A Strategic Winning Gambit in Auditing

By Cenen Herrera

Writing From Chico, CA, USA
10 September 2009 - Thursday

I had a work assignment in the city of Chico, CA from 8 September, Tuesday to 10 September, Thursday, 2009. According to Wikipedia, Chico is the most populous in Butte County, California, United States, the population of which is close to 100,000. Chico is home to both Chico State University and Bidwell Park, one of the country's 25 largest municipal parks and the 13th largest municipally-owned park. Our non-office location was in downtown Chico at the corner of Broadway and Fourth Streets.

Chico is about a three-hour drive from San Francisco, and the view across the counties was typified by a series of barren lands and a number of two-way streets. I could vividly recall that not so long ago, i.e., less than 10 years, I used to travel in similar two-way streets to Sogod, Southern Leyte, Philippines and Bulusan, Sorsogon also in the Philippines. With a background of folk songs on our way to Chico, it made my day-dreaming complete while I quietly sat as a passenger in the front seat of the car we used for the trip. One striking observation I had during this trip to Chico was that while cows roamed around the barren lands, carabaos took their place in the Philippines.

Noted business strategies Philip Kotler and John Caslione, in their book Chaotic, present an argument that the troubled times that challenge business today are not an aberration, but the new face of the normal. In fact, they said that the economic downturn is part of the Age of Turbulence, where both risk and opportunity are quickly felt around the world, now inexorably linked by globalism and technology. Further, both argued that it’s a world that chews up the unprepared, but rewards the prepared – those robust companies or individuals that have the ability to quickly anticipate and effectively respond to potential threats.

Against the background of the chaotic paradigm described in the preceding paragraph, the strategic gambit that allowed us to complete our audit work in Chico was mainly brought about by the following: (i) the leadership experience of my Audit Guru in hastily planning our work assignment, i.e, we barely had an hour to discuss the work assignment; (ii) using technology to the fullest, i.e., making use of existing software available in storing the client’s database and creatively producing analytical frameworks, and (iii) the use of professional audit templates that we have painstakingly developed prior to the engagement.

The lessons learned from our business trip to Chico could be summed up in one sentence: “Speed combined with technical experience and professional outlook, i.e. a combination of professional patience, positive attitude, and willingness to learn and accept change, could spell out the desired outcome in any audit engagement.” The bottom-line is to adopt a strategic winning gambit at the fastest time possible.

Chess and Linguistic Gambits in Finance

By Cenen Herrera

Writing from the City of Williams, Northern California

Linguistic gambits abound in the business world. They comprise of high-value sacrifices that produce the ultimate good for all stakeholders, i.e., tricky combination and winning lines. In the world of finance, a number of seemingly sophisticated financial planning tools exist and, in my view, they almost always carry a sense of linguistic gambit. For example, scenario planning and stress testing, simulation analysis and shock scenarios are common terms used in financial planning. These financial tools reveal that they are all based on assumptions about important variables that could have an impact on future results of operations. As such, the approach that an organization could adopt would vary widely in scope and breadth, e.g., use of simulation techniques. In addition, it could explore the use of simple smoothing techniques to multivariate statistics. The bottom-line in financial planning is to be able to adopt the appropriate combination and winning lines for the organization to maximize its stakeholders’ value.

Chess is my favored sport. I love to play chess because it improves my memory, and makes me better prepared to face the future. It is in playing chess that I was introduced to the word gambit. Webster defines gambit as a chess opening in which a player risks one or more pawns or a minor piece to gain a positional advantage. Playing chess makes me experience the rigors of how to plan best for the future, which I find very relevant to financial planning, accounting, and my new found love – auditing.

I find chess an indispensable tool for enhancing my financial planning, accounting and auditing skills.

Member:
DLS71, LSGH75 and DLSU79 NCAA Chess Team - Animo La Salle !!!