Most people do not listen with the intent to understand; they listen with the intent to reply – Stephen R. Covey
Most audits are delayed resulting in reports that are outdated, repeat findings, uncompleted audit plans and audit cost budget overrun in a world where the auditor is expected to do more with less. Internal and external audit roles have become challenging in the face of changing technology, legal and regulatory environments.
Businesses have become very complex and understanding of business is fundamental to the auditor’s ability to give assurance. To have a good understanding of the control environment, today’s auditor has to be curios, present, listen attentively without judgment with a view to understanding and not to respond, asking right and powerful questions to better understand the control environment. This in addition to contracting at the beginning of the audit assignment and maintaining confidentiality.
This is where today’s auditors will find coaching skills very useful in the discharge of their responsibilities. Most auditors present themselves as experts and lack the right soft skills to make them more effective. This situation always results in the auditor and the client competing for knowledge superiority which only leads to delay in the resolution of findings and stalemate due to disagreement on factual accuracy of audit findings. The auditor should show up to confirm what she already knows and learn new things and not to compete with the client in the area of knowledge and business understanding.
The best auditor is the one who accepts she does not know and humbles herself before the client. Auditors must demonstrate that “they come in peace” to help improve the control environment and not to prove superiority or act as if they are there to catch a thief. Trust is very important in the client’s ability and willingness to share information and arrogance does not build trust.
The basic coaching techniques which the auditor will find useful are:
All coaching engagements start with contracting similar to audit. This happens at the initial stage of the assignment when the role of the auditor should be clarified to avoid misunderstanding and should be re-emphasized in the course of the audit assignment where necessary. Some clients expect the auditor to tell them how to improve their control environment. My believe is that the role of the auditor is to partner with the client similar to coaching in the review of the control environment with a view to coming up with actions for which the client must accept and take responsibility and accountability. That is the easiest way to ensure implementation of agreed actions and avoid repeat findings.
Both coaching and audit place a lot of emphasis on confidentiality which is important to building trust and avoiding litigations. Clients will only share information if they believe such information will be treated in confidence. I recall my experience as an auditor where a client refused to share information on senior management bonuses with the auditors because they did not trust the auditors to treat the information with the confidentiality it deserves and to not use it to their advantage as employees.
An auditor must be a good listener which is also one of the core competences of a coach. Good listening leads to better understanding. Most people listen to respond and to confirm what they already know and not to understand the issues. Listening to understand is a skill that must be developed by every coach and auditor and not listen to confirm and to respond. This is possible if auditors approached clients from the point of ignorance and not as experts. It is difficult because the client sees the auditor as an expert and the auditor falls into the trap by showing up as an expert.
Asking powerful questions
A good auditor should ask powerful questions and the characteristic of a powerful question is that it is open ended, unambiguous, clear and direct. Closed questions lead to short answers and the client telling the auditors what they want to know and not what they should know. Good questions should help the client to think out of the box and speak freely.
A good coach is the one that is curious and pays attention to the client to understand the state of being of the client. To understand the complex business environment of the client, the auditor must be curious because the auditor does not and is not expected to know every aspect of the client’s business. The only way to get a better understanding of the client’s business is through curiosity.
A good coach must be present with the client. Due to our daily activities and other outside pressures, we tend not to be present with the client when asking questions or when having conversations. The client in some cases knows when we are not paying attention, and this does not bring the best out of them. Presence helps to go with the flow. This is also expected of a good auditor. An auditor who is not paying attention will miss out on important information shared by the client that might lead to better understanding of the control environment.
Non-judgmental and prejudice
The coach approaches the client without judgment or prejudice which is also applicable to the auditor. The auditor should have an open mind when interacting with the client to better understand the client’s control environment. This is very difficult except for those trained to be non-judgmental and to approach the client without prejudice and judgment. As humans, it is natural to be judgmental and prejudicial but what is important is to know when this is happening to be able to call it.
Experts are generally expected to tell clients what to do and most clients see the auditor as an expert which is why it is very important to explain to the client your role as an auditor at the contracting stage. Audit is different from consulting and as a consultant you can prescribe but as an auditor you have to partner with the client to improve controls. You are not the expert in the business as the clients better understand their business. Engaging with the clients to come up with agreed actions to the findings will make them take responsibility and accountability leading to timely implementation of agreed actions and avoidance of repeat findings.
For you and your team training on these competences contact me at firstname.lastname@example.org