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Drone riders in the sky

Accounting research uses cattle ranches to study drone support of audits
Friday, June 26, 2020 - 9:49am
Merritt Melancon
Drone cattle graphic


  • The study examined the quality and efficiency of using drones and counting software to inventory livestock.
  • At one ranch, drones cut the time it took to take inventory by 97% and also produced a more accurate count.
  • Accountants can translate the lessons learned with cattle to help with other onerous auditing tasks — like counting boxes in a warehouse.

Digital technology has transformed almost every type of work in the last half-century, but on the open range a lot of the heavy lifting is still done by a cowboy and a horse. 

Soon, those cowboys may be getting airborne assistance.

Margaret Christ, a professor in the University of Georgia’s J.M. Tull School of Accounting, took to the range with colleagues from Brigham Young University and Arizona State University to see how drones might speed up the process of counting cattle and decrease the number of auditing errors.

Their findings will be published in an upcoming issue of the Review of Accounting Studies.

The drones, in conjunction with automated counting software for the study, cut the time it took to take inventory at one ranch from 631 to 19 hours. It also produced a more accurate count, Christ said.  

“When you have something like 32,000 cows over acres of land, you normally only sample count, say, 10 percent,” Christ said. “But using this method, we were able to count the full population and redo their 10 percent sample. Cows are big; they’re not getting lost. So the numbers were never way off, but our system was more accurate.”

The eye in the sky doesn’t lie

The commercial development of software that uses artificial intelligence to produce counts was the breakthrough that made this project possible, Christ said.

“The drone basically flies and takes pictures — just like it could for military surveillance or even for recreation. But the combination of the drone and the counting software brings it to the next phase,” Christ said.

Like any other commodities business, cattle ranches keep a constant inventory. The drone-supported system would not only help ranchers keep more precise counts, but could also be used by independent auditors. In addition to the inventory count, the drone footage provides photographic evidence of the count if the audit is called into question.

Christ had never worked with livestock before, but improving inventory systems on the ranch is an essential proof of concept. Also, the findings could help accounting firms audit ranches in the nation’s $67 billion cattle industry.

 “We chose this because it’s already possible for accounting firms to use this technology, and it’s something that has to be done,” Christ said. “Each cow is worth thousands of dollars, so they’re costly assets that are worth counting this way.”

From bovine to boxes

Christ is hoping that accountants can translate the lessons learned with cattle to help complete other onerous auditing tasks — like counting boxes in a warehouse. 

“The next step is to operate a drone inside a warehouse, count the boxes and verify what’s in the boxes,” Christ said. “The drone needs to do more than count the box to guard against fraud, but the technology isn’t there yet.”

Every young auditor, Christ said, has a war story about spending the week after Christmas up on a ladder, counting a warehouse full of boxes to wrap up year-end inventories. Using a drone to replace that kind of low-involvement counting could change that assurance practice forever and allow for more accurate counts, better inventory controls and happier staff accountants.