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#85263 - 06/04/03 05:11 PM Language in a audit write-up
MackenzieS Offline
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MackenzieS
Joined: Jul 2002
Posts: 1,722
Oklahoma
Yesterday I finished the audit work on an extensive audit. I have typed up all of the individual exceptions and I am preparing to draft the final report. My dilema is I find myself often using the phrase, "the bank should ......" when refering to my recommendations. I began to change it to "it is recommended", but it doesn't seem appropriate to always use either phrase. What do you guys typically use when stating your findings and making recommendations. I have been doing this for years and all of a sudden I am having a dilema with this one, simply because this was such a large audit, there are more exceptions.

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#85264 - 06/04/03 05:31 PM Re: Language in a audit write-up
Anonymous
Unregistered

I would try using:

"We suggest that....

"We recommend that....

"Management should consider.....

"We feel that controls over...should be strengthened to incorporate..

"Management needs to implement....

Sometimes you just have to repeat phrases for lack of a suitable alternative.

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#85265 - 06/04/03 05:50 PM Re: Language in a audit write-up
MackenzieS Offline
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MackenzieS
Joined: Jul 2002
Posts: 1,722
Oklahoma
I remember long ago when I was an "Audit greenpea" it was explained to me that the audit function was not to TELL the bank what it should do, but to make recommendations. This is because they can either implement your recommendations or not, but you can't make them do either. I guess that is where I wonder about the "should" wording. It makes it sound like we are TELLING them what actions to take, instead of "RECOMMENDING" actions to take.

Maybe I am just looking forward to my vacation next week and this isn't that big of an issue, just that we have an ex-auditor in management that always likes to point out these fine little details to me during the discussions of the findings with upper management. I like to be prepared.

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#85266 - 06/04/03 06:36 PM Re: Language in a audit write-up
wlavoie Offline
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wlavoie
Joined: Jul 2002
Posts: 338
Hell's Canyon
I try to stay away from telling others how to fix something. You can say "XX" is a problem that needs to be addressed, internal controls need to be strenghtened for the problem, procedures are weak or missing for the problem, regulations state "XX" needs to be done, etc. I don't know if this is the right way to do it, but that way I don't get many arguments and I'm often asked to help research the best solution.
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#85267 - 06/04/03 06:44 PM Re: Language in a audit write-up
Mickey Offline
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Mickey
Joined: Aug 2002
Posts: 167
FL
I have two sections to my reports. The first(Findings) states the material findings noted during the audit and the second is the(Recommendation) section which lists recommendations. I used to lump it all together but split it out about a year and a half ago and the Audit committee and managers like it that way. Sometimes lumping everything together can make the audit not look as good as it was.
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#85268 - 06/04/03 08:13 PM Re: Language in a audit write-up
DawgFan Offline
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DawgFan
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United States
Quote:

we have an ex-auditor in management that always likes to point out these fine little details to me during the discussions of the findings with upper management. I like to be prepared.




For some reason, that irks me. Anyhow, if you want to argue semantics, "should" seems to me to be a suggestive word. Do you tell your kids that they "should" clean their room, or do you tell them they (must, shall, will, etc.) clean their room? I use the word "should" often, I haven't had a problem with it. Just my two cents.
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#85269 - 06/04/03 09:20 PM Re: Language in a audit write-up
MackenzieS Offline
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MackenzieS
Joined: Jul 2002
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Oklahoma
Quote:

For some reason, that irks me.


Yup, me too.

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#85270 - 06/04/03 10:01 PM Re: Language in a audit write-up
1111 Offline
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1111
Joined: Jan 2003
Posts: 580
What if you do not use any of the noted phrasing? I suggest simply stating the facts, using the FDIC format - no recommendation, no should or should not - simply an exception statement. Of course, management needs to respond to the report. Another method is to state the exception and simply note "Recommendation" under each exception if a recommendation is required within your setting.

Perhaps you are obligation to make recommendations, but if not I would leave the whole thing up to management.

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#85271 - 06/04/03 10:21 PM Re: Language in a audit write-up
Bucko Offline
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Joined: May 2003
Posts: 127
Heartland
What if you state what you find, state the "perfect solution," then let the audit committee decide what changes to make? They'll probably choose something in the middle, but at least you've given them the facts. Isn't that what they want?
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#85272 - 06/05/03 02:50 PM Re: Language in a audit write-up
MackenzieS Offline
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MackenzieS
Joined: Jul 2002
Posts: 1,722
Oklahoma
Quote:

Perhaps you are obligation to make recommendations, but if not I would leave the whole thing up to management.




Yes, it is my responsibility to make recommendations to management for corrective actions.

I do appreciate all of these good responses. It is really enlightening to see all the various methods that internal auditors use to communicate their findings. I have made some modifications here and there and I think it turned out okay. Well will see once it is presented....

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#85273 - 06/05/03 02:57 PM Re: Language in a audit write-up
rexinaudit Offline
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rexinaudit
Joined: Dec 2001
Posts: 292
New England
I characterize my findings as problems, needs, or opportunities. The recommendations are called solutions. It is understood that these are not mandates from internal audit. These solutions often have been discussed with management during the audit and agreed upon then. When violations of laws and regulations are involved, I will cite the requirements of the laws or regulations to support the recommendations.

If I conclude that a solution offered in management's response does not solve the problem, I will discuss with management. If this disagreement is not resolved, then I note it in the report and bring it to the audit committee for resolution.
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#85274 - 06/05/03 03:05 PM Re: Language in a audit write-up
1111 Offline
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1111
Joined: Jan 2003
Posts: 580
Quote:

I characterize my findings as problems, needs, or opportunities. The recommendations are called solutions. It is understood that these are not mandates from internal audit. These solutions often have been discussed with management during the audit and agreed upon then. When violations of laws and regulations are involved, I will cite the requirements of the laws or regulations to support the recommendations.





Now that is a great way to satify the needs of auditors and management. Everyone gets to feel like it's a document to move the bank forward, versus simply assessing the past. It's like a SWOT exercise in the auditing world!

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#85275 - 06/05/03 03:06 PM Re: Language in a audit write-up
Kansayaku Offline
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Joined: Jan 2003
Posts: 1,454
metsuretsu
I use a comment sheet to list my findings and include my recommendations as such on the cover sheet. I have stressed to those who receive my completed audit reports, recommendations are just that. If they do not agree, they are entitled to their opinion. However, I must say that if they do not explain their opinion to me in a way which results in my withdrawal of the recommendation (or at least acceptance of their reasons not to take my recommendation), they will most likely see it again on the next audit report.

I am not meaning this as a "my way or the higway" statement, but more of a "we can't not include something in a disclosure, etc. just because it makes our job easier" statement.
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#85276 - 07/09/03 02:51 PM Re: Language in a audit write-up
WildTurkey Offline
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WildTurkey
Joined: Jan 2003
Posts: 921
Down South, USA
Quote:

I would try using:

"We suggest that....

"We recommend that....

"We feel that controls over...should be strengthened to incorporate.....



I always avoid personalizing a report with "I" or "we" as

(i) it sets up an immediate personal conflict between auditor and auditee; go with "It is was noted....", "It is recommended ...", etc. and

(ii) it looks informal - professional reports and documents are invariably impersonal, as are text books (ones written in the first person (I/we) are unusal and read rather oddly. I have heard that some people don't like it because it makes the writing "dry", well so be it, but it looks more professional.
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#85277 - 07/09/03 03:11 PM Re: Language in a audit write-up
DawgFan Offline
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DawgFan
Joined: Jul 2002
Posts: 1,678
United States
Quote:

I have heard that some people don't like it because it makes the writing "dry", well so be it, but it looks more professional.




Well, audit reports aren't necessarily written (or read) with any sort of entertainment value in mind...
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#85278 - 07/10/03 01:20 PM Re: Language in a audit write-up
krglover Offline
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krglover
Joined: Jun 2002
Posts: 9
Michigan
I use active voice as much as possible, because I think it reads better than passive. My draft reports generally say "I recommend management...". The final report will say "Management will..(whatever they agreed to do)". I find this approach ends up with the best results, because management has already agreed to take the action. If I have a recommendation that management merely consider taking a specific action, that generally would not be in the audit report; I might provide it in a memo or as part of the exception listings.

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#85279 - 07/20/03 05:28 PM Re: Language in a audit write-up
Ross Offline
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Ross
Joined: Apr 2002
Posts: 22
I like to suggest the benefits of following my recommendations. Phrases such as "Fraud risk will be reduced by (taking the recommended action)" are better than "You should (take the recommended action)."

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#85280 - 07/21/03 03:35 PM Re: Language in a audit write-up
MackenzieS Offline
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MackenzieS
Joined: Jul 2002
Posts: 1,722
Oklahoma
Quote:

I like to suggest the benefits of following my recommendations. Phrases such as "Fraud risk will be reduced by (taking the recommended action)" are better than "You should (take the recommended action)."




Thats a good idea. Thanks.

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