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Untitled-1 1 12/8/17 4:38 PM
SECTION 10 Planning and Performing Audit
Procedures in the Revenue and
An Audit Simulation
Expenditure Cycles
10.1 Southeast Shoe Distributor, Inc. . . . . . . . . . . . . . . . . . . . . . . 315
Identification of Tests of Controls for the Revenue Cycle
(Sales and Cash Receipts)
10.2 Southeast Shoe Distributor, Inc. . . . . . . . . . . . . . . . . . . . . . . 333
Identification of Substantive Tests for the Revenue Cycle
(Sales and Cash Receipts)
10.3 Southeast Shoe Distributor, Inc. . . . . . . . . . . . . . . . . . . . . . . 343
Selection of Audit Tests and Risk Assessment for the Revenue Cycle
(Sales and Cash Receipts)
10.4 Southeast Shoe Distributor, Inc. . . . . . . . . . . . . . . . . . . . . . . 351
Performance of Tests of Transactions for the Expenditure Cycle
(Acquisitions and Cash Disbursements)
10.5 Southeast Shoe Distributor, Inc. . . . . . . . . . . . . . . . . . . . . . . 371
Performance of Tests of Balances for the Expenditure Cycle
(Acquisitions and Cash Disbursements)

SECTION 11 Developing and Evaluating

Audit Documentation
11.1 The Runners Shop. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383
Litigation Support Review of Audit Documentation for Notes Payable

CASES RELATED TO THIS SECTION

9.1-6 Section 9: Auditing Cash, Fair Value, and Revenues . . . . . . . . 253
Various Cases
10.1-5 Section 10: Southeast Shoe Distributor, Inc. . . . . . . . . . . . . 315
An Audit Simulation

© 2019 Pearson Education, Inc. vii

 Completing the Audit, 12 SECTION
Reporting to Management,
and External Reporting
12.1 EyeMax Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399
Evaluation of Audit Differences
12.2 Auto Parts, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405
Considering Materiality When Evaluating Accounting Policies
and Footnote Disclosures
12.3 K&K, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407
Leveraging Audit Findings to Provide Value-Added Insights
in a Manufacturing Environment
12.4 Surfer Dude Duds, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413
Considering the Going-Concern Assumption
12.5 Murchison Technologies, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 417
Evaluating an Attorney’s Response and
Identifying the Proper Audit Report
12.6 Going Green . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423
Sustainability and External Reporting

viii © 2019 Pearson Education, Inc.

 A LPHAB E TI C C AS E I N D E X

7.1 Anne Aylor, Inc. . . . . . . . . . . . . . . . . . . 223 5.8 Oilfields-R-Us, Inc.. . . . . . . . . . . 199

3.3 Anonymous Caller, The . . . . . . . . . . . . . . 43 1.1 Ocean Manufacturing, Inc. . . . . . . . 13
2.2 Apple Inc. . . . . . . . . . . . . . . . . . . . . . . 27 4.6 Phar-Mor, Inc. . . . . . . . . . . . . . 117
2.3 Asher Farms, Inc. . . . . . . . . . . . . . . . . . . 31 5.3 Red Bluff Inn & Café . . . . . . . . . . 163
12.2 Auto Parts, Inc. . . . . . . . . . . . . . . . . . . 405 9.7 RedPack Beer Company . . . . . . . . 305
9.4 Bud's Big Blue Manufacturing. . . . . . . . . . 277 11.1 Runners Shop, The . . . . . . . . . . . 383
8.3 Burlingham Bees . . . . . . . . . . . . . . . . . 247 5.6 Sarbox Scooter, Inc. . . . . . . . . . . 177
4.3 Cendant Corporation . . . . . . . . . . . . . . . 95 4.7 Satyam Computer Services Limited . 129
5.5 Collins Harp Enterprises . . . . . . . . . . . . . 173 5.1 Simply Steam, Co. . . . . . . . . . . . 147
4.2 Comptronix Corporation . . . . . . . . . . . . . 87 5.7 Société Générale . . . . . . . . . . . . 191
3.1 Day in the Life of Brent Dorsey, A . . . . . . . . 37 10.1 Southeast Shoe Distributor, Inc.:
Tests of Controls for
5.2 Easy Clean, Co. . . . . . . . . . . . . . . . . . . 155 the Revenue Cycle . . . . . . . . . 315
4.1 Enron Corporation and Andersen, LLP . . . . . . 75 10.2 Southeast Shoe Distributor, Inc.:
Substantive Tests for
12.1 EyeMax Corporation . . . . . . . . . . . . . . . 399
the Revenue Cycle . . . . . . . . . 333

Flash Technologies, Inc. . .www.pearsonhighered.com/Beasley
10.3 Southeast Shoe Distributor, Inc.:
12.6 Going Green . . . . . . . . . . . . . . . . . . . . 423 Audit Tests and Risk Assessment
for the Revenue Cycle . . . . . . . . 343

Harley-Davidson, Inc. . . www.pearsonhighered.com/Beasley
10.4 Southeast Shoe Distributor, Inc.:
9.2 Henrico Retail, Inc. . . . . . . . . . . . . . . . . 269 Tests of Transactions for the
Expenditure Cycle . . . . . 351
3.5 Hollinger International . . . . . . . . . . . . . . 53 . . . .

9.6 Hooplah, Inc. . . . . . . . . . . . . . . . . . . . 295 10.5 Southeast Shoe Distributor, Inc.:

Tests of Balances

Jacksonville Jaguars . . www.pearsonhighered.com/Beasley for the Expenditure Cycle . . . . . . 371

12.3 K&K, Inc.. . . . . . . . . . . . . . . . . . . . . . 407 5.4 St. James Clothiers . . . . . . . . . . 165

4.8 Koss, Inc.. . . . . . . . . . . . . . . . . . . . . . 135 12.4 Surfer Dude Duds, Inc. . . . . . . . . 413
8.1 Laramie Wire Manufacturing . . . . . . . . . . 237 6.1 Town and Country Hardware. . . . . 209
9.3 Longeta Corporation . . . . . . . . . . . . . . . 273 9.1 Wally’s Billboard & Sign Supply . . . 253
9.5 Morris Mining Corporation . . . . . . . . . . . 289 4.4 Waste Management, Inc. . . . . . . . 101
12.5 Murchison Technologies, Inc. . . . . . . . . . . 417 3.6 Wells Fargo . . . . . . . . . . . . . . . . 65
3.2 Nathan Johnson’s 3.4 WorldCom. . . . . . . . . . . . . . . . . 47
Rental Car Reimbursement . . . . . . . . . . . . 41
4.5 Xerox Corporation . . . . . . . . . . . 109
8.2 Northwest Bank . . . . . . . . . . . . . . . . . . 241
2.1 Your1040Return.com . . . . . . . . . . 23

© 2019 Pearson Education, Inc. ix

This page intentionally left blank
 PR E FAC E
Auditing Cases: An Interactive Learning Approach provides exposure to real-world audit techniques
and hands-on learning for students in both undergraduate and graduate auditing courses. This Seventh
Edition continues our tradition of providing a rich learning experience for students that challenges them
to apply knowledge learned in the classroom and from traditional auditing textbooks so they can develop
skills to complete tasks they will be asked to do once they enter the accounting and auditing profession.

NEW CASES TO THE SEVENTH EDITION

The Seventh Edition continues to feature a variety of cases that address different aspects of the audit. Some are
based on real companies, while others are disguised as “hypothetical companies” in order to provide a “surprise
element” once they are completed. Additional cases include examples of client system documentation and audit
workpapers that students prepare and evaluate as if they are on a current audit team.

C A S E 3.6 Wells Fargo

Assessing the Impact of Ethical Culture
This case features the alleged inappropriate sales culture at Wells Fargo Bank that
ultimately led to the CEO’s 2016 testimony in front of the U.S. Senate Banking
Committee and his subsequent resignation. The bank’s audit firm was challenged to
defend its work by four U.S. Senators, one of whom included Bernie Sanders, a recent
candidate for U.S. President.

C A S E 4.8 Koss, Inc.

The Sounds of a High-Fidelity Fraud
This case gives students a “bird's-eye” view of the 9th-largest embezzlement fraud in
U.S. history, which took place at the Koss Corporation, headquartered in Wisconsin. The
case vividly illustrates what can happen when internal control over financial reporting
(ICFR) is lax at a public company. The case will be particularly interesting for students
because much of the story of this massive defalcation fraud is introduced through the
words of the company’s CEO and the individual who stole $34 million from the company,
adapted from deposition statements. The case brings to life the importance of effective
ICFR, with an emphasis on the Control Environment, and introduces students to the
role that accountants can play as expert witnesses in court cases.

C A S E 5.8 Oilfields-R-Us, Inc.

Evaluation of Management Review Controls
This case introduces students to management review controls (MRCs), an increasingly
important topic in practice for both management and auditors. In a MRC, members
of management review key information and evaluate reasonableness by comparing it
to expected value, such as budget-to-actual comparisons and review of accounting
estimates. This case helps students appreciate the importance of the effective design
and execution of MRCs, and it highlights some of the challenges of evaluating their
effectiveness in audits of internal control over financial reporting.

© 2019 Pearson Education, Inc. xi

 Town and Country Hardware
Evaluation of Tests of Controls with Automated 6.1 C A SE
Component for the Expenditure Cycle (Purchases)
This case introduces students to internal controls with an automated component that
are an increasingly important topic in the practice for both management and auditors.
This case helps students appreciate the challenges of evaluating the effectiveness of
internal controls over financial reporting with an automated component.

ADDITIONAL NEW FEATURES OF THE SEVENTH EDITION

Reflects Recent Auditing Standards
This edition includes updates that reflect new auditing standards issued by the AICPA’s Auditing Standards
Board (up through SAS No. 132, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern)
and the PCAOB’s Auditing Standards (up through AS 3101, The Auditor’s Report on an Audit of Financial Statements
When the Auditor Expresses an Unqualified Opinion). When relevant, questions expose students to new guidance
contained in recently issued auditing standards.

Updated and Re-ordered Materials and Questions

Many of the case questions have been restructured to change the nature of the topics addressed and to expose
students to different issues from those examined in prior editions. Many cases also have reordered questions.
Dates in hypothetical cases have been set in calendar year 2018 with audit procedures performed on the 2017
fiscal year information and/or interim procedures performed on the 2018 fiscal year information. When
appropriate, we have changed underlying data in some of the hypothetical cases so that the cases differ from
prior editions. All of these changes reduce the potential benefit of students seeking our solutions from prior
editions of the casebook. Further, students who inappropriately access and use solutions to prior editions are
more likely to be detected by the instructor.

SOLVING TEACHING AND LEARNING CHALLENGES

Auditing educators continue to look for opportunities to increase their emphasis on the development of students’
professional judgment, critical thinking, communication, and interpersonal relationships skills. Development of
these skills requires a shift from passive instruction to active involvement of students in the learning process.
Unfortunately, current course materials provided by many publishers are not readily adaptable to this kind of
active learning environment, or they do not provide materials that address each major part of the audit process.
The purpose of this casebook is to give students hands-on exposure to realistic auditing situations focusing
specifically on each aspect of the audit process.

Over 50 Cases Spanning the Audit Processes

This casebook contains a collection of 50 auditing cases plus a separate learning module about professional
judgment that allows the instructor to focus and deepen students’ understanding in each of the major activities
performed during the conduct of an audit. These cases expose students to aspects of the audit spanning from
client acceptance to issuance of an audit report, with a particular focus on how professional judgment is applied
throughout the audit. Each case is primarily assigned to one of 12 identified aspects of an audit; however, a
number of cases address more than one topic. As a result, cases are cross-referenced in the Table of Contents so
that instructors can easily pinpoint how a particular case might be useful to address different audit topics. The
following Table of Contents Overview provides the number of cases for each of the 12 topics.
xii © 2019 Pearson Education, Inc.
Table of Contents Overview
Primary Cross-referenced Bonus Online
Section / Audit Topic
Cases Cases Cases*
1 Client Acceptance 1
2 Understanding the Client’s Business and
3 1
Assessing Risks
3 Professional and Ethical Issues 6
4 Accounting Fraud and Auditor Legal Liability 8 1
5 Internal Control Over Financial Reporting 8 2
6 The Impact of Information Technology 1 5 2
7 Planning Materiality 1 4
8 Analytical Procedures 3 1
9 Auditing Cash, Fair Value, and Revenues 7 3
10 Planning and Performing Audit Procedures in
5
the Revenue and Expenditure Cycles
11 Developing and Evaluating Audit Elevating Professional Judgm

1 2
Documentation KPMG Professional Judgment Framework
12 Completing the Audit, Reporting to
6
in the figure below, you will see the KPMG Professional
Management, and External Reporting Judgment Framework. the Framework includes a number of
components, such as mindset, consultation, knowledge and
Total Cases 50 influences and biases,
professional standards, 18 reflection, and 3
coaching. at the core of the Framework, you will see a five-step
*In addition to the 50 cases included in the book, three additional cases
judgment from prior editions can be accessed via the casebook website
process.
(www.pearsonhighered.com/Beasley). Thus, there are 53 different case options available for use!

The KPMG Professional Judgment Framework

Module on Professional Judgment
The casebook includes a Learning Module on
Professional Judgment that exposes students ENVIRONMENT
Influences/Biases
to a professional judgment framework and
outlines a framework of good judgment as
well as a number of judgment tendencies
Coaching
Reflect on Previous
Experience
Reflect on
Lessons Learned
Coaching the Fr
and traps that can introduce bias into the includ
judgment process. Because professional 5
articulate &
1
Clarify
of com
judgments are required throughout the entire Document
Rationale
Mindset
issues &
Objectives such a
audit process, from client acceptance to consu
report issuance, we include an Introduction 4 Co
nsultatio
2
knowl
n

Reach Consider

to Professional Judgment as an upfront Conclusion alternatives

learning module rather than as an individual

3
Gather &
profes
case. We encourage students to complete
Evaluate
information standa
this learning module early in their auditing Strategies for Avoiding Traps and Mitigating Bias
influen
course to expose them to the fundamentals Knowledge/Professional Standards
biases
of professional judgment, which they can use
Reprinted from the KPMG Professional Judgment Framework: Elevating Professional Judgment in Auditing with
and co
as they complete the required professional permission from KPMG LLP. © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member
judgment questions in many of the cases thefirm
steps
of the in thenetwork
KPMG process may not
of independent appear
member firms overly surprising
affiliated with to you;Cooperative
KPMG International
(“KPMG International”), a Swiss entity. All rights reserved. For additional news and information, please access
they may even seem rather simple and intuitive. However, while
to this edition. The professional judgment KPMG's global Web site on the Internet at www.kpmguniversityconnection.com.
the KPMG Professional Judgment Framework provides a good
questions are separately highlighted in gray- representation of the process we should follow when applying
shaded sections of the Requirements section. professional judgment, it is not necessarily an accurate representation
of the processes people follow consistently. the reason that formal
© 2019 Pearson Education, Inc. steps in the judgment process do not capture how we always make xiii
judgments is that the model assumes that we always properly
define the important issues and objectives, consider all appropriate
alternatives, gather the right amount (quantity) and type (quality) of
information, and then properly weight the consequences of each
 In-Class and Out-of-Class Assignments
FLIPPED While all of the cases can be assigned for completion as an outside-
of-class assignment, several of the cases are designed so that they
CLASSROOM can be easily used as an in-class learning opportunity. The
Instructor’s Resource Manual provides several ideas of how many of
the cases can be easily incorporated as an in-class activity, which should
be especially helpful for instructors who have “flipped” their classes.

Real-World Application
Each case presents a number of audit related issues and decisions that help students apply their audit knowledge
and skills to real-world scenarios. A number of the cases are based on actual situations involving real
companies. Others are hypothetical cases that disguise the innocent.

DEVELOPING SKILLS FOR THE PROFESSION

For students to succeed in a rapidly changing accounting and auditing profession, they need to be skilled at
thinking critically and analytically, while remaining open and flexible to life-long learning and development.
Auditing Cases: An Interactive Learning Approach provides an effective platform to help students build a strong
toolkit of skills that will increase their career success. Here are some of the ways this casebook helps strengthen
their abilities for careers in the accounting and auditing profession.

Critical Thinking
All of the cases present realistic issues and challenges that auditors face every day in the
engagements they perform. Because of that, each case presents scenarios that require
students to think critically about identifying the issue at hand and then determining how
to respond in a way that would be appropriate in an audit engagement setting. Many of
the cases present dilemmas that highlight the realities of the complexities students will
face when in their professional careers. Completion of these cases will help students
develop and mature their critical thinking and analytical skills.

Hands-on Application
All cases engage students in applying their knowledge and skills in a hands-on learning
environment. For some cases, students review client generated documentation,
complete actual audit program procedures, and prepare and evaluate audit working
papers. Other cases require students to conduct Internet based research similar to what
might be required in an audit to locate guidance in professional standards or to access
relevant financial statement filings with the U.S. Securities and Exchange Commission.

Communication Skills
A number of the cases require students to prepare written responses in memorandum
or report format. The Instructor’s Resource Manual contains a number of different ideas
for structuring assignments to have students develop their written communication skills.

Team-Based and Individual Assignments

All of the cases are designed so that students can complete them either in teams or
individually. The Instructor’s Resource Manual contains a number of different suggestions
for assigning the cases as group or individual assignments.

Photo Credit: Creative Stall/Shutterstock

xiv © 2019 Pearson Education, Inc.
 INSTRUCTOR TEACHING RESOURCES
The accompanying Instructor Resource Manual clearly illustrates the different instructional approaches available
for each case (e.g., examples of cooperative/active learning activities and/or out-of-class individual or group
assignments) and efficiently prepares the instructor for leading interactive discussions. The Instructor Resource
Manual contains rich solutions to help instructors pinpoint the relevant issues that are the focus of each of the
cases. To access this manual, log on to:
www.pearsonhighered.com/Beasley
We are pleased to provide this updated Seventh Edition and hope that the professional skills of your students
will be enhanced through completion of cases contained within this edition.

ACKNOWLEDGEMENTS
The authors appreciate the assistance of Brant Christensen and Jacob Smith in assembling materials for some
of the cases. We also want to express our sincere gratitude to Jonathan Liljegren for his incredible work in the
design and assembly of the entire casebook and instructor resources. We are grateful for his professionalism
and eye for detail. Finally, we thank our families who are always supportive of our efforts and who allow us to
pursue these kinds of creative opportunities.

ABOUT THE AUTHORS

Mark S. Beasley, PhD, CPA
Mark Beasley is the Deloitte Professor of Enterprise Risk Management
and Professor of Accounting in the Poole College of Management at North
Carolina State University. He has taught undergraduate and graduate auditing
courses and has received several teaching awards including membership in NC
State’s Academy of Outstanding Teachers. He has extensive professional audit
experience with the predecessor firm to EY and has extensive standards-setting
experience with working with the Auditing Standards Board as a Technical
Manager in the Audit and Attest Division of the AICPA. He served over seven
years as a member of the COSO Board, representing the AAA. He has co-
authored over 90 articles, books, and research monographs.

Frank A. Buckless, PhD

Frank Buckless is the KPMG Professor and Department Head of Accounting
in the Poole College of Management at North Carolina State University. He
has taught undergraduate and graduate auditing and currently trains audit
professionals with KPMG. He also has been a co-instructor for the Audit
Section’s Audit Educator’s Bootcamp. Frank worked professionally as an
auditor with Arthur Andersen & Co. He has authored numerous articles and
books and was the 2016 recipient of the American Accounting Association’s
Innovation in Accounting Education Award.

© 2019 Pearson Education, Inc. xv

 Steven M. Glover, PhD, CPA
Steve Glover is the K. Fred Skousen Professor and Associate Dean of the
Marriott School of Management at Brigham Young University. He has taught
undergraduate and graduate auditing courses and graduate courses on a
judgment and decision-making. Steve has significant audit experience with
KPMG and PwC and he continues to consult with public accounting firms
and as a subject matter expert in litigation and restatements. Steve is on the
Auditing Standards Board of the AICPA and is past President of the Auditing
Section of the American Accounting Association (AAA). Steve has published
numerous articles and books and is a co-author on leading monographs,
including Elevating Professional Judgment in Auditing and Accounting: The KPMG
Professional Judgment Framework, which received the AAA Deloitte/Wildman
Medal award recognizing the published work making the most significant
contribution to the advancement of the practice of public accountancy over a
period of 5 years.

Douglas F. Prawitt, PhD, CPA

Doug Prawitt is the McAllister/Deloitte Professor of Accountancy at BYU.
His research and teaching in BYU’s graduate accounting and MBA programs
focus on financial statement auditing and professional judgment. Doug has
published award-winning articles in top practice journals and has co-authored
two leading auditing textbooks. His research has been published in premier
academic journals, including The Accounting Review, Journal of Accounting Research,
and Contemporary Accounting Research. Doug has won several research, teaching,
and "best research paper" awards, including the 2013 AAA/Deloitte Wildman
Medal Award recognizing the publication over a five-year time span most likely
to positively impact the public accounting profession, the 2016 BYU Marriott
School Outstanding Faculty Award, and the American Accounting Association’s
2016 Outstanding Accounting Educator Award. Doug is active in the profession,
having served a three-year term as a member of the AICPA’s Auditing Standards
Board, and currently serves as a member of the COSO Board. He also serves as
an expert witness in high-profile auditing cases and consults with a variety of
professional services firms, large and small.

xvi © 2019 Pearson Education, Inc.

 I N TRO DU CTI ON

Professional Judgment
Understanding and Developing Professional Judgment
in Auditing and Accounting
Mark S. Beasley · Frank A. Buckless · Steven M. Glover · Douglas F. Prawitt

THE IMPORTANCE OF PROFESSIONAL JUDGMENT IN AUDITING AND

ACCOUNTING1
As you prepare for a professional career, have you ever wondered what characteristics distinguish an exceptional
professional from one who is just average? One key distinguishing feature is the ability to consistently make
high-quality professional judgments. Professional judgment, which is the bedrock of the accounting and auditing
professions, is referenced throughout the professional literature. In some of your accounting or auditing classes,
you may have had an instructor respond to a question with the classic answer, “That depends; it is a matter of
professional judgment.” This is often true in auditing, but it is not overly satisfying to a student who wonders
exactly what good professional judgment looks like, or how he or she can develop the ability to make good
professional judgments. The purpose of this module is to provide a very brief overview and introduction to
help you understand what a good professional judgment process looks like, make you aware of common threats
to exercising good judgment, and give you a head start in developing and improving your own professional
judgment abilities.
A common question people have is, “Can you really teach good judgment?” Many believe that it is a
gift; either you have it or you do not. Others would say you cannot teach good judgment; rather, it must be
developed through the “school of hard knocks” after many years of experience. There is no question that talent
and experience are important components of effective professional judgment, but it is possible to enhance your
professional judgment skills through learning and applying some key concepts. As with other important skills,
the sooner you start learning how to make good professional judgments, the better—which is why KPMG
made a very significant investment of time and resources to produce the monograph from which this module
is adapted to help the next generation of professionals get a head start on developing professional judgment.
Research in the areas of judgment and decision making over the last few decades indicates that
additional knowledge about common threats to good judgment, together with tools and processes for making
good judgments, can improve the professional judgment abilities of both new and seasoned professionals. With
the movement in financial reporting toward more principles-based standards and more fair value measurements,
exercising good professional judgment is increasingly important for auditors. While this module contains a
brief overview of some of the most important topics, KPMG’s full monograph contains considerably more in-
depth information about professional judgment in auditing, including additional coverage of judgment traps
and biases, judgment in groups, and other topics. That monograph is titled Elevating Professional Judgment in
Auditing and Accounting: The KPMG Professional Judgment Framework; it is available without charge at http://www.
kpmguniversityconnection.com.
1 This Professional Judgment Introduction is adapted from The KPMG Professional Judgment Framework: Elevating Professional Judgment in Auditing and is included with
this casebook with permission from KPMG, LLP. © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
All information provided is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to
provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be
accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the facts of a particular
situation. For additional news and information, please access KPMG's global Web site on the Internet at www.kpmguniversityconnection.com.

© 2019 Pearson Education, Inc. 1

Introduction | Professional
Section 1 | Auditing Judgment
Cash, Fair Value, and Revenues

A MODEL OF A GOOD JUDGMENT PROCESS

Let’s start with a common definition of judgment: Judgment is the process of reaching a decision or drawing a Professional Judg
Elevating
conclusion where there are a number of possible alternative solutions. Judgment occurs in a setting of uncertainty and
2

risk. In the areas of auditing and accounting, judgment is typically exercised in three broad areas:
KPMG Professional
 Evaluation of evidence Judgment Framework
(e.g., does the evidence obtained from confirmations, combined with
other audit evidence, provide sufficient appropriate audit evidence to determine whether accounts
in thereceivable
figure isbelow,
fairly stated)
you will see the KPMG Professional
 Estimating probabilities
Judgment Framework. the (e.g., determining whether
Framework includesthe probability-weighted
a number of cash flows used by a
company to determine the recoverability of long-lived assets are reasonable)
components, such asoptions
 Deciding between mindset, (e.g.,consultation,
audit procedureknowledge
choices, such and
as inquiry of management,
professional
inspection,standards,
or confirmation)influences and biases, reflection, and
coaching.
Of course,atwethe core
do not oftothe
need Framework,
invest you
significant time or will
effortsee
whenamaking
five-step
easy or trivial judgments.
However, as the judgments
judgment process. become more important and more difficult, it is helpful to have a reliable, tested
framework to help guide our judgment process. KPMG’s Professional Judgment Framework is an example of
such a framework. Following a good process will not make hard judgments easy or always guarantee a good
outcome, but a well-grounded process can improve the quality of judgments and help auditing professionals
more effectively navigate through complexity and uncertainty.
The In theKPMG
figure below,Professional Judgment
you will see the KPMG Professional Framework
Judgment Framework. The Framework includes
a number of components, such as mindset, consultation, knowledge and professional standards, influences and
biases, reflection, and coaching. At the core of the Framework, you will see a five-step judgment process.
ENVIRONMENT
Influences/Biases

Coaching
Reflect on Previous
Experience
Reflect on
Lessons Learned
Coaching the Fr
includ
5
articulate &
1
Clarify
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Document
Rationale
Mindset
issues &
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consu
4 Co 2
nsultatio knowl
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Reach Consider
Conclusion alternatives
3
Gather &
profes
Evaluate
information standa
Strategies for Avoiding Traps and Mitigating Bias
influen
Knowledge/Professional Standards
biases
Reprinted from the KPMG Professional Judgment Framework: Elevating Professional Judgment in Auditing with permission from KPMG LLP. © 2013 KPMG LLP, a Delaware limited liability partnership
and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
and co
For additional news and information, please access KPMG's global Web site on the Internet at www.kpmguniversityconnection.com.

2 Making judgments can be distinguished from making decisions. Decision making involves the act of choosing among options or alternatives, while
the steps in the process may not appear overly surprising to you;
judgment, according to Webster’s 11th, involves “the process of forming an opinion or evaluation by discerning and comparing.” Thus, judgment is a subset
of the process of decision making—many judgments are typically made in coming to a decision. However, for simplicity in this module, we often refer to
they may even seem rather simple and intuitive. However, while
the combined processes of judgment and decision making as “judgment,” “professional judgment,” or “making judgments.”
2 the KPMG Professional Judgment Framework provides a good© 2019 Pearson Education, Inc.
representation of the process we should follow when applying
professional judgment, it is not necessarily an accurate representation
 Professional Judgment | Introduction
Professional Judgment |
Take a moment to examine the steps in the process at the center of the framework. These steps are
rather simple and intuitive. However, while the KPMG Professional Judgment Framework provides a good
representation of the process we should follow when applying professional judgment, but it is not necessarily
an accurate representation of the processes people follow consistently. The reality is that in a world of pressure,
time constraints, and limited capacity, there are a number of judgment traps we can fall into. In addition, we can
be subject to biases caused by self-interest or by unknowingly applying mental shortcuts.
The Professional Judgment Framework depicts constraints, influences, and biases that threaten good
judgment with the box on the outer rim of the Framework labeled “Environment” and the triangle at the top
labeled “Influences/Biases.” At the bottom of the Professional Judgment Framework, you will see Knowledge
and Professional Standards, as these factors are foundational to quality judgments. These are environmental
influences that can affect professional judgment. The “ribbon” of coaching and reflection running through the
Framework is of great importance to the development of professional judgment in young professionals. In the
next section of this module, we will highlight common judgment tendencies and the associated biases that can
influence auditor judgment.
At the very center of the KPMG framework is “mindset.” It is important that auditors approach matters
objectively and independently, with inquiring and incisive minds. Professional skepticism, which is required by
professional auditing standards, is an objective attitude that includes a questioning mind and a critical assessment
of audit evidence. Professional skepticism is not synonymous with professional judgment, but rather, it is an
important component or subset of professional judgment. Professional skepticism helps to frame our “mindset.”
Finally, wrapping around “mindset” in the Framework is “consultation.” At professional services firms
like KPMG, consultation with others, including engagement team members, specialists, or other professionals,
is a vital part of maintaining consistently high judgment quality and enhancing the exercise of appropriate
professional skepticism.

TRAPS THAT CATCH US IN THE EARLY STEPS

OF THE JUDGMENT PROCESS
As we mentioned earlier, in reality people often do not follow a good process due to common judgment traps
and tendencies that can lead to bias. These traps and tendencies are systematic—in other words, they are
common to most people, and they are predictable. Some of these tendencies are judgment “shortcuts” that help
simplify a complex world and facilitate more efficient judgments. These shortcuts are usually quite effective, but
because they are shortcuts, they can lead to systematically biased judgments. As a simple illustration of how our
mental processes that normally serve us very well can sometimes lead to bias, consider “optical illusions” you
may have seen on the internet.3 Our eyes and related perceptual skills ordinarily are quite good at perceiving
and helping us to accurately judge shape similarity. However, optical illusions can predictably and systematically
fool our eyes. Just as with perceptual biases, there are times when our intuitive judgment falls prey to systematic
traps and biases. Research provides convincing evidence that even the smartest and most experienced people
similarly fall into predictable judgment traps and biases.
The “Rush to Solve.” One of the most common judgment traps is the tendency to want to immediately
solve a problem by making a quick judgment. As a result, we under-invest in the important early steps in the
judgment process and often go with the first workable alternative that comes to mind or that is presented. As a
result of the rush-to-solve trap, we sometimes end up solving the wrong problem, or we settle for a suboptimal
outcome because we did not consider a full set of alternatives.
Judgment Triggers: Solving the Wrong Problem. Consider the following example. Two snack food
companies are competing for market share—let’s call them Ax Snack Company and Bobb Goodies Inc. Bobb’s
executives were convinced that Ax’s competitive advantage was attributable to the company’s distinctive, highly
recognizable individual snack packaging design. The individual snack packages seemed to draw customers to
the products. So, Bobb’s executives determined that to gain market share, they would need to develop individual

3 KPMG’s Professional Judgment student monograph contains illustrations, audio files, and links to internet files that vividly illustrate many of the
concepts introduced in this module.

© 2019 Pearson Education, Inc. 3

Section 1 | Auditing
Introduction Cash, FairJudgment
| Professional Value, and Revenues
package designs that were equally distinctive. They spent millions on improved packaging appearance for their
snack foods to compete against Ax’s distinctive packaging. When increased market share did not follow, Bobb’s
executive team realized that they knew relatively little about what customers really wanted and what drove the
consumption of their snack foods. Bobb’s executives decided to conduct market research, and along the way, they
discovered an important and somewhat unexpected aspect of consumer behavior: regardless of the quantity of
product they placed in a home, it would be consumed in relatively short order. Thus, Bobb’s executives clarified
the decision problem as “how to get larger quantities of snack products into consumers’ homes.” Accordingly,
they focused less on the appearance of individual snack packages and instead introduced bulk packaging that
made it easier and more convenient to get more snacks into consumers’ homes. The resulting gain in market
share was dramatic.
This example illustrates one of the biggest traps we run into during the first couple of steps of the
judgment process, which is under-investing in defining the fundamental issue. In the example above, Ax Snack
Company’s distinctive packaging functioned as what could be called a judgment trigger, or an assumed or
inherited issue that can lead the decision maker to skip the crucial early steps in the judgment process. It caused
Bobb Goodies’ executives to focus, at first, on the wrong issue or problem. Judgment triggers can often be
recognized when a particular alternative is used to define the problem in place of a well thought-out problem
definition. Often, the trigger comes from the way others have defined the issue, which is often formulated in
terms of one potential solution. Alternatively, we may create triggers ourselves because we are in such a hurry to
“solve” or to be decisive. Judgment triggers often lead to judgments made on incomplete facts or understandings.
How might you overcome the very common trap of skipping the first couple of elements in the judgment
process that comes about through the rush to solve or through judgment triggers? The answer is to ask “what”
and “why” questions. For example, you might initially answer a “what” question regarding retirement goals with,
“I want to have a certain amount of money in a retirement fund.” That certainly is a worthy objective, but as
with many initial objectives, it is only a means to an end. Following up by asking why you want a certain amount
of money can help you uncover the more fundamental objective, which might be something like, “to maintain
a high quality of life in retirement.” Note that by clarifying the objective in this way, a number of additional
approaches to achieving a high quality of life come to mind (such as good health, no debt, cost of living, location,
availability of outdoor recreation, etc.). Carefully clarifying underlying objectives by asking “why” is a key step
in making important judgments.
It often does not take a lot of time to consider the first step in the judgment process, but the more
important the judgment, the more important it is to invest in clarifying the fundamental issues and objectives.
A little extra investment in clarifying the issue and objectives will almost always pay off, sometimes in a big way.
One very powerful way to improve your professional judgment is to make sure you are not accepting a judgment
trigger in place of a solid problem definition, but rather that you are taking time to ensure your problem
definition is complete and correct.

PROFESSIONAL SKEPTICISM AND “JUDGMENT FRAMING”

As noted previously, at the center of the Framework is “mindset.” Professional skepticism helps to appropriately
frame an auditor’s mindset. Essential to an auditor’s ability to effectively question a client’s accounting choices
is a fundamental but powerful concept called “judgment framing.” This concept relates to the early steps in the
judgment process. The definition of framing follows: Frames are mental structures that we use, usually subconsciously,
to simplify, organize, and guide our understanding of a situation.They shape our perspectives and determine the information
that we will see as relevant or irrelevant, important or unimportant. Frames are a necessary aspect of judgment, but
it is important to realize that our judgment frames provide only one particular perspective. This is similar to
looking out one window of your home—it provides one view that might be quite different from the view
through another window facing a different direction.
Frames are necessary and helpful, but the problem is that we often are not aware of the perspective
or frame we are using. Also, our frame can blind us to the fact that there are other valid perspectives. In other
words, frames help us make sense of things but they also make it difficult for us to see other views. By being
proactive in our use of judgment frames, we can improve how well we do with the initial steps in the judgment

4 © 2019 Pearson Education, Inc.

 Professional
Professional Judgment Judgment |
| Introduction
process: clarifying issues and objectives and considering alternatives. This is important because a distinguishing
characteristic of professionals who consistently exercise sound judgment is that they recognize the judgment
frame they are using, and they are able to consider the situation through different frames, or what KPMG
professionals refer to as a “fresh lens.” Sounds simple enough, but it is not always easy to do! The concept of
judgment framing is important because appropriately questioning management’s perspective by viewing the
situation through other frames is fundamental to professional skepticism.
For example, suppose the results of a substantive analytical procedure suggest that a client’s allowance
for doubtful accounts is understated.The auditor’s approach to gathering further audit evidence will be different
if the results are framed in the context of a change in business condition or a change in the client’s credit policy
as compared to an indicator of a likely error. This is not to say one frame is necessarily better than the other, but
the auditor can boost his or her professional skepticism by considering both frames.
A key characteristic of those who make high-quality judgments is that they are frame-aware.They know
how to seek and consider different frames to get a fuller picture of the situation. Seasoned, experienced auditors
develop this ability and apply it in situations where they need to help client management see an alternative
viewpoint on an important accounting issue. For example, an alternative frame that auditors might use could be
an investor or analyst perspective, or a regulator perspective. Or it might be a “hindsight” perspective—in other
words, how will management’s judgment look if a regulator later questions it, or if it is reported in the press in
six months? While experienced auditors are typically quite skilled at challenging frames and considering issues
from different perspectives, this is an area where auditors entering the profession typically need improvement.

JUDGMENT TENDENCIES THAT CAN RESULT IN BIAS

Peoples’ judgments can be unintentionally biased due to underlying self-interest or because they unknowingly
use mental shortcuts. For the most part, the shortcuts we use are efficient and often effective, but in certain
situations, they can result in systematic, predictable bias. Keep in mind that the tendencies or shortcuts we will
discuss are simplifying judgment strategies or rules of thumb that we have unknowingly developed over time
to help us cope with the complex environments in which we operate. They are efficient and often effective, but
because they are shortcuts, they can lead to lower quality judgment in some situations. Here’s a quick example
of a simplifying shortcut.When crossing a city street, say in NewYork City, some people don’t wait until they get
a “walk” sign; rather, they move through intersections by quickly looking to the left for oncoming traffic. If the
coast is clear, they will take a step out into the street and then look to the right for traffic coming the other way.
This is a very efficient and often effective shortcut strategy. Over time, it can become an unconscious, automatic
part of how people cross the street in a busy city. However, if we were to use this shortcut strategy in London,
where they drive on the other side of the street, it could result in a very bad outcome. Even in New York City,
the shortcut can lead to a bad outcome if applied to all streets, since there are one-way streets that come from
the other direction.
Similarly, the judgment shortcuts we commonly use are efficient and generally effective. However, there
are situations where the use of a shortcut can predictably result in a lower quality or biased judgment. The
good news is that once we understand the implications of a shortcut, we can devise ways to mitigate potential
bias resulting from the shortcut. When it comes to crossing the street in London, transportation officials have
devised rather ingenious ways to reduce the potentially serious consequences of using the “American” shortcut
to start across the street looking first only to the left. They have placed signs on the sidewalk, on signposts, and
even on the street, reminding visiting pedestrians of the direction of traffic flow. The signs are an attempt to get
visitors out of the subconscious shortcut mode and apply more formal thinking, which is pretty important for
the well-being of American tourists in London.
We will briefly introduce four common judgment tendencies that are most applicable and important
for audit professionals: the availability tendency, the confirmation tendency, the overconfidence tendency, and
the anchoring tendency.
The availability tendency is defined as: The tendency for decision makers to consider information that is
easily retrievable from memory as being more likely, more relevant, and more important for a judgment.

© 2019 Pearson Education, Inc. 5

Section 1 | Auditing
Introduction Cash, FairJudgment
| Professional Value, and Revenues
In other words, the information that is most “available” to our memory may unduly influence estimates,
probability assessments, and other professional judgments. Like other mental shortcuts, the availability tendency
often serves us well, but it has been shown to introduce bias into business and audit judgments. For example,
an auditor may be inclined to follow the approach used in a prior period or on a recent engagement even if
the approach is not the best for the current engagement. This tendency is especially powerful if the approach
worked well on the prior engagement.
The confirmation tendency is defined as: The tendency for decision makers to seek for and put more weight
on information that is consistent with their initial beliefs or preferences.
You may have heard the old joke, “My mind is made up; don’t confuse me with the facts!” Hundreds
of years ago, leading philosophers recognized that once people have adopted a preference or an opinion, they
tend to consider and gather information that supports and agrees with their preference. Research in psychology
backs this up: people tend to seek confirmatory evidence, rather than looking for something inconsistent with
their opinions or preferences. After receiving this confirmatory evidence, decision makers often are confident
that they have adequate evidence to support their belief. The more confirmatory evidence they are able to
accumulate, the more confident they become. However, in many instances, we cannot know something to
be true unless we explicitly consider how and why it may be false. As an example of the confirmation bias in
auditing, research and reviews of working papers find that auditors may be prone to overrely on management’s
explanation for a significant difference between the auditor’s expectation and management’s recorded value,
even when the client’s explanation is inadequate.
The overconfidence tendency is defined as: The tendency for decision makers to overestimate their own
abilities to perform tasks or to make accurate diagnoses or other judgments and decisions.
When groups of people are asked to assess their own abilities, whether in auditing or in driving a car,
a majority of the participants assess themselves as above average relative to the group being surveyed. But, of
course, it is not possible for all participants to be above average. This is a simple illustration of the fact that
many of us are overconfident in our abilities and, as a result, we often tend not to acknowledge the actual
uncertainty that exists. Overconfidence is a subconscious tendency that results from personal motivations
or self-interest. Importantly, this tendency to be more confident than is justified is likely to affect us even
when we are doing our best to be objective. Research indicates that many people, including very experienced
professionals, are consistently overconfident when attempting to estimate outcomes or likelihoods. Studies
involving practicing auditors demonstrate that auditors may be overconfident in their technical knowledge and
their competence in auditing risky areas. In addition, partners and managers may be overly confident in the
ability of less experienced people in completing complex tasks. Conversely, associates and senior associates may
be overconfident in the competency of more experienced auditors to complete lower-level tasks that they aren’t
accustomed to performing on a regular basis. Such overconfidence can lead to a variety of suboptimal outcomes
in auditing, including neglecting to ask for needed help or guidance, failing to acquire needed knowledge, poor
task performance, budget overruns, assignment of audit tasks to underqualified subordinates, and underreview
of subordinates’ working papers.
The anchoring tendency is defined as: The tendency of decision makers to make assessments by starting from
an initial numerical value and then to adjust insufficiently away from that initial value in forming a final judgment.
To illustrate the anchoring tendency, managers often make salary decisions by adjusting from the starting
point of an employee’s previous salary. A prospective employer might quickly realize the unreasonableness of the
anchor (e.g., her previous employer only paid her $48,000 before she earned an MBA degree), but proposes a
starting salary irrationally close to the starting point, or anchor. So, in this example, the job applicant is likely to
receive a lower salary offer if the prospective employer knows her salary before she earned her MBA. There are
two components of anchoring and adjustment—the tendency to anchor on an initial value and the tendency
to make adjustments away from that initial value that are smaller than what is actually justified by the situation.
The anchoring tendency clearly has direct relevance to auditing in many settings. For example, management’s
estimate or unaudited account balance can serve as an anchor. The auditor is charged with objectively assessing

6 © 2019 Pearson Education, Inc.

 Professional
Professional Judgment Judgment |
| Introduction
the fairness of an account balance. But if his or her judgments are influenced by the amount asserted by
management in an unaudited account balance, that objectivity might be compromised. In other words, the
auditor might become anchored to management’s estimate.

MITIGATING THE EFFECTS OF JUDGMENT BIASES

The most important step in avoiding judgment traps and reducing bias caused by subconscious mental shortcuts
or self-interest is “awareness.” By better understanding traps and biases, and recognizing common situations
where they are likely to present themselves, we can identify potential problems and often formulate logical
steps to improve our judgment. If we don’t have any idea where the common judgment traps are, or where we
are likely to be systematically biased, we do not even have a starting point. As we said earlier, some of the most
serious judgment traps have to do with the failure to follow a judgment process. In other words, we might be
influenced by a judgment trigger, solve the wrong problem, fail to clarify our objectives, or push too quickly
through the initial steps in the judgment process because we want to quickly arrive at a solution or conclusion.
In terms of mitigating bias, the first step is to recognize situations where we might be vulnerable. Awareness,
coupled with the terminology to identify and label the potential traps and biases, is key to improving judgment.
In fact, research exploring mitigation techniques suggests that simply providing instructions to decision makers
about the seriousness of a bias can reduce the effect of these biases.
While a thorough discussion of potential ways to mitigate biases is beyond the scope of this professional
judgment introduction, here are a few examples. Actively questioning our assumptions, which might include
considering potentially disconfirming evidence or seeking more complete information, is a key approach in
mitigating all of the judgment biases. Consulting with others can go a long way toward mitigating the effects
of the availability tendency. Getting an outside view on a going-concern uncertainty assessment can help keep
the auditor’s judgment from being too optimistic, or pessimistic, given recent, salient experiences. In other
judgment and decision tasks, a helpful approach is to ask others to gather and evaluate information without
revealing our preference.We would not want to reveal our preference to others before getting their perspectives
because our preference may affect their judgment just like it may affect our own. We can also take steps to
objectively evaluate the pros and cons for each alternative. In mitigating bias related to the anchoring tendency,
it can be helpful to seek out and explicitly consider alternative anchors.
The bottom line is that we need to realize where and how we may be biased in order to develop simple
approaches for mitigating the effects of those biases. And the good news is that once you are aware of traps
and biases, the mitigation approach often is a matter of applying logic and common sense. Bias-mitigation
techniques are important, but just as important in avoiding traps and mitigating bias is to bake the steps of good
judgment, such as those provided in the KPMG Professional Judgment Framework, into your judgment-making
process. Thoughtfully applying the steps of a judgment process can in itself mitigate bias. And, finally, in auditing,
the requirement to conclude and document provides the auditor the opportunity to carefully reconsider the
preceding steps of good judgment and the possibility that judgment traps or biases may have influenced the final
conclusion.

CONCLUSION
Professional judgment is an increasingly important subject in accounting and auditing. As accounting standards
become more subjective and fair value measurement increasingly takes center stage, professionals will be
required to apply more and better professional judgment on a consistent basis. In reality, none of us will ever
make perfect judgments or be completely free from bias or from judgment traps. But by becoming aware of
where we can fall prey to such influences and by practicing common sense mitigation techniques, including the
steps in a judgment process, we can improve the quality of our professional judgment. And this, more than just
about anything else you can do, will set you apart as an outstanding professional.
For more in-depth information about professional judgment in auditing, including additional coverage
of judgment traps and biases, judgment in groups, and other topics, see the award-winning monograph, Elevating
Professional Judgment in Auditing and Accounting:The KPMG Professional Judgment Framework, available without charge
at http://www.kpmguniversityconnection.com.

© 2019 Pearson Education, Inc. 7

 Section 1 | Auditing
Introduction Cash, Fair
| Professional Value, and Revenues
Judgment
RE Q U IR E D
[1] Identify and describe two common judgment traps.
[2] How can considering multiple judgment frames enhance an auditor’s professional skepticism? Explain and
give an example.
[3] What is the first step in avoiding traps or reducing bias? Briefly explain why this first step is so important.
[4] Identify and briefly describe three potential ways to mitigate the effects of biases.

D I S C U S S IO N CA S ES
The following discussion cases provide opportunity to apply the principles presented in this Professional
Judgment Introduction.
[5] An audit engagement team is planning for the upcoming audit of a client who recently underwent a
significant restructuring of its debt. The restructuring was necessary as economic conditions hampered the
client’s ability to make scheduled re-payments of its debt obligations. The restructured debt agreements
included new debt covenants. In auditing the debt obligation in the prior year (before the restructuring),
the team established materiality specific to the financial statement debt account (account level materiality)
at a lower amount than overall financial statement materiality. In planning the audit for the current year, the
team plans to use a similar materiality level. While such a conclusion might be appropriate, what judgment
trap(s) might the team fall into and which step(s) in the judgment process are most likely affected?
[6] A client is determining its accounting treatment for new types of long-term contracts. Consider the
differences in outcome for the two scenarios that follow regarding the approach the client and auditor
took. How does framing relate to the two different scenarios?
 Scenario A: The client entered into a large number of long-term sales contracts and recorded
revenue using an approach they determined was the preferred approach, with no consultation or
discussion with the audit engagement team. The engagement team conducted revenue recognition
testing to ensure that the client correctly followed the chosen approach. The engagement team noted
that the client consistently and accurately applied the approach and determined that the audit testing
supported the amount of revenue reported by the client.
 Scenario B: Before entering into long-term contracts with customers, the client reached out to
the audit engagement team to discuss the client’s preferred approach for recognizing revenue. The
team researched authoritative accounting standards and considered the client’s preferred alternative.
The team also considered other possible approaches and consulted with other engagement teams
with experience in accounting for long-term contracts. Based on this process, the engagement team
determined that although the client’s preferred approach had merit, another alternative was more
consistent with accounting principles for revenue recognition. The client carefully reconsidered
the situation and ultimately decided to use the alternative suggested by the engagement team to
recognize revenue associated with the long-term contracts they entered into.
[7] For each of the two audit situations below, determine which judgment shortcut or tendency is most
prevalent and briefly describe the likely consequences of using the shortcut.
[a] A staff auditor is testing accounts payable balances. The auditor observes an unexpected fluctuation in
the account balance compared to the prior year. The client happens to be walking by, so the auditor
asks the client about the fluctuation. The client provides a plausible and reasonable explanation. In
considering other possible causes for the fluctuation, the client’s explanation seems to be the most
likely, so the staff auditor documents it as evidence supporting the fluctuation. Later, it is determined
that other facts encountered during the audit do not support the client’s explanation.

8 © 2019 Pearson Education, Inc.

Another random document with
no related content on Scribd:
course this silence means something, and perhaps Christopher had
good reasons for never speaking of the voyage even to his son.
Probably he was deathly sea-sick, and in that condition was severely
kicked for not being able to lay his hand at a moment’s warning upon
the starboard main-top-gallant-studding-sail tripping-line, or other
abstruse rope. At all events, he always abstained from telling stories
beginning, “I reck’lect on my first v’yge;” and we may be sure that he
would never have put such an unseamanlike constraint upon his
tongue unless he knew that the less he said about that voyage the
better.
[Æt. 23; 1459–70]

He had been a sailor for some years when he joined a vessel

forming part of an expedition fitted out in Genoa in 1459 by a certain
Duke of Calabria named John of Anjou, who wanted to steal the
kingdom of Naples in order to give it to his father, René, Count of
Provence. So pious a son naturally commanded universal respect,
and Genoa provided him with ships and lent him money. The
expedition was very large, and the old Admiral Colombo, with whom
Christopher sailed, probably commanded the Genoese contingent.
The fleet cruised along the Neapolitan coast, and sailed in and out
the Bay of Naples any number of times, but owing to a fear of the
extortions of the Neapolitan hack-drivers and valets-de-place, there
seems to have been no attempt made to land at Naples. For four
years John of Anjou persevered in trying to conquer Naples, but in
vain; and at the end of that time he must have had a tremendous bill
to pay for his Genoese ships.
While engaged in this expedition, Christopher was sent in
command of a vessel to Tunis, where he was expected to capture a
hostile galley. Carefully reading up his “Midshipman Easy” and his
“Blunt’s Coast Pilot,” he set sail; but on reaching the island of San
Pedro, which can easily be found on any map where it is mentioned
by name, he learned that there were also in the harbor of Tunis two
ships and a carrick; whereupon his crew remarked that they did not
propose to attack an unlimited quantity of vessels, but that if
Columbus would put into Marseilles and lay in a few more ships to
accompany them, they would gladly cut out all the vessels at Tunis.
Columbus was determined not to go to Marseilles,—though he does
not definitely say that he owed money to the keeper of a sailor
boarding-house there,—but he was unable to shake the resolution of
his crew. He therefore pretended to yield to their wishes and set sail
again, ostensibly for Marseilles. The next morning, when the crew
came on deck, they found themselves near the Cape of Carthagena,
and perceived that their wily commander had deceived them.
[Æt. 23–34; 1459–70]

This story is told by Columbus himself, and it awakens in the

mind of the intelligent reader some little doubt of the narrator’s
veracity. In the first place, he admits that he deceived his sailors, and
hence we have no certainty that he was not trying to deceive the
public when telling the story of the alleged deception. In the second
place, it is scarcely probable that all the crew promptly “turned in” at
sunset, leaving Columbus himself at the wheel; but unless this was
done, the compass or the stars must have told them that the ship
was not laying the proper course for Marseilles. Finally, Columbus, in
his exultation at having deceived his crew, does not so much as
mention Tunis, or the hostile vessels which it was his duty to attack,
nor does he tell us what business he had at the Cape of Carthagena.
We are thus justified in assuming that the story is not entirely
credible. Years afterward, on his first transatlantic voyage, Columbus
deceived his men concerning the number of leagues they had sailed,
and this exploit was so warmly commended by his admirers that he
may have been tempted to remark that he always made a point of
deceiving sailors, and may thereupon have invented this earlier
instance as a case in point. Still, let us not lightly impugn his veracity.
Perhaps he really did tell the truth and deceive his sailors; but
whether he did or not, we should still remember that many of us are
merely human, and that had we been in the place of Columbus we
might have said and done a variety of different things.
What became of Columbus during several subsequent years, we
have no trustworthy account. In all probability he continued to follow
the sea, and perhaps caught up with it now and then. We know,
however, that at one time he commanded a galley belonging to a
squadron under the command of Colombo the Younger, a son of the
Colombo with whom Christopher sailed in the Neapolitan expedition.
This squadron, falling in with a Venetian fleet somewhere off the
Portuguese coast, immediately attacked it, Venice and Genoa being
at that time at war. In the course of the battle the galley of Columbus
was set on fire, and as he had no available small-boats—a fact
which must forever reflect disgrace upon the Genoese Navy
Department—he was compelled to jump overboard with all his crew.
He seems to have lost all interest in the battle after the loss of his
galley, and he therefore decided to go ashore. He was six miles from
land, but with the help of an oar which he put under his breast he
swam ashore without difficulty, and when we consider that he was
dressed in a complete suit of armor, it is evident that he must have
been a very fine swimmer.
It should be mentioned that, although this story is told by
Fernando Columbus, certain carping critics have refused to believe
it, on the paltry pretext that, inasmuch as the naval fight in question
took place several years after Columbus is known to have taken up
his residence in Portugal, he could not have landed in that country
for the first time immediately after the battle. This is mere trifling. If
Columbus could swim six miles in a suit of heavy armor, and, in all
probability, with his sword in one hand and his speaking-trumpet in
the other, he could easily have performed the simpler feat of residing
in Portugal several years before he reached that country. The truth
is, that historians are perpetually casting doubt upon all legends of
any real merit or interest. They have totally exploded the story of
Washington and the cherry-tree, and they could not be expected to
concede that Fernando Columbus knew more about his father than
persons living and writing four hundred years later could know. As to
Columbus’s great swimming feat, they have agreed to disbelieve the
whole story, and of course the public agrees with them.
 CHAPTER II.
FIRST PLANS OF EXPLORATION.

[Æt. 34; 1470]

IT is at Lisbon that we are able for the first time to put our finger
decisively upon Columbus. The stray glimpses which we catch of
him before that time, whether at Genoa, Pavia, Naples, or Cape
Carthagena, are fleeting and unsatisfactory; his trustworthy
biography begins with his residence at Lisbon. He reached there, we
do not know by what route, in the year 1470, having no money and
no visible means of support. Instead of borrowing money and buying
an organ, or calling on the leader of one of the Lisbon political “halls”
and obtaining through his influence permission to set up a peanut
stand, he took a far bolder course—he married. Let it not be
supposed that he represented himself to be an Italian count, and
thereby won the hand of an ambitious Portuguese girl. The fact that
he married the daughter of a deceased Italian navigator proves that
he did not resort to the commonplace devices of the modern Italian
exile. Doña Felipa di Perestrello was not only an Italian, and as such
could tell a real count from a Genoese sailor without the use of
litmus paper or any other chemical test, but she was entirely without
money and, viewed as a bride, was complicated with a mother-in-
law. Thus it is evident that Columbus did not engage in matrimony as
a fortune-hunter, and that he must have married Doña Felipa purely
because he loved her. We may explain in the same way her
acceptance of the penniless Genoese; and the fact that they lived
happily together—if Fernando Columbus is to be believed—makes it
clear that neither expected anything from the other, and hence
neither was disappointed.
 The departed navigator, Di Perestrello, had been in the service
of the Portuguese king, and had accumulated a large quantity of
maps and charts, which his widow inherited. She does not appear to
have objected to her daughter’s marriage, but the depressed state of
Columbus’s fortunes at this period is shown by the fact that he and
his wife went to reside with his mother-in-law, where he doubtless
learned that fortitude and dignity when exposed to violence and
strong language for which he afterwards became renowned. Old
Madame Perestrello did him one really good turn by presenting him
with the maps, charts, and log-books of her departed husband, and
this probably suggested to him the idea which he proceeded to put
into practice, of making and selling maps.
Map-making at that time offered a fine field to an imaginative
man, and Columbus was not slow to cultivate it. He made beautiful
charts of the Atlantic Ocean, putting Japan, India, and other
desirable Asiatic countries on its western shore, and placing
quantities of useful islands where he considered that they would do
the most good. These maps may possibly have been somewhat
inferior in breadth of imagination to an average Herald map, but they
were far superior in beauty; and the array of novel animals with
which the various continents and large islands were sprinkled made
them extremely attractive. The man who bought one of Columbus’s
maps received his full money’s worth, and what with map-selling,
and occasional sea voyages to and from Guinea at times when
Madame Perestrello became rather too free in the use of the stove-
lid, Columbus managed to make a tolerably comfortable living.
The island of Porto Santo, then recently discovered, lay in the
track of vessels sailing between Portugal and Guinea, and must
have attracted the attention of Columbus while engaged in the
several voyages which he made early in his married life.
It so happened that Doña Felipa came into possession, by
inheritance, of a small property in Porto Santo, and Columbus
thereupon abandoned Lisbon and with his family took up his
residence on that island. Here he met one Pedro Correo, a bold
sailor and a former governor of Porto Santo, who was married to
Doña Felipa’s sister. Columbus and Correo soon became warm
friends, and would sit up together half the night, talking about the
progress of geographical discovery and the advantages of finding
some nice continent full of gold and at a great distance from the
widow Perestrello.
At that time there were certain unprincipled mariners who
professed to have discovered meritorious islands a few hundred
miles west of Portugal; and though we know that these imaginative
men told what was not true, Columbus may have supposed that their
stories were not entirely without a basis of truth. King Henry of
Portugal, who died three years after Columbus arrived at Lisbon, had
a passion for new countries, and the fashion which he set of fitting
out exploring expeditions continued to prevail after his death.
There is no doubt that there was a general feeling, at the period
when Columbus and Correo lived at Porto Santo, that the discovery
of either a continent on the western shore of the Atlantic, or a new
route to China, would meet a great popular want. Although the
Portuguese had sailed as far south as Cape Bojador, they believed
that no vessel could sail any further in that direction without meeting
with a temperature so great as to raise the water of the ocean to the
boiling-point, and it was thus assumed that all future navigators
desirous of new islands and continents must search for them in the
west. The more Columbus thought of the matter, the more firmly he
became convinced that he could either discover valuable islands by
sailing due west, or that at all events he could reach the coast of
Japan, China, or India; and that it was clearly the duty of somebody
to supply him with ships and money and put him in command of an
exploring expedition. With this view Correo fully coincided, and
Columbus made up his mind that he would call on a few respectable
kings and ask them to fit out such an expedition.
[Æt. 34; 1474]

Fernando Columbus informs us that his father based his

conviction that land could be found by sailing in a westerly direction,
upon a variety of reasons. Although many learned men believed that
the earth was round, the circumference of the globe was then
unknown; and as every one had therefore a right to call it what he
chose, Columbus assumed that it was comparatively small, and that
the distance from the Cape Verde Islands eastward to the western
part of Asia was fully two thirds of the entire circumference. He also
assumed that the remaining third consisted in great part of the
eastern portion of Asia, and that hence the distance across the
Atlantic, from Portugal to Asia, was by no means great. In support of
this theory he recalled the alleged fact that various strange trees and
bits of wood, hewn after a fashion unknown in Europe, had from time
to time been cast on the European shores, and must have come out
of the unknown west.
This theory, founded as it was upon gratuitous assumptions, and
supported by driftwood of uncertain origin and doubtful veracity, was
regarded by Columbus as at least the equal of the binomial theorem
in credibility, and he felt confident that the moment he should bring it
to the attention of an enterprising king, that monarch would instantly
present him with a fleet and make him Governor-General of all lands
which he might discover.
It was the invariable custom of Columbus to declare that his
chief reason for desiring to discover new countries was, that he
might carry the Gospel to the pagan inhabitants thereof, and also
find gold enough to fit out a new crusade for the recovery of the Holy
Sepulchre. Whether old Pedro Correo winked when Columbus spoke
in this pious strain, or whether Doña Felipa, with the charming
frankness of her sex, remarked “fiddlesticks!” we shall never know.
[Æt. 38; 1474]

Perhaps Columbus really thought that he wanted to dispense the

Gospel and fight the Mahometans, and that he did not care a straw
about becoming a great explorer and having the State capital of Ohio
named for him; but his fixed determination not to carry a particle of
Gospel to the smallest possible pagan, except upon terms highly
advantageous to his pocket and his schemes of personal
aggrandizement, is scarcely reconcilable with his pious
protestations. His own church decided, not very long ago, that his
moral character did not present available materials for the
manufacture of a saint, and it is only too probable that the church
was right.
 It is a curious illustration of the determination of his biographers
to prove him an exceptionally noble man, that they dwell with much
emphasis upon his stern determination not to undertake any
explorations except upon his own extravagant terms. To the
unprejudiced mind his conduct might seem that of a shrewd and
grasping man, bent upon making a profitable speculation. The
biographers, however, insist that it was the conduct of a great and
noble nature, caring for nothing except geographical discovery and
the conversion of unlimited heathen.
About this time Columbus is believed to have written a great
many letters to various people, asking their candid opinion upon the
propriety of discovering new continents or new ways to old Asiatic
countries. Paulo Toscanelli, of Florence, a leading scientific person,
sent him, in answer to one of his letters, a map of the Atlantic and
the eastern coast of Asia, which displayed a bolder imagination than
Columbus had shown in any of his own maps, and which so
delighted him that he put it carefully away, to use in case his dream
of exploration should be realized. Toscanelli’s map has proved to be
of much more use to historians than it was to Columbus, for the letter
in which it was enclosed was dated in the year 1474, and it thus
gives us the earliest date at which we can feel confident Columbus
was entertaining the idea of his great voyage.
[Æt. 45; 1481]

How long Columbus resided at Porto Santo we have no means

of knowing; neither do we know why he left that place. It is certain,
however, that he returned to Lisbon either before or very soon after
the accession of King John II. to the Portuguese throne, an event
which took place in 1481. Meanwhile, as we learn from one of his
letters, he made a voyage in 1477 to an island which his biographers
have agreed to call Iceland, although Columbus lacked inclination—
or perhaps courage—to call it by that name. He says he made the
voyage in February, and he does not appear to have noticed that the
water was frozen. The weak point in his narrative—provided he
really did visit Iceland—is his omission to mention how he warmed
the Arctic ocean so as to keep it free of ice in February. Had he only
given us a description of his sea-warming method, it would have
been of inestimable service to the people of Iceland, since it would
have rendered the island easily accessible at all times of the year,
and it would also have materially lessened the difficulty which
explorers find in sailing to the North Pole. It is probable that
Columbus visited some warmer and easier island than Iceland—say
one of the Hebrides. In those days a voyage from southern Europe
to Iceland would have been a remarkable feat, and Columbus would
not have failed to demand all the credit due him for so bold an
exploit.
The immediate predecessor of King John—King Alfonso—
preferred war to exploration, and as he was occupied during the
latter part of his reign in a very interesting war with Spain, it is
improbable that Columbus wasted time in asking him to fit out a
transatlantic expedition. There is a rumor that, prior to the accession
of King John II., Columbus applied to Genoa for assistance in his
scheme of exploration, but the rumor rests upon no evidence worth
heeding.
Genoa, as every one knows, was then a republic. It needed all
its money to pay the expenses of the administration party at
elections, to improve its inland harbors and subterranean rivers, and
to defray the cost of postal routes in inaccessible parts of the
country. Had Columbus asked for an appropriation, the Genoese
politicians would have denounced the folly and wickedness of
squandering the people’s money on scientific junketing expeditions,
and would have maintained that a free and enlightened republic
ought not to concern itself with the effete and monarchical countries
of Asia, to which Columbus was anxious to open a new route.
Moreover, Columbus had been absent from Genoa for several
years. He had no claims upon any of the Genoese statesmen, and
was without influence enough to carry his own ward. An application
of any sort coming from such a man would have been treated with
deserved contempt; and we may be very sure that, however much
Columbus may have loved the old Genoese flag and desired an
appropriation, he had far too much good sense to dream of asking
any favors from his fellow-countrymen. Undoubtedly he was as
anxious to start in search of America while he lived at Porto Santo as
he was at a later period, but he knew that only a king would feel at
liberty to use public funds in what the public would consider a wild
and profitless expedition; and as there was no king whom he could
hope to interest in his scheme, he naturally waited until a suitable
king should appear.
The death of Alfonso provided him with what he imagined would
prove to be a king after his own heart, for King John was no sooner
seated on the throne than he betrayed an abnormal longing for new
countries by sending explorers in search of Prester John.
[Æt. 45; 1481–82]

This Prester John was believed to be a Presbyterian deacon

who ruled over a civilized and Christian kingdom which he kept
concealed either about his person or in some out-of-the-way part of
the world. The wonderful credulity of the age is shown by this belief
in a Presbyterian king whom no European had ever seen, and in a
kingdom of which no man knew the situation. It ought to have
occurred to the Portuguese king that, even if he could find this
mythical monarch, he would not take any real pleasure in his society,
unless he were to burn him. King John II. was a pious Roman
Catholic, and, next to a Methodist, a Presbyterian king would have
been about the most uncongenial acquaintance he could have
made. Nevertheless, this Presbyterian myth was indirectly of great
service to Columbus.
King John, in order to facilitate his search for Prester John,
asked a scientific commission to invent some improvements in
navigation, the result of which was the invention of the astrolabe, a
sort of rudimentary quadrant, by means of which a navigator could
occasionally find his latitude. This invention was hardly inferior in
value to that of the compass, and it is generally said to have
provided Columbus with the means of finding his way across the
Atlantic and back to Europe.
[Æt. 45–46; 1482–84]

Next to the discovery of Prester John, the Portuguese king

desired to discover a route by sea to India. He believed with his
deceased grand-uncle, Prince Henry, that Africa could be
circumnavigated—provided the circumnavigators could avoid being
boiled alive south of Cape Bojador—and that a road to India could
thus be found. It was manifest that he was just the sort of monarch
for Columbus’s purposes. He was so anxious to make discoveries
that he would have been delighted even to find a Presbyterian. He
was particularly bent upon finding a route to India, and he was only
twenty-five years old. He was the very man to listen to a solemn and
oppressive mariner with his pockets full of maps and his mind full of
the project for a transatlantic route to India. Columbus was now
about forty-six years old, and his beard was already white. He had
dwelt so long upon the plan of crossing the Atlantic that he
resembled the Ancient Mariner in his readiness to button-hole all
sorts of people and compel them to listen to his project. Mrs.
Perestrello appears to have been safely dead at this time, and Pedro
Correo had probably been talked to death by his relentless brother-
in-law. Still, Columbus was as anxious to carry out his plan as ever.
He marked young King John as his prey, and finally obtained an
audience with him.
 CHAPTER III.
IN SEARCH OF A PATRON.

[Æt. 45–46; 1482–84]

WE have two accounts of the interview between Columbus and

the King—one written by Fernando Columbus, and the other by Juan
de Barros, an eminent geographer. Fernando says that the King
listened with great delight to the project of Columbus, and only
refrained from instantly giving him the command of an expedition
because he did not feel ready to consent to Columbus’s conditions.
De Barros says that King John finally professed that he approved of
Columbus’s views merely to get rid of that persistent mariner.
However this may be, the King referred the whole matter to a
committee, with power to send for maps and things. The committee
consisted of two geographers—who of course hated Columbus with
true scientific hatred—and the King’s confessor, the Bishop of Ceuta.
It did not take very long for the committee to decide that Columbus
was a preposterous person, and that his project was impracticable.
The King then referred the matter to his council, where it was hotly
debated. The Bishop of Ceuta took the broad, general ground that
exploration was an idle and frivolous occupation; that no men of
sense wanted any new countries; and that if the King must have
amusement, the best thing he could do would be to make war upon
the Moors.
Don Pedro de Meneses replied with much vigor, hurling back the
Bishop’s accusations against exploration, and nailing his reverence’s
misstatements as boldly as if the two were rival Congressmen. As for
himself, Don Pedro said, he liked new continents, and believed that
Portugal could not have too many of them. He considered Columbus
a great man, and felt that it would be a precious privilege for other
people to aid in the proposed transatlantic scheme.
Nevertheless, the council decided against it, much, we are told,
to the King’s disappointment.
The Bishop of Ceuta, in spite of his remarks at the meeting of
the committee, evidently thought there might be something in
Columbus’s plan after all. He therefore proposed to the King that
Columbus should be induced to furnish written proposals and
specifications for the discovery of transatlantic countries, and that
with the help of the information thus furnished the King should
secretly send a vessel to test the practicability of the scheme. This
was done, but the vessel returned after a few days, having
discovered nothing but water.
[Æt. 46–48; 1484]

As soon as Columbus heard of this trick he became excessively

angry, and resolved that King John should never have a square foot
of new territory, nor a solitary heathen soul to convert, if he could
help it. Accordingly, he broke off his acquaintance with the King, and
proposed to leave Lisbon, in the mean time sending his brother
Bartholomew to England to ask if the English King would like to order
a supply of new islands or a transatlantic continent. His wife had
already succumbed to her husband’s unremitting conversation
concerning explorations, and died, doubtless with much resignation.
Madame Perestrello, Pedro Correo, and Mrs. Columbus were
probably only a few of the many unhappy Portuguese who suffered
from the fatal conversational powers of Columbus, and Portugal may
have become rather an unsafe place for him. This would account for
the stealthy way in which he left that kingdom, and is at least as
probable as the more common theory that he ran away to escape his
creditors.
It was in the year 1484 that Columbus, accompanied by his son
Diego, shook the dust of Portugal from his feet and climbed over the
back-fence into Spain, in the dead of night, instead of openly taking
the regular mail-coach. The King of England had refused to listen to
Bartholomew’s proposals, and King John had been guilty of conduct
unbecoming a monarch and a gentleman. This may have given
Columbus a prejudice against kings, for he made his next
applications to the Dukes of Medina Sidonia and Medina Celi—two
noblemen residing in the south of Spain.
[Æt. 48; 1484–87]

Medina Sidonia listened to Columbus with much interest, and

evidently regarded him as an entertaining kind of lunatic; but after a
time he became seriously alarmed at the Italian’s inexhaustible
capacity for talk, and courteously got rid of him before sustaining any
permanent injury. The Duke of Medina Celi was a braver man, and
not only invited Columbus to come and stay at his house, but
actually spoke of lending him ships and money. He changed his
mind, however, and told Columbus that he really could not take the
liberty of fitting out an expedition which ought to be fitted out by a
king. Columbus then remarked that he would step over to France
and speak to the French King about it; whereupon the Duke hastily
wrote to Queen Isabella, of Castile and Aragon, mentioning that he
had a mariner of great merit in his house, whom she really ought to
see. The Queen graciously wrote, requesting the Duke to forward his
ancient mariner to the royal palace at Cordova, which he accordingly
did, furnishing Columbus at the same time with a letter of
introduction to Her Majesty.
Spain was then merely a geographical expression. Ferdinand,
King of Aragon, had recently married Isabella, Queen of Castile, and
their joint property was called the Kingdom of Castile and Aragon;
for, inasmuch as the Moors still ruled over the southern part of the
peninsula, it would have been indelicate for Ferdinand and his queen
to pretend that they were the monarchs of all Spain.
When Columbus reached Cordova he found that their majesties
were on the point of marching against the Moors, and had no time to
listen to any plans of exploration. Before starting, however, the
Queen deposited Columbus with Alonzo de Quintanilla, the treasurer
of Castile, and, we may presume, took a receipt for him. Quintanilla,
an affable old gentleman, was much pleased with Columbus, and
soon became a warm advocate of his theories. He introduced the
navigator to several influential friends, and Columbus passed the
summer and winter very pleasantly.
At Cordova he also met a young person named Beatrix
Enriquez, to whom he became much attached, and who was
afterward the mother of his son Fernando. She probably had her
good qualities; but as Columbus was so much preoccupied with his
transatlantic projects he forgot to marry her, and hence she is
scarcely the sort of young person to be introduced into a virtuous
biography.
[Æt. 48–51; 1484–87]

During the same winter the King and Queen held their court at
Salamanca, after having made a very brilliant foray into the Moorish
territory, and having also suppressed a rebellion in their own
dominions. Columbus went to Salamanca, where he made the
acquaintance of Pedro Gonsalvez de Mendoza, the Cardinal-
Archbishop of Toledo, who was decidedly the most influential man in
the kingdom. When Columbus first mentioned his project, the
Cardinal told him the Scriptures asserted that the earth was flat, and
that it would be impious for him to prove it was round; but Columbus
soon convinced him that the Church would be greatly benefited by
the discovery of gold-mines all ready to be worked, and of heathen
clamoring to be converted, and thus successfully reconciled science
and religion. The Cardinal heartily entered into his scheme, and soon
obtained for him an audience with the King.
Columbus says that on this occasion he spoke with an
eloquence and zeal that he had never before displayed. The King
listened with great fortitude, and when Columbus temporarily paused
in his oration had still strength enough left to dismiss him with a
promise to refer the matter to a scientific council. In pursuance of this
promise he directed Fernando de Talavera, the Queen’s confessor,
to summon the most learned men of the kingdom to examine
Columbus thoroughly and decide upon the feasibility of his plan. As
for the Queen, she does not appear to have been present at the
audience given to Columbus, either because her royal husband
considered the female mind incapable of wrestling with geography,
or because he did not think her strong enough to endure Columbus’s
conversation.
The scientific Congress met at Salamanca without any
unnecessary delay, and as few people except priests had any
learning whatever at that period, the Congress consisted chiefly of
different kinds of priests. They courteously gave Columbus his
innings, and listened heroically to his interminable speech, after
which they proceeded to demonstrate to him that he was little better
than a combined heretic and madman. They quoted the Bible and
the opinions of the Fathers of the church in support of the theory that
the earth was flat instead of round.
When Columbus in his turn proved that the Bible and the Fathers
must be understood in a figurative sense, the priests then took the
ground that if the world was round, Columbus could not carry
enough provisions with him to enable him to sail around it, and that
he could not sail back from his alleged western continent unless his
vessels could sail up-hill.
Gradually the more sensible members of the congress came to
the conclusion that it would be better to agree to everything
Columbus might propose, rather than listen day after day to his
appalling eloquence. Still, the majority were men of ascetic lives and
great physical endurance, and they showed no disposition to yield to
argument or exhaustion. The sessions of the Congress were thus
prolonged from day to day, and Columbus was kept in a painful state
of suspense. Little did he imagine that in the land which he was
destined to discover, another Congress would meet, not quite four
hundred years later, and would even surpass the Congress of
Salamanca in the tediousness and uselessness of its debates.
 CHAPTER IV.
HE RECEIVES HIS COMMISSION.

[Æt. 51; 1489]

THE spring of 1487 arrived, and the Council of Salamanca had

not yet made its report. The King and Queen, who seem to have
required an annual Moorish war in order to tone up their systems, set
out to besiege Malaga early in the spring, taking De Talavera with
them, so that he might be on hand to confess the Queen in case she
should find it desirable to commit a few sins and require subsequent
absolution. The departure of De Talavera interrupted the sittings of
the Council, and left Columbus without any regular occupation.
During the siege of Malaga he was more than once summoned to
the camp, ostensibly to confer with the court upon his famous
project, but the proposed conferences never took place. He became
so tired of the suspense in which he was kept, that he wrote to King
John of Portugal, giving him one more chance to accede to his
transatlantic plans. Not only did King John answer his letter and ask
him to come to Lisbon, but King Henry VII. of England also wrote to
him, inviting him to come to England and talk the matter over. At
least, Columbus says that those two kings wrote to him; though the
fact that he did not accept their invitations, but preferred to waste his
time in Spain, casts a little doubt upon his veracity. It is certainly
improbable that he would have waited for years in the hope of
another interview with Ferdinand and Isabella, if at the same time
two prominent kings were writing to him and urging him to bring his
carpet-bag and make them a nice long visit.
In the spring of 1489 Columbus was summoned to Seville, and
was positively assured that this time he should have a satisfactory
conference with a new assortment of learned men. But no sooner
had he reached Seville than the King and Queen suddenly
remembered that they had not had their usual spring war, and
thereupon promptly started to attack the Moors. Columbus went with
them, and fought with great gallantry. Probably it was in some
measure due to a dread of his awful conversational powers that the
Moorish king surrendered, and it is to the honor of the Christian
monarchs that they did not abuse their victory by permitting
Columbus to talk to the royal prisoner.
Another year passed away, and still Columbus was waiting for a
decision upon the feasibility of his plan. In the spring of 1491 he
finally became so earnest in demanding a decision, that the King
directed De Talavera and his learned friends to make their long-
delayed report. They did so, assuring the King that it would be
absurd for him to waste any money whatever in attempting to carry
out the Italian’s utterly ridiculous plan. Still Ferdinand did not care to
drive Columbus to despair, but politely informed him that after he
should have finished the annual Moorish war upon which he was just
about to enter, he would really try to think of the propriety of fitting
out an expedition.
Columbus had now been nearly seven years in Spain, waiting for
the King to come to a final decision; and this last postponement
exhausted his patience. The court had from time to time supplied
him with money; but he was not willing to spend his life as a
pensioner on the royal bounty, while the western continent was
vainly calling to him to come over and discover it. He therefore left
Seville, with the resolution to have nothing further to do with Spain,
but to proceed to France and try what he could do with the French
king.
He seems to have journeyed on foot, for the very next time we
hear of him is as a venerable and imposing tramp, accompanied by
an unidentified small-boy, and asking for food—presumably
buckwheat cakes, and eggs boiled precisely three minutes—at the
gate of the convent of Santa Maria de Rabida.
[Æt. 55; 1491]
 The Prior of the convent, Juan Perez de Marchena, happened to
notice him, and entered into conversation with him. Columbus told
him his name, and mentioned that he was on his way to a
neighboring town to find his brother-in-law; from which we learn that
four hundred years ago the myth of a brother-in-law in the next town
was as familiar to the tramps of that period as it is to those of the
present day. As the Prior listened to this story without making any
remarks upon its improbability, Columbus was tempted to launch into
general conversation, and in a few moments told him all about his
desire to find a transatlantic continent, and his intention of offering to
the King of France the privilege of assisting him.
Doubtless the good friar found his convent life rather
monotonous, and perceiving vast possibilities of conversation in
Columbus, he determined to ask him to spend the night with him.
Columbus, of course, accepted the invitation, and, the Prior sending
for the village doctor, the three spent a delightful evening.
The next day both the Prior and the doctor agreed that
Columbus was really a remarkable man, and that it would be
disgraceful if the French king were to be allowed to assist in
discovering a new continent. The Prior sent for several ancient
mariners residing in the neighboring port of Palos, and requested
them to give their opinion of the matter. With one accord, they
supported the scheme of Columbus with arguments the profundity of
which Captain Bunsby himself might have envied; and one Martin
Alonzo Pinzon, in particular, was so enthusiastic that he offered to
pay the expenses of Columbus while making another application to
the court, and to furnish and take command of a vessel in case the
application should be successful.
[Æt. 55; 1491–92]

The religious interests of the convent must have suffered

somewhat from the Prior’s geographical soirées. It must have
required a great deal of punch to bring those ancient seafaring men
into unanimity upon any subject, and the extent to which Columbus
unquestionably availed himself of the opportunity for unrestrained
conversation must have left the Prior no time whatever for prayers.
He may have excused himself to his own conscience by pretending
that to listen to Columbus was a means of mortifying the flesh; but,
plausible as this excuse was, it could not justify the introduction of
punch, seafaring men, and village doctors into a professedly
religious house.
The upshot of the matter was, that the Prior resolved to write a
letter to the Queen, and old Sebastian Rodriguez, a veteran sailor,
staked the future integrity of his personal eyes upon his delivery of
the letter into the hands of Isabella. The Prior had been formerly the
Queen’s confessor, and of course he knew how to awaken her
interest by little allusions to the sinful secrets that she had committed
to his holy keeping.
The letter was written, and in two weeks’ time Rodriguez brought
back an answer summoning the Prior to court. The good old man
was overjoyed, and immediately went to Santa Fé, where the King
and Queen were stopping, on their way to another Moorish war.
When he was admitted to the Queen’s presence, he conducted
himself with so much discretion, and made so favorable an
impression, that Isabella gave him the magnificent sum of twenty
thousand maravedies, and told him to hand it over to Columbus, and
to send that persistent navigator immediately to her. It is somewhat
of a disappointment to learn that the twenty thousand maravedies
were in reality worth only seventy-two dollars; still they were enough
to enable Columbus to buy a mule and a new spring overcoat, and
thus to appear at court in an impressive manner.
The particular Moorish war upon which the King and Queen
were then engaged was the very last one of the series, and it was
confessedly of so much importance that Columbus did not try to
obtain an audience until it was finished. In the mean time he lived
with his old friend Alonzo de Quintanella, the treasurer.
[Æt. 55–56; 1491–92]

At last the day came when, the war being ended, Columbus was
summoned to meet a committee of which De Talavera appears to
have been the chairman. This time the feasibility of his scheme was
admitted, and it only remained to settle the terms upon which he
would agree to furnish Spain with new continents. Though Columbus