Comment Of The Day: “Comment Of The Day, From The Epic Commenter Donnybrook In This Week’s Open Forum”

The other primary combatant in the comment donnybrook referred to in the title (Humble Talent was the one noted in the previous COTD post) was Steve Witherspoon. In his Comment of the Day he references the crux of the dispute without actually referencing the dispute itself. His ever-green topic: the misuse of statistics:

Here is another reason that I dislike the use, or better yet the misuse/abuse, of statistics.

As we all likely know banks are routinely audited by outside sources to check for accuracy. Yesterday I got a piece of mail from a company that I’ve never done business with and I’ve never heard of. The mail was sent from a non local city that I wouldn’t be expecting mail from because I don’t know anyone who lives there and I don’t do business with any company from there. I opened it and found a single piece (3½” X 8½”) of paper with the printed logos from our local bank and the following statement on the top…

“Our Auditors have selected the following account for verification. Please review the information shown below and furnish details of any discrepancy to: [company name and address]. If information is correct, no action is needed.”

Then the paper included our home mortgage account number, interest rate, maturity date, and current balance as of a specific date that was mid month between payments. I read it a couple of times to confirm what I read, then I looked at my wife and said “These people are idiots.”

I checked and my bank confirmed that there was a audit in process and that the company that sent the mail to me was the auditing company.

This morning I sent the auditors the following email…

You sent us a form about your audit of ******* Bank asking us to verify our current mortgage balance as of 8/16/2019. Maybe you don’t realize, as a CPA you really should know, that people will not know the exact balance of their mortgage on any given date without calling the bank to get the balance. It’s a rare individual indeed that would have a daily mortgage amortization program since the first day of their mortgage that could accurately answer the question you posed. Asking what you asked requires the individual to either guess or call the bank you are auditing for the balance and BOTH of those options defeats the purpose of your auditing verification question.

I can tell you that the value of our mortgage is relatively close to the amount that you put on the questionnaire but I cannot confirm that it is correct.

Your question is simply not reasonable, and therefore not logical, for an average person to answer; as a CPA doing a bank audit you really should be able to do better.

Lastly; your questionnaire could potentially return a false sense of accuracy. With the amounts of junk mail that people receive, receiving a piece of mail from a completely unknown source will likely be thrown in the trash. Plus, your statement “If information is correct, no action is needed” actually inspires recipients to ignore it and you will interpret that lack of response as a confirmation of accuracy and you do not know that is in fact true. Your method of getting accurate information is terribly flawed.

So here we have what is essentially a statistical survey using predefined methodology that will interpret any lack of response as confirmation of accuracy. This is a complete failure in logic!!!

Over and over again we see that the results and the extrapolated interpretations of statistical data can be manipulated in many ways, both intentionally and unintentionally, but there are people that tell us that we must accept statistical data as actual “fact”.

47 thoughts on “Comment Of The Day: “Comment Of The Day, From The Epic Commenter Donnybrook In This Week’s Open Forum”

  1. A book I like to keep handy is “How to Lie with Statistics.” It is very useful for identifying muddy thinking, or where information may be hidden.

    -Jut

  2. I missed this. It’s wrong.

    Auditors send out those surveys, not just for banks, but for any company that deals in credit. The purpose of those letters is not to gauge account accuracy to the penny, it’s to test for the existence of the account. The auditor is trying to determine if the address is valid, and if you in fact have a loan vehicle with your bank. The test is to determine if the bank (or company) has created fraudulent revenue by dummying up transactions. If the auditor gets a certain threshold of RTS mail, or gets a single instance of “I don’t have a loan at that bank!” then they test those accounts further.

    i grant you that I’ve wondered if this is effective. There’s so much mail fraud floating around that I’ve wondered if a person confronted with a legitimate case of fraud wouldn’t just assume that the audit request was the fraud, because their details don’t match, and file it under “G”. I assume not, because the audit company usually has the kind of information that fraudsters are looking for and include enough in those letters for independent verification, but people are lazy and stupid. I’m really torn.

    Regardless. Your misunderstanding of the process does not mean that the process does not work.

    And it’s *amazing* how well those connotations parallel.

    • HT
      Steve said if the information is correct no action is needed. That would still result in not knowing if the account was valid if people ignore the request. It will be necessary to have the bank give people a heads up that the auditors may contact them to compare the balances they show to what consumers believe to be their balance.

      With a bit more time I could devise a blind response form that associates an encrypted value to a specific customer.
      Then list all products offered by the bank and ask for balances.

      No names or account numbers are on the form so even if scammers tried to wangle info from you using a similar process they fail to get any user ID info or account numbers.

      • First off, I can’t say this for certain without actually seeing the document Steve was given, but I would bet money that this was a reading comprehension problem. I sent out letters like that during my stint in public practice (don’t work in public practice), and am annually audited by an firm that sends them out. Again… Different firms use different forms, but I would be absolutely gobsmacked if they’re even close to as cryptic as Steve describes.

        On that note, it’s *AMAZING* how well the connotations are lining up.

        Regardless… But it works well enough that it is considered best practice by both the American and Canadian CPA designations and assorted auditing designations. Like I said, I question the effectiveness of the tests, but audit tests aren’t designed to check for absolute accuracy, it’s to look for trends. Comparing an audit to statistical gathering is comparing apples to oranges.

        • “First off, I can’t say this for certain without actually seeing the document Steve was given, but I would bet money that this was a reading comprehension problem.”

          I quoted it word-for-word, there is no reading comprehension issues here. Bite me HT.

          Here is a redacted photo of what I received in the mail.

          • Ok. Not a reading comprehension problem.

            I’ll actually mea culpa here, I forgot that Canadian banking is VERY different from American banking. We have 7 banks in all of Canada, maybe 200 credit unions, all of which are large and professional enough that you just wouldn’t see shit like that.

            On a completely related note…. Do you bank with a troll living under a bridge? Only mostly joking. I’m going to go out on a limb and say that the reason you’re blotting out the letterhead is because the bank is so small it would literally narrow down your location to the town you live in.

            • “I’m going to go out on a limb and say that the reason you’re blotting out the letterhead is because the bank is so small it would literally narrow down your location to the town you live in.”

              You make too many assumptions.

              I chose to redact because I didn’t think that the bank or the CPA deserved to be publicly smeared for this; I guessed it was basically a standard form document because I got another one for an account where I’m the treasurer of a corporation. In my view it would have been unethical to share the names of the business’ especially since the purpose of my comment wasn’t to smear them but to point out the flaws in their statistical methodology and flaws that will be inherent in the interpretation of statistical data.

              Humble Talent,
              It’s a reflection of your personal character, not mine, that you openly acknowledge your error(s) but you’re not willing to formally apologize for your biased smears that appeared to be partly because of your errors. Your choice, your consequence.

              • “The” CPA? Your entire bank is being audited by an individual?

                Don’t skate around it. There are 10,000 ma and pa banks in America, you don’t have to tell me which one, but I’d love for you to tell me how many communities it operates in. Is the number higher than “1”? If so, is that just because there’s a branch in the next town?

                As to the rest… I don’t think I have anything to apologize for. I know the nuance of it will escape you, but I will sleep perfectly well tonight living with every single one of my consequences.

                • It’s 100% irrelevant to this discussion but there are 4 different banks in my community and about 15 within 15 minutes.

                  “I don’t think I have anything to apologize for.”

                  That is a direct reflection of your character.

                    • You’re correct about what you asked, my bank is the largest one in town, it is only in this community. One other is very local, the other two are either state wide or mid-west chains. I choose to keep my money local.

                      I’m also correct that this is 100% irrelevant to the point of my comment, you’re deflecting and I’ve already explained why I redacted things. Take it or leave it, I just don’t give a damn what you think.

                      If you want to know where I like then be the stalker that you’ve accused others of and figure it out for yourself.

                      “You are officially back in the group of people I blatantly ignore, it’s a very exclusive club, the only other member being Alizia, because I respect my time more than to waste it on you.”

                      How about you keep your “promise” from now on.

                      I have real world things to get done this evening, I’m done arguing with you for today.
                      Cya.

                    • “YoU mAkE tOo MaNy AsSuMpTiOnS”.

                      It’s mostly irrelevant, but not 100%. See, I couldn’t conceive of a bank hiring an auditor that was quite that… I’m actually going to call it unprofessional… unless the bank was *really* small. The fact that others might be smaller isn’t a mitigation.

                      And I think that’s relevant because while you should be able to expect a certain amount of service nomatter where you go, and your (very admirable) goal of keeping it local notwithstanding, to some extent, this is like being surprised that the sandwich you paid twenty-three cents for in an alley has some broken glass in it.

                    • “And I think that’s relevant because while you should be able to expect a certain amount of service no matter where you go, and your (very admirable) goal of keeping it local notwithstanding, to some extent, this is like being surprised that the sandwich you paid twenty-three cents for in an alley has some broken glass in it.”

                      That sounds a little like you have something against smaller banks and smaller CPA firms. They are professionals and I expect the same service out of every one of them regardless of their size.

                      FYI: I forwarded the message I had sent the CPA firm to the bank today after I talked to someone at the bank yesterday afternoon.

                    • Absolutely. The smaller the firm, the more extreme their relative services can be. There are small firms that operate best in the market, and then there’s the guy that makes you think CPAs get their designations out of cereal boxes, kind of like the guy that sent you that letter.

                      And of course you did.

                    • I wrote, “my bank is the largest one in town, it is only in this community. “

                      I need to correct that.

                      My bank is part of a larger group of banks across the state, all of which retain their local identities but I can walk in to any of them and do my banking as if I’m in my home town. This changed around 10 years ago and I’d completely forgotten about it until today when I was sending the email I mentioned a few minuets ago. I probably forgot about it because it’s a service that I’ll likely never use.

                • ““The” CPA? Your entire bank is being audited by an individual?”

                  I could have phrased that better. It’s a full-service Certified Public Accounting firm licensed in multiple mid-west states. They have sixteen CPA’s on staff so it’s not a huge firm.

              • Steve Witherspoon:

                “You make too many assumptions.”

                Contrast this:

                “I quoted it word-for-word, there is no reading comprehension issues here. Bite me HT.”

                Bitch, bitch, bitch.

                You complain that he makes too many presumptions, but when he says he needs to see the document itself, you piss and moan because you quoted it word for word.

                How the hell, pray tell, Steve Witherspoon, if that is your real name, would he know that, without making an assumption?

                Do you want him to make assumptions or not? Or do you want to have it both ways?

                For me, I NEVER opine about a document I have not seen, and I get phone calls like that all the time. And, often, sight unseen, I know a document better than someone who has it sitting in front of it. If someone calls me up about a lease, I can navigate my way through it by telling them what I am looking for and letting them find it. But, I will always say that I need to see it before giving any definitive opinion about it.

                Humble Talent’s Disclaimer was TOTALLY and COMPLETELY appropriate (and you know I mean it because it’s capitalized). You’re just upset because you have a beef with Humble Talent.

                Quit being a baby. (And, no, I am not going to apologize for that slanderous smear, even though you’re not a baby; we all know you are a grown man; I’m speaking metaphorically and everyone knows it, including you).

                -Jut

                P.S. Jack, feel free to delete, if you deem appropriate, but I think Steve Witherspoon has been unfair to Humble Talent and that has spilled over here. Humble Talent’s position was reasonable, and Steve Witherspoon acted like a jerk.

                • Oooops! I said presumptions when it should have said assumptions.

                  The reason: if he was doing anything, he was probably presuming, instead of assuming, but I wanted to go with the lingo in the comment.

                  And, screwed that up! Way to go, Jut!

                  -Jut

                • “You complain that he makes too many [assumptions], but when he says he needs to see the document itself, you piss and moan because you quoted it word for word.”

                  No dumbass, I didn’t piss an moan because he wanted to see the document (which I gladly provided the exact same photo that I had already provided earlier in the other thread) I “bitched” because he allowed his bias to make him stupid and jumped to this unsupportable assumption “I would bet money that this was a reading comprehension problem” to smear me. The fact remains that I did quote what the paper said word-for-word, I properly presented it as a quote, and I backed up what I wrote with a photo so biased people couldn’t make false claims about what I wrote. Get your facts straight Jut, you’re looking a bit foolish.

                  “How the hell, pray tell, Steve Witherspoon, if that is your real name, would he know that, without making an assumption?”

                  Yes it’s my real name and my real photo; is there any other of your petty insinuations you want me to deal with?

                  Here’s a fact for you Jut; the original photo of the document was provided in the original thread six hours and forty-seven minutes earlier than HT’s comment, I posted it fourteen minutes after my original post, that’s how long it took me to photo the document, redact the document, crop the document, and post the photos. I’ve done my due diligence. HT’s ignorance of the existence of the photo in the previous thread is no excuse for making up biased based false smears.

                  “Do you want him to make assumptions or not?”

                  I don’t want anyone to make assumptions on such things, that’s exactly why I provided the original photo as fast as I could after I posted the original comment. Again; ignorance is no excuse for making up biased based false smears.

                  “Humble Talent’s Disclaimer was TOTALLY and COMPLETELY appropriate…”

                  Again; I have no problem with him wanting to see what I had already provided, I had a problem with his bias based false smear.

                  “You’re just upset because you have a beef with Humble Talent.”

                  I’m upset? What are you extrapolating that little opinion from? Upset, nope. Am I being hard on Humble Talent, sure.

                  “Quit being a baby. (And, no, I am not going to apologize for that slanderous smear, even though you’re not a baby; we all know you are a grown man; I’m speaking metaphorically and everyone knows it, including you).”

                  You’re welcome to your opinion even when you choose to express it in childish ways.

                  “Jack, feel free to delete, if you deem appropriate”

                  No reason to delete the comment.

                  “I think Steve Witherspoon has been unfair to Humble Talent…”

                  I’m being unfair to Humble Talent? Wow, that’s quite an opinion. You’re welcome to your own opinion but you should reread both threads, I think your viewing this from a terribly biased position.

                  “Humble Talent’s position was reasonable, and Steve Witherspoon acted like a jerk.”

                  HT is reasonable and I’m a jerk? Wow, that’s quite an opinion. Again; you’re welcome to your own opinion but you should reread both threads, I think your viewing this from a terribly biased position.

                  • To be fair to me, the picture of that letter wasn’t in the series of comments on *this* page, I think it’s particularly whiney to complain that I didn’t scour the entire website for something that I didn’t know existed.

                    • “To be fair to me, the picture of that letter wasn’t in the series of comments on *this* page, I think it’s particularly whiney to complain that I didn’t scour the entire website for something that I didn’t know existed.”

                      I didn’t “complain that [you] didn’t scour the entire website for something that [you] didn’t know existed”. You’re reading things between the lines that don’t exist.

                      Please read all of what I wrote above, I was fair with you.

                      I’ll quote myself so you don’t have to trudge through comments…

                      I have no problem with [Humble Talent] wanting to see what I had already provided, I had a problem with his bias based false smear.

                      If you don’t think that was being fair to you then you’re being unreasonable.

                      Ignorance and bias are no excuses for making up biased based false smears. You’ve even resorted to posting unsupportable smears as if they are facts. But of course “[you] don’t think [you] have anything to apologize for”, those are your choices.

                      I was expecting for a little more integrity from you; was I wrong to expect that from you?

          • You make a good point, if I understand correctly: they should do a better job explaining just what they are doing. Without a clear explanation what they are attempting can’t be understood.

            How did you upload that jpeg?

              • Well, it might be worth the trouble as I’ll be able to illustrate my posts with illustrations from ancient alchemical texts and depending on mood statistical charts & graphs.

                No flowered borders though, nor gifs ….

        • “audit tests aren’t designed to check for absolute accuracy, it’s to look for trends. Comparing an audit to statistical gathering is comparing apples to oranges.”

          It’s hard to believe that you wrote that.

          The purpose of statistics is to find trends within a representative sample, that is exactly what you described.

          Maybe you should reread what you write before you post it especially if your commenting on something I wrote because you clearly have a bias and you know what they say around these parts about bias.

          • You don’t know what you’re talking about, and I’m probably not the right person to explain it to you.

            An audit is almost the inverse of a Statistic… Good statistic gathering is asking a question and correlating the data. Good auditing is making assumptions and attempting to find data that reinforces the assumption by figuring out which questions to ask.

            For example… Auditors don’t even pretend to pick samples randomly. If you have 1000 loan vehicles, and 995 are worth less than $100,000 combined, and the other 5 are worth $1,000,000 each, the’ll test all five of those large loans and maybe another five randomly, because bigger numbers are more important. If you were only trying to get a statistical analysis of account accuracy, it wouldn’t matter how large the accounts were.

            “Trends” in that context isn’t necessarily about data accuracy… Auditing has a little more… Je ne sais quoi than your average accounting job. While I’m sure that an auditor will test more in cases where they’re finding a whole lot of mistakes, but they’ll also spend longer testing ledgers of organizations they perceive as being sloppy, or loose with their controls, even if their records are mostly accurate. That’s because part of giving an opinion is a statement that they believe the financial statements are materially accurate, and frankly, they need more convincing if your books are hard to trudge through.

            And frankly, you don’t have to take my word for it. Do some research! I suppose it’s technically possible that the entire CPA association is wrong and you, the great Steve Witherspoon, is right… but I have my doubts.

        • Quote 1…

          “Your misunderstanding of the process does not mean that the process does not work.”

          Quotes 2, 3 & 4…

          “I can’t say this for certain without actually seeing the document Steve was given, but I would bet money that this was a reading comprehension problem…. I would be absolutely gobsmacked if they’re even close to as cryptic as Steve describes.

          On that note, it’s *AMAZING* how well the connotations are lining up.”

          Humble Talent,
          Consider using the information found in this for your next comment to me.
          Steve

        • I fully understand that the purpose of this type of audit is not to compare bank values to what the consumer believes are their balances. The point that I was trying to make is that if you are trying to find out if the bank is trying to boost its asset base by carrying non-performing loans on the books then the debtors may be inclined to ignore any communications from the lender. If no action signifies a correct balance then all ignored communications are treated as correct.

          I have no idea about Canadian methods but I have seen similar forms you described here on the US. I thought they were for other purposes and ignored them.

          But I think this example does not do Steve’s argument justice. I think his larger point is poorly designed studies yield poorly understood numerical data that leads to inaccurate correlations and when the data is extrapolated to a larger population the poor understanding of data from the sample leads to conclusions that are monsterously wrong.

      • Agreed. Audit firms employed by banks that aren’t headquartered under moderately sized rocks communicate better than with what Steve was given. After seeing what he was given, I almost understand where he was coming from… That was a joke.

        That said… He still had no idea what he was talking about. Being right about the vagueness of the form does not change the intention of it. That’s not his fault, he doesn’t have the background for it and wasn’t given much help… But at the end of the day, those slips will still get the job done, most of the job is done by the envelope, the audit firm just gave themselves a whole lot more trouble in compiling the results than they had to, probably to save 2/3 the paper costs and because they enjoy abuse. Instead of trying to understand what was going on though, Steve made an assumption, assumed what they were doing was stupid, and then told the world that those other people are idiots. Meanwhile, while the form was less than adequate, it’s an internationally recognized audit tool. This was a very Steve thing to do. And that might seem a little Pot/Kettle-y of me, but frankly, I understand the process, and I’ve been dealing with Steve long enough to know he’s an idiot, I think I have a certain amount of standing.

        • Humble Talent wrote, “I’ve been dealing with Steve long enough to know he’s an idiot” Bold mine.

          I think this statement is signature significant.

          Doesn’t using the word “know” in that context make that a statement of unsupportable fact? You actually “know” nothing of the sort.

    • Congratulations. How many COTD have you gotten so far?

      I’ve got two. Or, well, 1-1/2. Or perhaps 1-1/8th. OK, let’s just say I’ve got one.

      But if there was an anti-COTD category . . . . 🙂

      • That’s right! You were the antagonist someone’s COTD was protagonizing, right? That’s a difficult thing to pull off. I need to somehow become more outrageous to quench this envy.

        • [My infamy essentially began here.

          My essential view has not changed: it is my view that homosexuality should not be encouraged and that it is best repressed. But, given that we are in an enlightened phase, it should not be brutally repressed.

          I still hold to the essence of Catholic/Christian doctrine, my primary influence in respect to sexuality. Presently, *my side* is losing badly. But my view is that just because that is so it does not mean that at a philosophic level the argument is not sound.

          My participation in that thread has led me further into research on the general and universal effects of ‘hyper-liberalism’. It is very interesting to subject oneself, or to be subjected tom the full weight of liberalized opinion. I might have modified some of my positions but they have not changed substantially.]

          • Hah! We’re usually somewhere on the same page or at least chapter, opinion-wise, but your performance in that thread leaves me nothing to quibble. Every counterargument you faced was rooted in the old gayness-as-state-of-being canard which has been killed and was on its last legs even in 2017.

            https://science.sciencemag.org/content/365/6456/eaat7693

            It’s a shame I was only a casual reader then and missed the fracas. I could have my very own handlebar mustache. Yes, I’m more jealous now than before!

        • Oh Heavens, it is, it really is!

          Gosh but you really need to do some critical introspection!

          I must destroy all my enemies and gather accolades while doing it.

          It has gotten me into trouble and out of it at the same time!

          What is your modus operandi?

    • Steve, this letter and an attempt to gather statistical data have nothing, I say again NOTHING in common. There are three types of statistics: 1) Descriptive, which attempt simply to describe a phenomena without assigning either cause or relationship; 2) Causal, which attempts to assign a probability of an event happening by chance (and, if the research is properly designed, assign a cause to the event); 3) Relational (which excludes anything like causality), which is what correlations are. There is, for instance, a .4 correlation between eating hot dogs as a kid and developing leukemia as an adult. There is also a .4 correlation between annual rainfall in Calcutta and the crime rate in New York City. Thus, it should be obvious that you cannot PROVE or DISPROVE anything with statistics, when properly used and reported. If anything, your letter MIGHT be a poll (which would it in the descriptive category), but if that is the case, it was poorly thought out, poorly done and, basically useless to an auditor.Therefore, I see no problem with your e-mail.

      • “Steve, this letter and an attempt to gather statistical data have nothing, I say again NOTHING in common.”

        The process they are going through is clearly a sample survey or poll, whatever we choose to call it, and it the process they are going through looks a lot like a statistical survey.

        Statistics is the science or discipline of collecting, organizing, and interpreting data. To do this you:
        1. Formulate the goals/objectives of the statistical survey
        2. Select survey representative sample size
        3. Design survey form
        4. Collect statistical data
        5. Analyze the data
        6. Disseminate the data and conclusions.

        I could be wrong but I just don’t see any difference.

        • Absolutely agree. Looking at the form, I’m having a lot of trouble figuring out what data they are trying to collect. I’ll be real honest with you, you have about ten times my patience level. That form’s first last and only stop had I received it, would have been my trash can.

          • “That form’s first last and only stop had I received it, would have been my trash can.”

            It would have been round filed by me too had I not received one for a personal account and one for a corporation account in the same stack of mail, I might not have even opened it.

            I still get plenty of junk mail and most of it goes straight in the round file unopened but yet I can’t get the postal delivery people to deliver things like bills to my home instead of one of my neighbors. I’ve heard about it from people all over town, I’ve even sent a message to the postmaster general. Our postal service has gone straight down the shitter in the last 5-10 years, I’ve had at least a dozen personal conversations with our local postmaster that seems to change every couple of years; they can’t even put package notifications slips in the correct Post Office box for work and we don’t know that things have been delivered until we notice that it’s not here when it’s supposed to be.

    • Thanks for the link Jeannelle, it was an interesting read.

      The invasive tentacles of modern day social justice warriors trying to control our society with their brand of fascist intimidation is growing.

      “First they came for the Socialists, and I did not speak out because I was not a Socialist.
      Then they came for the Trade Unionists, and I did not speak out because I was not a Trade Unionist.
      Then they came for the Jews, and I did not speak out because I was not a Jew.
      Then they came for me and there was no one left to speak for me.”

      Martin Niemöller

  3. To the original point which started as a critique of the simple audit letter……the technique was good enough to expose the fraudulent loans taken out of our smaller closely held bank by the chief loan officer. He did serious prison time then for stealing several million. He was an addicted to betting on sports which just became legal in Iowa. He was good enough in picking winners but they said he couldn’t win often enough to cover the bookies “juice”.

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