The scope of an auditor’s job expands constantly. One major aspect of the function is to guard against fraud. Auditors perform a variety to techniques to test for fraud. Two of the most essential fraud discovery techniques are observation and inquiry. Done right, auditors can become valuable organizational assets. Done wrong, auditors can be viewed as overzealous obstacles.
To be successful, auditors must Objective Observe and Inquire for Understanding. I was reminded of this when recently watching the London Olympics. During the men’s gymnastics competition, the judges gave a Japanese gymnast a horrible score for his routine. The battle for bronze hinged on this routine, therefore, making it a very important routine. Japanese official were seen approaching the judges with cash in hand (see photo).
I must admit, my initial thought was, “Wow, did that just happen?” But then the auditor in me began assessing the situation (Observing objectively). Why would he approach the judges with cash in hand at the event in front of the entire world? This did not make sense to me. I thought there must be an explanation. As a result, I asked the only person that I thought would provide the best answer…Google. At which point I was somehow lead to Maggie Henricks’ (a sports writer for Yahoo) tweet who explained that the “money is there to make sure teams don’t make capricious challenges.” You see, teams can challenge judges decisions, but it comes with a price. Teams travel with cash for this exact situation.
Not only was this a good learning experience for about gymnastics, but it also reminded me of the importance of observation and inquiry in the internal auditing profession. We auditors must ensure that we (1) Observe Objectively and (2) Inquire for Understanding.
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