Inspections are one of the most important procedures auditors conduct when collecting audit evidence. However, physically examining assets, especially property, can be time consuming.
If you are an auditor, how do you think you would like the idea of examining properties over your computer, on Google Earth?
A study-“Using Google Earth to conduct a neighborhood audit: Reliability of a virtual audit instrument”--published in 2010, assessed the reliability of a neighborhood audit instrument administered in Chicago using Google Street View by comparing “virtual” data to those obtained from an identical instrument administered “in-person.” The study found that a virtual audit instrument can provide reliable indicators of recreational facilities, the local food environment, and general land use.
Furthermore, Google Earth is currently being used in property tax assessment. Taking a town, New Gloucester, in Maine as an example, they made the tax maps available on Google Earth. Can we do the same for audit practices?
Inspired by the study and the property tax assessment practices, I decided to do a little experiment—using Google Earth to measure the area of Trump Taj Mahal in Atlantic City, N.J., and compare the result with the company’s public filing, to see if it is also a good idea to use the tool in audit practices.
Trump entertainment resorts’ last annual reports filed with the Securities and Exchange Commission were in 2012, for the fiscal ending Dec. 31, 2011. In order to have a more comparable result to the company’s filing, and minimize variances, I set my Google Earth back to December 2011. The tool immediately took me back four years, showing me what the property was like then.
Then, I opened up the Ruler tool, measured the width and length of the property showing on the map. I got 24.91 acres (3.46 * 7.20).
Although 0.41 (24.91-24.5) acres difference is not ideal, considering the limitations of the free version Google Earth I used, it is not bad either.
Drone? GoPro? In Audit.
As technology evolves, we have access to the technologies only available to governments and large companies 20 years ago. As technology evolves, if auditors start using Google Earth to examine property assets, then can they use a drone or a GoPro to observe companies’ personnel performance, and test companies’ internal control? If so, I don’t think many people would like the idea of being followed by a drone.
Trump Entertainment Resorts’ SEC filing can be found here.
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