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​Active Work and Engaged Listening​

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It being Friday, and knowing that everyone is loo​king for something a little more fun, let’s start today with some puzzles. Don’t worry, these aren’t hard. It’s not like I’m going to ask you to multiply 193 times 537 in your head. (By the way, the answer is 103,641. And, yes, I used a calculator.)

The following puzzles (as well as the ensuing discussion) have been adapted from the book,​ Thinking, Fast and Slow by Daniel Kahneman. The book is a fascinating investigation into the way we think, digging into the impact of how our fast, intuitive, and emotional thinking works with (and against) our slower, more deliberative, and more logical thinking.

So, let’s start doing puzzles. Number one:

A bat and ball cost $1.10.

The bat costs one dollar more than the ball.

How much does the ball cost?

Quick, What’s your answer?

With a 99.99% certainty, I will say that the first number that came to mind (even if you corrected it quickly enough to pretend that you immediately snapped to the correct answer) was 10 cents. The answer is intuitive, appealing, and wrong. Some quick math shows why. If the ball is 10 cents, the bat is one dollar more – $1.10 – resulting in a total of $1.20. And that is not equal to $1.10. No, the correct answer is five cents.

Let’s try a little practice with logic. Does the final conclusion below follow from the premise?

All roses are flowers.

Some flowers fade quickly.

Therefore, some roses fade quickly.

Take a second. Come up with your answer. And…..time’s up.

If you were like me, you determined that the conclusion was valid. However, if that is what you concluded, then, just like me, you were wrong. Given that only some flowers fade quickly, there is no guarantee that roses are among the flowers that fade quickly.

Finally, answer the following question quickly before reading on.

How many murders occur in the state of Michigan in one year?

I don’t have the answer for this one. (You can look it up and see how you did.) But the point is that researchers found people generally underestimate the total because they forget that the city of Detroit — a city that would significantly impact crime statistics — is part of Michigan.

Yes, everyone (almost) knows Detroit is in Michigan. And everyone knows that Detroit has the same crime issues as most big cities. But, in making a quick estimate, people do not always put those two facts together.

Now, there is a lot going on with these examples. And one of the big ones is that there were no significant stakes involved in getting these answers right or wrong. So, coming up with the quick, easy, wrong answer is a common result. (However, it should be noted that, even if you took a little more time after you came up with your wrong answer, you might still come up with the same wrong answer. We human beings tend to want to prove ourselves right, not wrong. For more information, look up Confirmation Bias.)

It is not that we cannot figure these out if we have the time. It is that, in given situations, we turn “lazy.” Note that, in this connotation, lazy is not necessarily a bad thing. There are just certain situations (reading this blog, for instance) where hard-work thinking is not necessarily required.

But the thing to keep in mind is that, when we are knee-deep in audit work we can get tired. And when we get tired, it is very easy to start using “lazy” (for lack of a better word) thinking.

One of the best examples I can think of is interviewing. It seems that it is easy to build breaks in activities such as testing, report writing, and reading procedures. But interviews can suddenly take on a life of their own. The interview scheduled for one hour is taking two, and there are more interviews stacked up after this one because it was the only chance you had to talk with those individuals, and at least one of those people is actively stonewalling the audit, and another is the key participant for a key control.

Successful interviewing requires active listening — a process that requires the listener to fully concentrate, understand, respond, and then remember what is said. (This is another topic that, if you want more information, take a look on the internet where explanations can be found behind every corner. Also, feel free to contact me and I can point you a couple of directions.) In his book, Kahneman calls this “engaged” listening, and notes, “They are more alert, more intellectually active, less willing to be satisfied with superficially attractive answers, more skeptical about their intuitions."

Of course, we should be paying attention. And, of course we have to do our best to do our best work. But, what kind of difference can it make?

We’ll get back into this all next Friday. At that time, I’ll give you an example of just how big a deal this can all be, how it impacts our audit work, and what we might be able to do.​

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