again and wanted him to apologize to her formally. For Jack, he
was very happy with his new promotion and also worried afraid he may not give enough time
to his family since there was a high divorce rate between partners.

This chapter deals with the universal problem of the unfair treatment of men and women in
workplace. There is lot of stories of successful women dealing with so much hardship, yet they
are not given the same chance as other guys in the office. As Barb mentions in the novella,
over half of the accounting graduates are women and only 10 percent are promoted as partner.
But the good thing is times are changing now. Another very important thing caught
my attention is, sexual harassment in corporate field can be exist as an ugly reality still in
todays life. The best way to prevent it would be, we should stand agains
t it. We need to raise our vice for this. Jacks wife prepared a romantic dinner for Jack to celebrate his su
ccess, which was really nice. Jacks wife was always in his side to face good and bad time with him.

Chapter Three: School days
This chapter starts
with Jacks passion for becoming a great golfer with a good golf school but
the accident made him change his path. The next best choice was to become a lawyer like his
father Art Butler, who was a successful layer also a partner in a law firm in San Francisco. Jack
chose to go to FSU for his schooling because it was close to their home. Jack wanted to pursue
law as his career but when he made A on all his basic accounting classes, he changed his mind
to become an accountant. Wally Garner, a professor and an advisor of FSU helped him a lot
with good advice to take decision regarding his accounting career. Jack was not quite sure
which career he would chose, he had three options: work for industry, government job or
become an internal auditor. Jack took Wally
s advice for this issue. According to Wally, internal
auditor would be the best choice. Internal auditor knows possibly everything about the
company and it will also help him to become a partner later in his career.
I can relate my own life with this chapter. When I started my schooling I was not sure about my
goal. But once I took my first two accounting class, I started liking this subject. I also learn one
should follow their own passion to achieve the goal. Jack did not blindly follow his dads
footsteps. He chose his own path which gives him a complete success in his life.
Chapter Four: Get a Job
In this chapter jack started taking some graduate level courses and preparing for job interviews.
He started attending
Meet the Firm Night
to meet some rec
ruiters. He learned about
leadership, communication skills and he developed his personal skills day by day. After doing all
this he was able to line up ten interviews with different firms. Jack got two interview scheduled
with two different companies. His interview with the firm executives was interesting. Jack first
time met with Mr. Barnes at the interview. Jack impressed Mr. Barnes by solving a sampling
statistical problem. Jack also explains, in order to solve audit problems auditor need to know
how much risk they are willing to take. Later Jack got the job offer from both the companies.
With Wallys help Jack decide to take Barns job offer. Wally advised Jack that he should take
the job which he feels more comfortable. It turns out to be Mr. Burn know
s Jacks father, they
play golf together. Wally also advised him to start doing networking which will help him in long
run if he want to become a partner of a company.
This chapter gave me some idea about how to get the first job. Looking for a job is not easy, we
need to get well prepared for that. As a senior in college I think this chapter really helps me to
understand how I can start looking for a job and what should I do before look for a job. Like Jack
he prepares himself very well to face interview question. At first he get little bit confused but as
time went by he became more confident than before. This chapter is very inspiring for a fresh
graduate.
Chapter Five: Getting Started
In this chapter Jack started his job on July 1st. He met The Bear and was introduced to
Bearisms a list of rules that a CPA should follow to become a good auditor. After couple of
weeks Jack goes to Michigan for training. Once he finishes his training, his first assignment is to
a very important client under Walters supe
rvision. At work Jack found out one of his co worker, Mrs. Glenn, taking money away from petty cash fu
nd to support her child, and later return the
money. She never got caught because she is the one who is in charge cash receipt and book
keeping. Jack found another problem once he audit inventory, he noticed the person in charge
for the inventory count is putting the wrong measurements. Jack talk to the plant manager
about it and feels good about his decision regarding the problems.
I learn some valuable stuff from this chapter. First one is how an intern starts their job in a real
corporation. I always wonder about training period, I learn some insight knowledge how an
intern get comfortable in a real job. I was not sure a couple of weeks training can be so helpfull
for an intern, and Jack got lot of work experience. From the training I also learn ethic is very
important at work place. There are lots of unethical job done inside a company which can be a
big mess end of the day.
Chapter Six: We are Family
This chapter starts with Jacks two goal of his life. First he wanted to pass the CPA examination
in first sitting and next one is low gross score at the golf field. At the companys big event Jack
met Libby and they got married a year later. At that time an unexpected thing happened in his
work. He and Arthur Pringle was working together to audit Rineholt shipping company. Both of
them were working seven and half hours every day. But Arthur put eight hours in his time sheet.
Once he got caught for that he le
ft the company. Their job was to audit cements shipping
subsidiary, they needed to make sure the inventories are being carried. Jack referred the
observation job to a different officer, after careful review of the firms policy and procedures.
There was some problem found in Denver office and Jack went there to help them out. By
dealing with Denver office problems Jack obtained more knowledge about taxation and he also
passed the CPA exam. He got promoted.
What I learned from this chapter is, if you commit fraud you will be responsible for your karma.
If you chose wrong path to achieve your goal you have to pay it back at some point. Jack creates
a wonderful example by showing us how he manage to go to Denver to work for that office and
also passed the CPA exam together. He achieved multiple goal at the same time which is really
amazing.
Chapter Seven: The Growth Years
In this chapter Jack got promoted to a supervisor position and his growth has been started with
this. Its quit interesting to see how jack
moving up from newcomer to a full- blown statistical
expert. With a new position Jack has to deal with more responsibilities. The two most
important responsibilities are delegating work efficiently and review job training. Jerry helped
jack to develop necessary skills as a supervisor. Jerry showed him how to deal with higher level
client and how to handle meetings. New challenge occurred when he had to work with Frazier
Manufacturing, regarding internal control. He found out companies book-keeper Martha
OL
eary was given too much trust. But the good this was Jack did not find any fraudulent
activity so far. Jack helped Harvey Bendell to solve inventory observation problem. Jack had
very good knowledge of statistics so he impressed Harvey by solving statistical problems. Later
Harvey assigned him another assignment with public client. By doing this Jack improved his
communication skills faster. By the third year Jack got promoted once again as a manager. He
started to serve all the west coast offices.
In this chapter I learned both small and big companies are equally important for the public
accounting firm. Small companies generate good revenues. I also learned that if I chose a good
minor like Jack there is a good possibility to do well in my career. Regarding fraud, there are
some people who will not commit fraud though they got opportunities. I admire those honest
people who would not commit fraud regardless of their personal financial crisis.
Chapter Eight: People Problems
This chapter deals with how Jack face with people problem, he has to work with Stan Wright.
Stan was giving so many problems to his co workers. Everyone was getting tired of his attitude.
Jack had to deal with him very professionally. Stan was a dishonest person, intimidated
subordinates,
made staff work over time and later take credit for other persons hard work.
Jack had to work with him on the Ardmore Casting audit engagement. Stan cut down 10
percent of total staff time then previous year. So all the employees works under him had to
suffer. But Jack was a man of ethics and professionalism so he handled Stan very well. During
this project one of Jacks co
-worker Barney was having marriage problems. Jack let him take the
weekend off and fix the problem. After the assignment with Ardmore was completed, Bill
apologized to Jack for not being around to help him. Bill overwrote Stans evaluation to
promote Jack as a manager.
From this chapter I learn working with a people like Stan can be very challenging for a person.
This kind of people probably grows professionally but not personally. Stan will make other
person uncomfortable to work with him. He is not a good leader. A good manager should treat
his/her sub-ordinates fairly. To deal with this kind of manager we definitely need to step up and
raise our voice against them. We also need to encourage manager like Jack who is very hard
working and people person.
Chapter Nine: People Solution
This chapter deals with Jacks bad experience working with Roy and Stand but he learned more.
Jack finally gets to know Mr. Barns properly. Jack finds Barns always taking his side even though
it was not a good time for Jack. In the 4
th

year of Jacks career, he audited a client called
California Holdings, Inc. The CEO of the company George Pearson and Mr. Barne
s are friend
over the years. When Jack was auditing the company he found some financial problems exist.
Jack noticed the company needed extra capital to meet federal requirements. For that more
physical asset were put forth as collateral for the debt. Jack thought it was necessary to disclose
the collateral arrangement in the footnote of the financial statement. But Mr. Pearson was not
happy with Jack and he wanted to talk to Mr. Barnes to fire Jack. After talking to Mr. Barnes,
Pearson realized he was wrong and apologized to Jack. Then Bobby and Jack wrote a twelve
page long letter detailing nineteen specific problems. They also include recommendation to
solve those problems. Overall Jack concluded that a good relationship throughout the
organization is very important key to achieve success.
In this chapter I learned that relationship is very important in work environment. A good firms
development depends on its employee. I also learned that we need to take initiative to find the
problems and disclose it properly. We should face the problems if its bother us. Jack set a very
good example by standing out to face the problems by disclosing the fact on the footnotes.
Chapter Ten: Thinking like a Partner
After four years of working with the company Jack got promoted to a manger position. At that
time jack considering staying with the firm and becoming a partner later in his career. To jack, a
partner should have excellent communication skills, practice skills, technical and behavioral
skills. Considering his strength and weaknesses, Jack concentrated his plan for his fute on twi
things: Becoming a good partner and improveing his expertise in the construction industry. Jack
consult with bill about his possibility to gain necessary skills for partnership. Bill offered him the
office training director position for the following year. Another person got promoted beside
Jack is Don Parnell, he was assighned to Rineholts engineering division.

During Jacks fifth year, Jack was working on his plan to become an effective
bisuness developer
in his field. Jacks father Mr. Art and The Bear two peoples who always gave him good advices.
They adviced him to build a strong network which will help Jack to become a partner. So he
started to collect as many partner as he could. Everything went well as he planed.. He also
joined Association of General Contactor, from this organization he was able to get two more
clients. Jack also worked on some formal research and writing. He wrote two articles. The first
article was about the available software to the contractors of various size and types. The article
was well received and later he was asked to speak about it at the national Association of
General Contractors meeting.
From this chapter I came to know how important to keep good relationship with a client in
corporate field. It can help growings the business very fast, usually what happens, new client
client come to you because they were referred by current clients. I also learned that networking
with old friends can be very beneficay for future success. It will never hurt to keep in touch with
old friends. Never know will come forward to help you when u need their help.
Chapter Eleven: The Big Hit
This chapter talks about Jacks big hit in his seventh year with the firm. Jack found
some
problems in one of his client Flight-Freight International from Hank Maskeller. The CEO Reston
Smith was the decition make of the company. Jack found couple of problems while auditing FFI.
The first one cash flow problems because everything was done by hand. Once he talked to CPO
about it, he said nothing wrong with it and Jack should ignore it. The second problem was
inventory problems. They never match their inventory with the amount they got. The internal
control of FFI was out of control but Jack had to handle the case anyway.
What I learned from this chapter is, if a company is not properly managed then it will create
many problems. One tiny mistake can be a cause of a big mistake. Sometimes fixing a problem
can be a big challenge too. From Jack
s situation, he found two diffrrent problem in his client
business but he had hard time deal with those problems. Because management personnel was
helping him solve the problems. He can no stay out of this problem as well because he was told
to handle it. I also learned a good contact list can bring more new clients.
Chapter Twelve: The Rubber Meets the Road
The chapter starts on Jyly 22
nd

when Bear and Jack went to meet FFIs CEO Mr. Reston. Jack
found some serious problems of FFI which the company did not aware of. The allowance for
uncollectible accounts was materially understated and the reason behind it probably some of
the bill was uncollectible. Therefore they needed to write those bills off. He also figure out the
total understated for the uncollectible amount was $250,000. Jack was worried about
aftermath of book the adjustment, the agency may face loss of $150,000 and smith brother-in-
law was running the agency. It resulted the sognifacat amount of income went down. To solve
the broblem Smith fired his brother-in-law and let the regional credit manager handle the credit
approval process. He fixed the problems and later sold the company to Airfreight International.
From this chapter I learn ethic is very important in every situation to face corporate problems.
Bear took the right decision by losing a customer than make a decision that might come back to
get him later on. He deside to be hoinest whatever he is doing and did not suppor any fraud
activity was going inside the company. So in my job if I face this kind of problems I will
remember this chapter to take decision.
Chapter Thirteen: Life Goes On
This chapter deals with Jacks power to face many corporate problems as a partner. After taking
an afternoon off to celebrate his prpmotion he came back to work and realized there are lot of
things waiting for him to work on. The first problem he had to deal with one of his constriction
companies. The cotroller missed the deadline because he had a drinking problem. It created a
problem to prepare the report fairly. Jack found some error in it. The authority ask Jack to fix
the problem. The next problem he had to deal was to revivew working papers for his clien Stay
Fast. Jack decided to solve the problem I a unique way. He thinks it would be better if each
person should responsible for some part of audit. When they were reviwing Say Fats paper
work, Jack found out some problem and suggested to rework the repot again. At the end of the
day jack went back to finish up the day and later he got a casll from Bettis constructions. They
were having difficulty to comple the quarterly statements. After fe solved this problem he
moved to his next task about billing.
I learned from this chapter the more you get promoted the more responsibility you have to
deal with. It is good to get a promotion but it also comes with lots of headache because you will
have sharp deadline to meet. But end of the day it will worth it for all the effort to get to the
position that you want to achieve.
Chapter Fourteen: The Unexpected Happens
In this chapter one unexpected thing happened, Mr. Barnes had a heart attack. Though it was
not life threatening for Mr. Barnes nut he were suppose to reduce his work load. After
considering his health issues he decided to retire the following year. Bear wanted to promote
Jack to PIC of the Oakland office. If he did not do well at Oakland the firm will transfer him, but
Jack promise to his wife Libby that kids are his first priority. Don was offerd to get apartenrship
position in Oakland but he rather wanted to stay with SEC. He wants to become a chief
accountant in SEC some day.
From this chapter I learned, family is number one priority to our life. We dont live forever, so
we need to balance our work life with family life. Somethimes you have to give up something to
get another one. If you lose a job you will find another one but of you lose you family it will be
very hard to start the realationship from scratch. Overall this a great book for a accounting
fresh graduates. This book will help us understand pretty much every aspects of our upcoming
life such as friendship,family,ethics and worklife. This book will gave us a idea about the
corporate world and how challenging it can be if you do not know how to handle the real life
problems. I feel really good about this novella. I would sugest every accounting major student
should read this book and become knowledgeable.