Sta Hungry Stay Foolish

Stay Hungry. Stay Foolish.

A blog by Leon Oudejans

The Truth

“Your kids will reconcile with you once they know the truth”, my friend said to me. I disagreed. To the second part: knowing the truth. Not to the first part. There is not such a thing as the Truth as we always lack full information. In the absence of complete information we need to make some assumptions. The alternative is being indecisive as new information might find its way to you.

I live by two mantras: Assumptions are the mother of all mistakes (Eugene Lewis Fordsworthe) and Trust but verify (Ronald Reagan). I tend to think in probabilities and thus leaving all options open. When probabilities shift then my thinking shifts too. Truth thus becomes a flexible concept rather than a crusted one. I can live with this though it is tiresome as I revisit the options and probabilities on an ongoing basis. I just never stop thinking, as one of my former colleagues once said to me.

My truth is not everyone’s truth. My mother and I may argue heatedly as we both firmly believe in our own truth. Sometimes we have a rare moment that one convinces the other. Everyone has his/her own version of the truth and these various truths are not necessarily false. They are based on our core values, the (partial) information we receive, and the assumptions / interpretations we make.

In the field of auditing we use data quality dimensions with respect to Information: completeness, correctness / accuracy, and timeliness. To a lesser extent there are other data quality dimensions like consistency, validity and relevance. These data quality dimensions also apply to the Truth. The Truth is based upon complete, correct, timely, relevant, consistent and valid data.

Finding the Truth may thus take a lifetime – or longer – and that would not serve the needs of many. Hence the ‘true and fair’ view opinion in auditing. The word ‘true’ comes awfully close to the word ‘truth’ but the ‘fair’ immediately undermines that assumption.

Looking for the Truth is also looking into a rearview mirror. Life goes on ahead of us. Finding the Truth is not always a blessing especially when it collides with your own truth. I do not even intend telling my version of the Truth to my kids. I have accepted the consequences of that decision for a long time. Sometimes it is better not knowing. Ignorance is bliss. Knowledge may be a burden.

The audit profession lives by definition in the past. Quite often they are criticised for applying hindsight knowledge to earlier (management) decisions. It can sometimes be difficult to accept the rather fundamental differences in roles while still looking at the same picture.

Some 20 years ago I visited one of my audit clients. One look at their draft financial statements was enough for me to realise there was a serious problem. The Work in Progress (WIP) balance sheet section – which had always been a (pre-invoiced) liability – had suddenly changed into an asset (to be invoiced). Some unusually high project completion factors supported that assertion. Management’s behaviour to my ongoing questions became more and more anxious and even hostile. I knew I was right but could not find the compelling evidence to support my claim. I advised the audit partner not to sign off. Several months later we were notified that management had been fired as they had requested for urgent loans as they could no longer hide the accumulated project losses. Cash is Truth.

Show Me The Money !!! (Cuba Gooding Jr. to Tom Cruise in Jerry Maguire, 1996)

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