TICK MARKS: THEAUDITORS'

ANCIENT YETMODERN TOOL

by

Donald L. Ariail*Southern Polytechnic State University

Roger K. Wolff

Hugh P. HughesGeorgia State University

*Corresponding author

December 24, 2013

At an American Accounting Associa-tion conference, the lead author wasgiven a free copy of the HoughtonMifflin Brief Accounting Dictionary(2000). A few weeks later, he was pre-paring to present to his auditing classthe Whittington and Pany (2008)chapter on the preparation of auditwork papers. In discussing the audi-tor's need to note the verification pro-cedures that were followed, this textstates that:

As working papers are prepared,the auditors will use several dif-ferent symbols to identify specificsteps in the work performed.These symbols, or tick marks, pro-vide a concise means of indicatingthe audit procedures applied toparticular amounts. Whenever tickmarks are employed, they must beaccompanied by a legend explain-ing their meaning" (p. 164).

After reminiscing on the personalizedaudit tick marks the lead author hadused during his many years in publicpractice, he checked the Brief Ac-counting Dictionary for a formal defi-nition. Surprisingly, this term was notdefined. A perusal of the indexes ofthree additional auditing textbooksfound a reference to tick marks in thework by Knechel, Salterio and Ballou(2007) but not in the works by Ritten-berg, Schwieger and Johnson (2008)and Louwers, Ramsay, Sinason andStrawser (2008). Is the accountinglexicon losing this term? Is the prac-tice of using tick marks dying?

Tick marks have a long history ofaccounting usage. According to Ken-neth S. Most writing in the May 9,1959 issue of The Accountant, docu-ments prepared by ancient Babylo-nian scribes "... reveal tiny marks,dots, ticks and circles at the side ofthe figures, indicating that checkinghad been performed." A brief reviewof early 20th Century auditing textsfinds the suggested use of marks ofaudit verification. These audit sym-bols are variously identified as "tickmarks" or "personal check-marks."For instance, the 1926 edition of Au-diting Practices by Bennett andProuty states that "a personal check-mark should be adopted for checkingpostings and amounts that have beenverified" (p. 13). The use of checkmarks in the vouching of accountspayables is recommended by Casten-holz in his 1919 Auditing Proceduretext: "The voucher, with its bills at-

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tached, should first be compared withthe voucher register entry ..., and acheck mark in colored pencil shouldbe made to the right of theamount" (p. 156). He also suggeststhe use of a combination "tick" toindicate the performance of morethan one procedure: "... as for exam-ple 'vc,' the 'v' representing voucherexamined and the 'c,' check com-pared with voucher" (p. 157). In ad-dition, Castenholz suggests that, inthe checking of general ledger post-ings, following a procedure of tickingfrom ledger postings to source docu-ments may limit "... the danger ofthe office force tampering with theauditor's ticks or of ticking amountsnot examined" (p. 192). In Audit Ob-jectives and Procedures, ArthurAnderson & Co. (1961) outlined thepurpose of the tick mark as "to con-serve space and time, tick marks aregenerally used throughout auditworking papers where a repetitiveaudit step is performed ..." (p. 127).

Today, the trend in the use of tickmarks seems to be towards using alimited number of marks and awayfrom using personalized tick marksand from having a standardized li-brary of firm specific tick marks. Ac-cording to Christopher Rouse, CPA(2013), "if you are using more than 3or 4 tick marks you may want to re-design your work papers." The cur-rent trend in usage is the result oftechnological innovations. In thepast, audit programs often lackeddetailed instructions and thus much

discretion was given to the auditor indeciding which procedures wereneeded. With the advent of computer-ized software programs that generatedetailed audit checklists, the proce-dures to be performed are specified.Therefore, tick mark usage is oftenrestricted to indicating (with a limitednumber of digitally available tickmarks) that a proscribed procedurehas been performed (Wuester, 2008)and the conditions found (UNC,1997).

Reviewing the tick mark usage of thepast brought to mind the followingincident that the lead author witnessedas a young staff accountant in the1970s: He had accompanied Steve, apartner, and Jim, a per diem CPA, onan audit of a small private universitylocated several hundred miles fromthe firm's office. Steve was a highstrung individual; known for having atemper and dramatic mood swings.Jim had worked off and on for thefirm for a number of years and wasconsidered to be a meticulous andknowledgeable accountant. His drink-ing problem had, however, kept himin a per diem status allowing the firmto dismiss him while he was on abinge and then rehiring him once hewas back on the wagon. Thus, Jimhad established a small clientele of hisown that allowed him to be somewhatindependent of the firm. With his laidback though temperamental and obsti-nate disposition, Jim did not respondwell to Steve's management style ofintimidation.

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All three of us traveled together inthe partner's vehicle. Once we ar-rived, Steve left us to vouch a stackof documents while he met with thecollege president. After severalhours, he returned to check on ourprogress. He first looked at the workthe author had done, and said that itlooked fine and to proceed. He thenwent over to check on what Jim hadaccomplished. By that time Jim hadvouched a large number of docu-ments. Suddenly, Steve yelled,"What the " " is that tick markyou've used?" Jim had indicated theagreement of each document with thebooked amount with a notation of"ok." Steve forcefully told him toimmediately change all the "oks" toan appropriate tick mark. Withoututtering a word in reply, Jim pro-ceeded to work on changing the nota-tions.

A few hours later, Steve returned toagain check on our progress. As be-fore, he gave his approval to the au-thor's work and then proceeded toJim's desk. A loud outcry followed:"What in the " " have you nowdone? I told you to use an appropriatetick mark!" Jim had indeed changedeach of his original tick marks. Each"ok" had been changed to "okeedokee." Jim was fired on the spot andhad to catch a Greyhound Bus backhome. A few weeks latter he was re-hired by the other partners in the firmwho were well aware of Steve's tem-per but in need of this CPA's tax sea-son assistance. The moral of the story

The Accounting Historians Notebook, April 2014

is to always use an appropriate tickmark: whether a standard firm tick,software tick, or personalized tick,the audit procedure related to thesymbol should be fully explained in awork paper legend.

For today's auditor, the practice ofusing tick marks is alive but altered inpurpose - a purpose that, in this digi-tal age, is readily served by a limitednumber of software specific markswithin the auditing software (Bragg,2013). While the move from manualto computerized accounting and audit-ing has revolutionized the methodolo-gies of the accounting profession, thisparadigm shift has also resulted in aloss in the common usage of termslike "tick marks" and thus haschanged, or is changing, the lexiconof accounting. For example, anecdo-tal evidence indicates that most upperlevel accounting students are not fa-miliar with the term "tick mark."

As accounting educators and histori-ans, the authors suggest that we needto play an active role in preserving thelexicon of the profession which is anintegral part of our accounting cul-ture. We contend that the accountingpedagogy of exposing students to the"roots of accounting" should includeteaching the historical language of theprofession.

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(Continuedfrom page 17)REFERENCES

Arthur Andersen, Audit Objectives and Procedures, Second Edition (1961).Bennet, R.J. & Prouty, K. (1926). Auditing Practices. Institute of Business Science.

International Textbook Company, Scranton, PA.Bragg, Steven, (January 2013). What are audit tick marks? Accounting Tools, retrieved

from http://\v\y\v.accountingtQols.,CQjii/question$-and-Mi(svvers/what-are-aiidit-.tjck-niarks.htrnl.

Castenholz, W.B. (1919). Auditing Procedure. LaSalle Extension University, Chicago,IL.

Houghton Mifflin Brief Accounting Dictionary (2000). Houghton Mifflin Company,Boston, MA.

Knechel, W.R., Salterio, S.E. & Ballou, B. (2007). Auditing: Assurance & Risk.Thompson South-Western, Thompson Higher Education, Mason, OH.

Louwers, T.J., Ramsay, R.J., Sinason, D.H. & Strawser, J.R. (2008). Auditing & As-surance Services. McGraw-Hill/Irwin, The McGraw-Hill Companies, Inc., NewYork, NY.

Most, K.S. (1959). Accounting by the ancients. The Accountant, (May) 563-566.Rittenberg, L.E., Schwieger, B.J. & Johnstone, K.M. (2008). Auditing: A Business Risk

Approach, 6th Edition. Thomson South-Western, Thompson Higher Education,Mason, OH.

Rouse, C. (2013). Telephone interview on February 27, 2013 with Christopher Rouse,partner, Windham Brannon, Certified Public Accountants, Atlanta, GA.

Whittington, O.R. & Pany, K. (2008). Principles of Auditing & Other Assurance Ser-vices, Sixteenth Edition. McGraw-Hill Irwin, New York, NY.

Wueste, Brian, (December 2008) Producing Quality Workpapers, Internal Auditor, re-trieved from http://vv\vw.theiia.org/intAuclitor/back-to-basics/2()()9/producing-qualiiy-vvorkpapers/.

University of North Carolina at Chapel Hill, Internal Audit Department (1997). InternalAudit Policies and Procedures, Chapter 15 - Working Paper Documentation ef-fective March 24, 1997, Chapel Hill, NC. Retrieved from http://wvvw.unc.edu/depts/intaudii/AuditMan/WorkinK%20Papei%20DQCUfflentation,htrnl.

Where Can I Find the Items Mentioned in theNotebook?

To view items mentioned in this Notebook visit the Academy website at http://aahhq.org and:

1. Hover over Publications;2. Hover over Notebook; and3. Click on "Mentioned in the Notebook".

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