As Mary walked into the conference room, she immediately felt an uneasiness in her stomach. She had no idea why she had been selected to participate in an internal audit opening meeting. As she looked around the room, the nervous glances from her coworkers did not reassure her that this would be a good experience.
While sitting quietly watching everyone come in, she noticed that the people were from different departments across the organization. And none of them seemed to know each other or the purpose of an audit opening meeting.
You could feel the tension in the room as they waited for the auditors to arrive.
“Good morning, everyone,” the lead auditor started.
“We’re here to conduct an internal audit of…”
Scanning the room, you could see several people had already checked out before the meeting actually kicked off.
As the auditors began explaining the process, Mary couldn’t help but feel confused. She was just a small part of the company’s operations. And she couldn’t understand why she had been required to attend this meeting and why SHE was being audited. It felt like she had won the unlucky lottery.
As the meeting dragged on, her anxiety increased. She couldn’t shake the feeling that she was in over her head, and she couldn’t help but worry about what the audit would uncover. She heard that sometimes bad things happen after audit reports are released.
Lost in her thoughts, Mary was startled when someone on the other side of the room blurted out, “Why did YOU decide to audit us? We work very hard and cannot understand why you all are picking on us.”
“Yes,” she thought to herself, “Someone said it.”
The auditors responded in our typical audit drivel,
“You were deemed high risk according to our risk assessment.”
“HIGH RISK,” someone yelled out. “I’m not high risk. What do you mean by that? I bust my butt for this company and you’re going to tell me I’m high risk.”
The moans and groans in the room grew.
The auditors attempted to back peddle, but it was too late.
Their business partners/clients were now offended.
Internal audit opening meetings make clients nervous
They made a huge audit entrance meeting mistake.
They neglected to tell the client why they were selected for an audit.
We often take for granted our client’s understanding of our audit process.
Further, we fail to understand the emotional impact of an audit on our clients.
Here’s how clients feel about audits:
- They feel picked on or singled out.
- Many believe it is a punishment for doing wrong
- Others think it is a time-wasting activity taking away from their work
These thoughts and beliefs make your audit clients nervous. And if they come to an audit entrance meeting nervous, it is your job to ease the tension so that you can get the audit done.
Why did you select them for an audit?
I had an experience similar to the one mentioned in the beginning of this article. The client asked, and I told them what every auditor is trained to tell them. I talked about the risk assessment and their high rating on it and how it tied to some grand audit plan. I talked about how we scope the audit universe and test internal controls.
Everything I said was ignored. They focused on one thing.
Of course, they didn’t like being called high risk.
Who would?
But then they asked a question that made me rethink my entire approach to communicating the reason and rationale for selecting audit engagements. And this rethinking changed the entire internal auditing entrance meeting.
They asked, “What makes us high risk?”
Uh oh. What a way to start an opening meeting.
I thought for a moment, and then opened up honestly about the real reasons they were selected for a visit from the auditors.
“Your unit is extremely important to the organization’s operations,” I began. “You contributed several million dollars to the bottom line and the organization depends on your hard work to deliver services to the customer. Because of this, the stakeholders want to make sure you have everything you need to do the job well, and honestly, they want assurance that you are doing the job well.”
The mood in the room immediately changed. I already had a decent relationship with the client, so they were somewhat comfortable opening up to me. The division director looked at me and in a half joking / half serious tone said, “Aw shucks Robert, you think we’re important?”
I smiled and responded sarcastically, “Just a little.”
We all laughed at the exchange.
This lightened the mood and enabled us to ease some fears.
How do you ease audit client concerns?
- Be emotionally honest
Let’s face it, being audited sucks. There are times we are intrusive. Sometimes we ask the same questions multiple times. We take up our client’s time when they could be doing their job. This is a harsh reality of being audited. So why are we not honest enough with our clients to acknowledge this. The process is sometimes grueling and invasive.
A part of our job should be to make it suck less.
I’ve actually told clients this.
And they loved it.
How, you ask?
By being respectful of our client’s time.
By trying to be more strategic with the questions we ask.
By coordinating with one another to reduce redundancies. - Be vulnerable
Our client’s think our goal is to find something wrong on put it on a final report. Anything. And we often reinforce this false stereotype with our actions during audit engagements. We dig and dig and dig. Because there has to be something.
Frankly, I don’t want to always “find something.” I want client areas to be well-controlled. When they are, I’m extremely happy.
Why?
Well, it’s less work for us to do.
Am I wrong?
But our client’s believe that our primary objective is to find something. And, to certain extent, they are right. Our primary objective is to find the TRUTH.
We are not against our clients. So why don’t we communicate that not only with our words, but also with our actions. - Be respectful
Let’s be honest, auditors often see horrible things in an organization. And some auditors sit around and say horrible things about clients. I’ve heard auditors call clients stupid and other names. These arrogant auditors project disrespect to the entire audit team. And clients know it.
BONUS
Don’t wait until the audit entrance conference to start establishing good relationships.
To summarize, one of the biggest internal audit opening conference mistakes is not honestly telling clients why they were selected to be audited. Being audited is a pain. It is our job to ease the tension. Clients feel singled out and picked on. But the real reason they were selected is because what they do is important. We need to communicate that importance in an honest, vulnerable and respectful manner.
Wanna talk more about this? Of course you do.
Check out the episode number 29 of the Audit Bites Podcast titled 3 Audit Entrance Conference Mistakes or get some CPE with the course.
If you like this article, sign up for my newsletter where I deliver regular content. Also, check out the Friday Fraudster, a live podcast discussing fraud and Audit Bites, a podcast discussing audit. Connect with me on LinkedIn.
While you’re here, join our new audit community.
