Joseph Kassapis International Assurance Expert 20 ‘THE SPECIALIST IS THE GENERALIST: Everythings best viewed as Part of a Whole: Auditors are taughtthat the way to form an opinion on a set of Financial, Statements is - in a sense - to avoid looking at them, to defer doing so, leave it last. rst look at the entity's external environment, then inside the entity at the ternal environment surrounding the system that produces the FS, then at that, system generating them (the "Control System"), and, LAST, the ‘substance! itself: the FS. Top Down approach. A concept of universal application. Control Theory holds that Control Systems are built top down, from the highest, most general, component, the Control Environment (Control culture), to the lowest, most. specific one, the Control Activities (Passwords, locks, ... Fraud Theory wants Fraud Examiners interviewing from the most remotely involved to the most closely implicated; and each interview to proceed from the general questions to the specific. incorporate their Control model into a broader Risk Framework. Joseph Kassapis When the Control Framework of COSO, theRisk/Control 2 “* 4D suv cxganization, proveda spectacularsuccess, it occurredto them that cee Sei re cae ea are Pere areca except by reference to Objectives: Objecives face potential obstacles called Risks, which are overcome by actions celled Controls;they proceeded to incorporate their Control model into broader Risk Framework, The F8l hunting for @ serial liller assesses cuspects by looking atthe bockground that shaped them. A headmaster ata filing school tries to understand its pupils and produce solutions by refering backo their social background. One of thefirstquestionsin the mind of anxious parents ontheirdaughterfirst oresenting to them a prospective husband is the young man’s own parents,as a critical part of their sackground. Atypical question in the Certified Internel Auditor exam asks if Bonuses are part of the Control System (Yes! - everythingin anentity is only thereto help achieve its Objectives: Control's definiticn!), end ifthey should be ‘audited in isolation or as part of the overall remuneration system (The letter-an integral approach . Q} fossnh Kasspis Everythings better anderstond asPariofabiggr Whole, 2w ~~ $€F) Everything should preferably be studied, audited, examined, as Part ota Whole, The integrated approach. Top Down, The mast important aspect of Anything isits place in its Whole, its interconnections & interrelationships with Everything else. s an educator & trainer of professionals the last 2 decades | have gradually reduced the key principles underlying my epproach to a smaller and smaller set of cardinal concepts. taught ‘everything thet flies’ including whole CPA, CMA, CIA and CFE courses, and much of the CFA, ACCAand CA content, and much mare - and such isthe extant to which | distilled the core elements out of the apparently diverse knowledge incorporated in ‘these business qualifications’ vast combined body of knowledge, that | am hardly aware of what itis | am teaching and feel | say largely the same things whatever | teach. Featuring prominently among these very few remaining, fundamental truths, is the one | presented above: Everything is better studied as Part of Whole. ike Reply | 1Like3 Joseph Kassapis "Top-Down Approach”: As much as | tried te stress the ‘fundamentality’of theidea | could neverhave done justice toit:too important for any erguments to suffice to demonstrate itadequately. In fact o important that, in the end, it can be considered ...un-important, obvious, elf evident 9 tautology; 93 mearing nothing other/more than the humble, simple First Things rst expression; that we should deal with the FIRST fist, the most important first, and move down towardsthe east important. Allactivty, eg. of humans & human organisations, must start ‘rom Objectives- the setting of Objectives. Making Onjectivesthe citical background agoinst which to consider all enauing activity. (Objectives ——> Risks impeding them ==> Controls promoting them |by resolving Risks) is @ ‘fundamental epplication ofthe neuclear-therefore'self-evident’, and in that sense un-important- Top-Down concept. So important, then, so intuitive end natural, so all-pervasive, that it ends up being un-important, taken for granted; 93 referring to nothing other than CONTENT, the obvious significance of CONTEXT: things mustbe considered in context; to understand arything, nat torisk to misunderstand i, it must be exemined initscontext. Like Reply Joseph Kassapis CONTEXT: greet word. All of us non-native English ‘speekersshould have itin our vocabulary. Meanings given by context, and is missing withoutit. Contest is what would make the difference, after hearing "X killed Y", between "X killed Y because Y tried to kill” & "Xhilled Yto rob him"sor after “It rained today”, between "It rained today for the 1st time in 100 y's" and "Itrained today for the LOcth day ina row”. Facts & figures quoted outof stories told without C, concepts & topics taught without C, arenot sufficiently understood, or even dangerously misunderstocd ... The true expert embeds the object ofhis expertise in C: he deepens his presentation of it backwards/upwards, projects it forwards/downwards, and extends itsideways. A purely imward (CONTEXT- LESS) lockis boring a9 well 20 fraught with the rieleof losing touch with the environment, and suggestive of the ultimate defectin the 'expert''s ‘expertise: ignorance of the subject-matter's big questions: WHY, HOW, HOW. ‘COME, WHAT IF, SO WHAT IF, WHO CARES/SHOULD CARE, .. In teaching, the acid test for distinguishing Generalist Specialist from Specialist-Specialist je getting the “epacialict” instructor ta teach something outside his area of specialism. Joseph Kassapis Even the process of "specialising" is but one clear ‘pplication of the TD concept: In medicne a GP (General Practitioner first, then 2 Specialist. So first the General. And foremost. And first forever. The whole point in specialising is to doit without losing touch with the General, the Overall, the Big Picture. The Big Questions listed above, With WHY at the top. The purpose. The most important thingabout any-thing is: WHY... ! Fromthe most profound (existential questions: Why do we Exist?) tothe most parochial... (Why do this Task). The Because to the Why, of any-thing, does not Exist within the thing but entirely without it, inthe restof the Universe, the Whole of it, within itsinterconnections and interactions that make the Whole's Big Picture out ofits Parts... "Experts", including in teaching/training, looking for the secrets & the truths in the depths of the detailed make up oftheir Part, rather than serossits interfeces with the Whole, are anything but experts... ay on a a3 Joseph Kassapis By way of practical edvice to thoseon the receiving end of ‘education, students should also acquire/accumulate knowledge the Top Down wey; except that Top is Bottom (& Bottom is Top): Roots first, trunk next, then thick branches, thin branches, &leaves last. TREE OF KNOWLEDGE. The acquisition of K should be 2 TD process of construction of the TOK from the bottom up ! (TD in the sense of starting from the most IMPORTANT, bottom in the sense of depicting the most INPORTANT as the ROOTS supporting the whole edifice). When @ new piece of Ks offered you, refuse to accept it unless you have considered & seen exactly where in your ‘existing TOK it fits. Exactly what its Part willbe in the Whole, What its inter- connections & inter-relationships are with the Rest Of the Whole. Only then willit truly beK. Value-Adding, a: opposed to Value-detracting, K. Without that pre-requisite ofthe TOX fit, it willbe meaningless data flosting about Un-ettached, bound to soon be wiped out from yourmemory (having done yyouno good end much harm ....Only new information with understood ‘connections to pre-existing K, with a known place inthe TOK, will ever become K, onthat TOK. Joseph Kassapis Teachers too, (who need to acquire the Knowledge before they can impart it), hould very much employ the Tree-OF Knowledge method of applying the Top-Down approach in accumulating their expert Knowledge. In fact the master-teacher' - say inthe Business/Finance field - is the teacher who largely abolishes hard borders between the various topics comprising the wider field and is able to travel across these borders effortlessly whichever particular topiche isteachingat the time, making ‘lear the significance to the Whole of the particular Fart .Having built is, whole Knowledge Universe into a single living organism -his TOK-he can surely & speedily climb &ereach anywhere on it from anywhere elseon it, without ever having to jump or cut or otherwise interrupt the continuity of his journey- his arguments and reasoning, He isready to answer any Question from his audience, instantly placing it ontohis TOK end securely traversing through the straightest possibleroute- or any otherpath he pleases- to that point from where he currently lies. However remotely placed the Qn, in aregion of the thinnest branches or even leaves, the Tree affords a route to its agile resident, from thick to thinner to the thinnest branches... Like Reply Joseph Kassapis Top Down: Everything is @ product, a consequence, an cffect of causes & conditions, Everything follows from pre-existing things and is explained by them: and ean only be introduced’, examined & understood by reference to them, "Specialist" means more somebody who knows Allabout his topic, than somebody who focused single-mindedly Imind-lessty )ontoit, oblivious to what brought it about, leads to itand supports i or whattit in turn leads to and supports. l was reading the other dayin @ book by the Dalai Lama about the importance of the Causality Principle in Buddhist philosophy. Making me think once more how few, in the end, arethe fundamental principles that underlie knowledge. Allthings are both effects & causes, parts of bigger things, chains of events, ust aspects of broader concepts. No single link in the chain isa whole ides capable of beingunderstood in isolation, without teferenceto the other links (slbeit theless the further away we move along, the chain}. Internal Auditors, eg. identify Problems (Risks|, digdown to their Causes, & project forward to their Consequences. The “finding” only has mesning/valueifit incorporates all3: Problem, Cause, Effect. Where "Cause" isitselfa whole Causal Chain .. Like Reply lw lw =] a