Like many Americans, last night I was fixated on the Academy Awards ceremony, arguably the most important award show for the motion picture industry. As a CPA, I am intrigued by the secrecy and the process and the related internal controls thereon that lead up to the “And the award goes to…” moment for each category. Last night the unthinkable happened when the Best Picture award was initially incorrectly awarded to the wrong motion picture. So, what went wrong?
One of the main draws of the Oscars is the suspense and surprise as to who will win each category. Because of the secrecy surrounding the awards, only two accounting professional consultants know who the final winners are of each category—and they are the ones who hand out the envelopes from the famed briefcases to the presenters who will announce the winners live onstage. Ultimately, the final balloting process is very manual. As accounting professionals, we are all well aware that any manual process is subject to human error, and good compensating controls are necessary to prevent and detect errors. Last night, the error was quickly caught and corrected, but not before the incorrect motion picture was named, and its cast and crew had begun to celebrate their “win.”
It was a very cringe-worthy moment, but what are the lessons learned? Organizations constantly need to evaluate their accounting processes – especially those surrounding manual processes. For those manual processes, are there compensating controls in place that will prevent an error from occurring in the first place? Is a manual process the best solution for the process? Are there controls in place to detect an error if it has not been corrected promptly? These are all important questions that should be evaluated for any accounting process. Ultimately, even the best-designed manual controls can lead to errors from human mistakes, as evidenced by last night’s Oscars screw-up.
The good news is that ultimately one of the detection controls that was in place caught the mistake, and the award was then awarded to the actual Best Picture award winner, “Moonlight.” The bad news is that even the best-planned manual process is still subject to human error. While the winners of the evening celebrated the night away, I am sure that all those involved in the Oscars balloting process were already at work determining what had occurred, and what controls to add next year to prevent something like this from happening again.