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#98926 - 07/20/03 05:31 PM Improving audit's image
Ross Offline
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Ross
Joined: Apr 2002
Posts: 22
How do you get auditees to view you as a valuable member of the team and not as "the cops"?

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Audit
#98927 - 07/21/03 01:18 PM Re: Improving audit's image
LinMarie Offline
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LinMarie
Joined: Nov 2001
Posts: 243
I am contantly reminding people that we are all on the same team, and that I am here to help not hurt situations. It is a tremendous help if you have the support of senior management and the Board.

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#98928 - 07/21/03 02:25 PM Re: Improving audit's image
Anonymous
Unregistered

I agree with ALM, but it may be a losing battle, especially after you try to win support to your side and then have to write up those same employees/department for any audit findings. But then they need to be concerned enough about their jobs to view reported findings as a necessary means to improve their job performance. It is hard to get someone who is not part of the audit function to see you as the good guy because of their past experiences or unfounded perceptions. Maybe some of these folks have had auditors come to their areas foaming at the mouth, just wanting to find exceptions-this does not help us "good guys" much, but we can sure try to create a better impression. Good question.

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#98929 - 07/21/03 02:25 PM Re: Improving audit's image
Go Royals Offline
Member
Go Royals
Joined: Apr 2003
Posts: 79
Lincoln, Nebraska
Communication is key. I try to never stop at stating the problem and then say "fix-it." As much as possible I try to explain the purpose of the internal control, other procedures, or regulation which has been violated, and the benefit to the individual or department for correcting the issue. Another key is to not merely look for and point out problem areas but also try to point out things being done right (especially if these have had issues in the past.) Listening is also important, allow everyone to respond to each point you make. You may also sometimes get personnel who want to discuss other problems/issues they have in the bank listen to these and (being careful of your independence) help them get these resolved - even if it only means passing the information on to appropriate management. Finally, never be afraid to have a sense of humor - it breaks down more barriers than any thing else.
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Void where prohibited, prohibited where void, void and prohibited where not allowed.

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#98930 - 07/21/03 03:34 PM Re: Improving audit's image
MackenzieS Offline
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MackenzieS
Joined: Jul 2002
Posts: 1,722
Oklahoma
I had to smile when I read the question. Oh, to be loved by all. I learned long ago that auditors are rarely looked favorably upon when you enter an area to conduct a review or audit.

I too tried to figure this one out. What I came up with was a combined approach. This relates to the way I conduct my audits and then the way I chose to run the audit department. First, during my audits I try to allow managers some flexibility to make corrections during the audit so that it doesn't show up on the final audit report. Remember the whole point is to ensure that operations are conducted with adequate controls, within the laws or regulations, and that it is correct.

Next, before I write my final report, I sit with the manager and go over my findings. This allows for dialoge about the exceptions I have found. This also ensures that there is not an explainable reason for the exception. There is nothing worse than writing a report and sending it to the appropriate management and then the manager comes back and say, "but that is not right, we do it like this...." and they get the exception thrown out because they made a valid case for themselves. Then you have to re-write the report. (ever happen to anyone else?)

I try not to come across as crass or untouchable. I have made it known to the management that I have an open door policy where if they ever have issues or concerns they are welcome to come and talk about it. You would be suprised that once you extend the olive branch how many will actually take it.

Now there are always some within any organization that you will NEVER please. It will always be a huge ordeal when you conduct and audit and they always moan and groan and throw fits, complain to management, etc... Those you just have to bear with until they quit or retire!

Utlimately, just be fair, courteous, and available and you will see that they will respect you. (not always agree with you, but they will respect you.)

Good luck.

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#98931 - 07/21/03 03:57 PM Re: Improving audit's image
111 Offline
Gold Star
111
Joined: Jun 2003
Posts: 484
MackenzieS makes some very good points in the post above.

It's really an issue of consideration, meaning when minor issues come up the department needs to get a pass - after a discussion with the department manager and when staffing, e.g. turnover, insufficient staff, etc. is an issue - that issue needs to be included in the write up.

One of the best methods for writing up issues that I've seen is using two categories, one called "Memo," covering lesser issues and the other called "Exception," covering more serious issues. That method allows the auditor to document minor concerns without running over the department (Memos) and cite the important issues (Exceptions) that are more than likely to secure agreement from department management.

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#98932 - 07/21/03 06:46 PM Re: Improving audit's image
Last Mango Offline
Gold Star
Joined: Mar 2001
Posts: 293
Too Far From the Beach
Stop blowing a whistle. All kidding aside, alot has to do with how an auditor treats others. If you are not doing some of these - try them.

Pretend your a doctor instead of a cop. If that sounds too high and mighty, act like a mechanic kicking the tires around on a car. Get rid of any confrontational body language. Smile. Say good morning. Dress professionally. Get certified. Understand management's strategies. Let people know you are human even if it means admitting mistakes or acting a little goofy sometimes (in a conrolled professional manner of course). Call problems issues and observations rather than findings (most auditees think they lost something) or even worse - exceptions. As said above, carefully choose what you are going to report in writing and just verbally report the rest in the context that you are trying to help. Be a resource.

Ok, that's a few of my ideas. Oh yeah - you also need to realize that some people will never believe you are part of the team. If this becomes a real problem, then you only have two choices - either live with them or leave.
_________________________
If you keep living straight from the heart, you will know when to stop and to start.

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#98933 - 07/21/03 07:22 PM Re: Improving audit's image
imabanker Offline
Member
imabanker
Joined: Apr 2003
Posts: 55
KY
I try not to just point out problem areas. Employees don't run and hide from me since I started pointing out to their supervisors all the things they are doing right. It can really help if your management will also praise their departments and not just criticize them for exceptions. I also try to leave them with suggestions for ways to make changes and talk directly with those people responsible for the back room dirty work.
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#98934 - 07/22/03 02:52 AM Re: Improving audit's image
Anonymous
Unregistered

This is a hint from a non-auditor who has problems with the auditors at their financial institution.

Remember you are not always right! Hopefully the people the bank has hired are experts in their field. When you conduct an audit of their area, or areas they have expertise in, discuss your findings with them and allow them to assist you in coming to the answer if necessary.

Many auditors I have run across read the regulation. They don't work with the day to day changes in the regulation nor do they spend time in the field learning how the regulation can be met. If a finding is noted, and the expert attempts to point out why it might not be a finding, be open to learning from them! In my experience, the auditor (a trainee) I recently delt with, wrote up the department on an issue that wasn't remotely connected to the regulation in it's current form. She instead, pulled the prior audit of several years ago and went from the questionaire at that time. The end result was a slammed door and a quick call on my part to the board of directors and the bank president. Now of course, audit wishes I was gone, and I wish they would learn to work with, instead of against, the staff.

Don't try to trick people. Don't write up a teller when you don't ask the question correctly, instead, try running your question by a manager who would understand the question and see how they respond. Perhaps, and yes I know many think it's a stretch, they might know more than you about the issue and their input might be beneficial. If nothing else, it could lead you to be a better auditor.

Sometimes audit attempts to step too far back from the people it is auditing. Occasionaly, stepping in and learning from the people who deal with issues on a daily basis, will benefit all, and allow the people not to see you as an evil, but as a positive partner instead.

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#98935 - 07/22/03 01:29 PM Re: Improving audit's image
Last Mango Offline
Gold Star
Joined: Mar 2001
Posts: 293
Too Far From the Beach
Anon, you made some very good points. A good auditor learns from the "expert" in the department. But, there are times when the department manager is not an expert. A good auditor will identify this situation and adjust the audit plan accordingly.

Auditors must verify information obtained during the audit. Relying on one clerical level emnployee's info is not sound auditing. Anon,if you have experienced this problem, you should discuss the matter with the General Auditor.

Please realize that in performing an audit, auditors may verify information by asking questions of the staff or reviewing documented evidence. There are times when a manager is not the best person to verify information because they do not have the hands on information about what is happening in their department. However, if the audit is performed correctly, a manager would get to see audit "issues" before the final report is issued. I make sure managers get two chances to correct any misunderstandings. By the time that report is issued, the facts should be established and agreed upon.

Of course, there have been rare instances when a manager is dishonest and will not own up to the facts. When this occurs, a good auditor usually has an inkling of what is coming and will ensure that evidence of the "issues" is sound.

Again, Anon, if you experience problems in the future, I suggest you talk to Audit management.
_________________________
If you keep living straight from the heart, you will know when to stop and to start.

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#98936 - 07/22/03 05:06 PM Re: Improving audit's image
Tom Fridrich Offline
100 Club
Tom Fridrich
Joined: Apr 2003
Posts: 180
Omaha, NE
Get to know them and go out to lunch with the people you audit. If you get to know each other on a personal basis, you will end up working better together.
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The opinions I express are my own and not the opinions of my employer.

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#98937 - 07/22/03 05:30 PM Re: Improving audit's image
LinMarie Offline
100 Club
LinMarie
Joined: Nov 2001
Posts: 243
Be friendly and get to know people, but be very careful where you draw the line with your social interaction with employees. I try to keep my private life private and I never socialize with employees outside the bank.

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#98938 - 07/22/03 07:27 PM Re: Improving audit's image
Cowboys Fan Offline
Power Poster
Joined: Dec 2002
Posts: 4,598
SC
Previous Bank: Auditor took great joy in finding problems and reporting them. Never fessed up when they made a mistake/had no recommendations that would work in the real world. Result: adversarial (sp?) relationship with all departments.

Current Bank: our Auditors are viewed (by me anyway) as my support people. They've made it clear that their primary objective is to protect the bank - not make a career off of others' mistakes. This has opened the door so that I feel very comfortable bringing issues to their attention or asking for their help. Result: a partnership of two departments trying to make the bank safe and sound.
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#98939 - 07/23/03 01:41 PM Re: Improving audit's image
Last Mango Offline
Gold Star
Joined: Mar 2001
Posts: 293
Too Far From the Beach
Quote:

Get to know them and go out to lunch with the people you audit. If you get to know each other on a personal basis, you will end up working better together.




I agree with Tom to a degree but heed ALM's advice. When I read Tom's comment I chuckled. His comment reminded me of the time the Security Officer invited me to go with him to an after hours get together with the lending group. I normally did not go out with other employees but the SO, being an ex-cop, was a hoot to be around.

Early in the evening, a clerk became a little too lively and decided to tell me off. As she draped her arm across my shoulder (with her husband next to her) she slurred that I was too stuck up and unfriendly. As proof, she cited numerous times where I walked through the department without saying hi. I apologized and explained that I often walked around in deep thought and did not mean to offend anyone.

After pondering the clerk's concern, I decided that I might have an image problem. In the meantime, music started playing and some in the group went out on the dance floor. I had no intention of dancing with anyone and in fact turned down an invitiation earlier.

As I was finishing up my last drink and about to leave, another employee asked me to dance. Remembering what the clerk had said, I decided to go ahead and dance. I admit, I had a good time on the floor with my dance partner. Four dances later we returned to the table.

That is when my trouble began. My dance partner's boss (who was the one I turned down earlier) was present and had the nerve to tell me that I was hanging around to pick up one of her girls. I told her that she was dead wrong, and I would prove it. Much to the surprise of the employees at the table, I quickly finished my drink, said "goodnight" and departed.

The next day, still remembering that clerk's accusation about being unfriendly, I decided to depart from my normal routine and eat lunch in the cafeteria. At the time, there was only one table occupied with employees. Rather than sit elsewhere by myself, and further my unfriendly image, I sat at the table with everyone else. Oh yeah, my dance partner was there too with about six others.

It did not take much time for me to receive word that the entire building believed that I was having an affair with my dance partner!

By the way, I do need to mention that my dance partner was a clerk and I was an AVP and about a week from promotion to VP. Now, close your eyes and imagine the political storm this caused.

My advice - Beware!



_________________________
If you keep living straight from the heart, you will know when to stop and to start.

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#98940 - 07/23/03 02:41 PM Re: Improving audit's image
Risk Officer Offline
100 Club
Joined: Apr 2001
Posts: 205
Dallas
Communicate and keep it in perspective (and I've broken both of these rules numerous times...).

Communication has been mentioned several times in previous posts, and I have to reiterate its importance. Communicate continuously...before the audit, during the audit, and after the audit. Except in those instances where surprise is necessary, communicate your intentions and needs well in advance of the audit. Get your customer (the auditee) involved in the planning process and risk assessment process. They should know more about their job than you (if they don't there is a bigger problem) so get their input and opinion. Communicate frequently during the audit, especially regarding significant issues. The manager should rarely if ever be blindsided during the wrap-up discussion, and should NEVER be blindsided by the draft written report. Let the auditee read the draft report prior to finalization. Keep in touch with all managers and department heads throughout the year...make yourself available for questions and feedback; you'll be surprised how many people will bounce ideas off of you (some will also try to take advantage, but that comes with the territory).

Keep it in perspective. Never try to validate your existence by the number of problems you find. All "findings" don't need to make it to the audit report, just those that are significant. I learned this the hard way. During the first eighteen months of my previous audit assignment, I came up with hundreds of findings. Our outstanding recommendation report became so long that management was drowning in trying to meet their due dates and the Audit Committee was getting upset when they didn't meet these dates. The focus became trying to meet due dates rather than on risk and significance.

Try to handle the problem within the department if possible. Discuss minor issues with the department head, document what they plan to do about it, and drop it there. Follow up the next time around. As the issues become more significant and exposure to the bank increases, escalate the attention given the issue via the audit report to senior / executive management and the Audit Committee.

One last thing...never bluff when you don't know the answer. Tell the manager you're auditing that there are areas that you don't fully understand...have them explain these things to you. It is better to ask and learn than to either bluff and lose credibility or, even worse, to ignore what you don't understand. Remember that education and experience is a process. The next time around you will understand better and be better prepared. Use all resources available to you...your own employees, your network (if you don't have one, establish one), BOL, etc. Attend all the training you can, read all you can, and get certified...the tests will force you to read.

Enough rambling...
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My opinions are just that...my opinions.

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#98941 - 07/23/03 03:24 PM Re: Improving audit's image
Risk Officer Offline
100 Club
Joined: Apr 2001
Posts: 205
Dallas
A couple of other things...

Whenever possible, try to add value to the organization. The Institute of Internal Auditors defines internal audit as follows: "Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes." While much of our work is based on the traditional checking of controls, we need to also look at such things as efficiencies of operations and other "value enhancing" opportunities. Internal auditors are in a unique position in that we are aware of interrelationships between departments and how the bank works from the big picture standpoint. Take advantage of this.

In looking at the above definition, many times we focus too much on the assurance side and not enough on the consulting side. While, in reality, both perspectives can add value, many managers see the assurance side as us being the cops and only the consulting side as adding value.

There is also the issue of independence...when consulting and advising, there is a fine line between maintaining our independence and becoming too involved in the management of the function. However, if you are willing to approach this line, you can add more value.

As a side note, if you have questions about this "line" and what is or is not appropriate, I would start with the Institure of Internal Auditor's International Standards for the Professional Practice of Internal Auditing (Standards), located at this link. The IIA also has a series of slides and a powerpoint presentation concerning adding value here.

Secondly, at the risk of stating the obvious, make sure any recommendation you make is cost justified (this also ties in to adding value). If the control costs more in time and resources than the asset or risk we are trying to protect against, it doesn't make sense. And don't get too nit picky until you deal with the significant risks and controls.
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My opinions are just that...my opinions.

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#98942 - 08/01/03 04:37 PM Re: Improving audit's image
Joe Offline
Member
Joe
Joined: Aug 2003
Posts: 74
Overseas
I am new in this website. What are remarkable comments? Indeed it is very hard to keep a good image for your audit department considering the type of work we do. I agree on the focus on communication. My CIA teacher was always telling us > Audit is 90% communication and 10% technical. Sometimes when you try to keep a good image being an auditor, independence comes in question. You just canít please everyone

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#98943 - 08/29/03 05:30 PM Re: Improving audit's image
Joe Offline
Member
Joe
Joined: Aug 2003
Posts: 74
Overseas
I really want to keep this post a live. This is a good one !

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