Auditors, even Internal Auditors, are often seen as intruders. From the perspective of many business stakeholders, internal auditors invade their territory to pick their job apart without a full appreciation of what they deal with day-to-day. In their eyes, we show up to tell them all the things they are doing wrong (even if we painstakingly try to navigate findings and discussions in a tactful, consultative manner) and then leave them to deal with the aftermath. Is it any wonder why relationships between auditors and business stakeholders are often strained?
A few years ago, I was part of a lengthy audit project that started great but ended poorly. We would often share bagels and coffee with the auditees, building relationships before the meat of the audit and related reporting cycle began. Over time, however, the auditees quit stopping by for bagels and small talk. Meetings became more tense and defensive. We fell into a negative pattern driven by stakeholder animosity towards the requirements of an audit process: document requests, surveys, walkthrough meetings, and findings discussions. I felt my team was extremely competent and approached interactions with great care, but the audit fatigue was palpable. If the end result is tension that hinders the quality of our audit, does it really matter how hard I felt we were trying? (Spoiler alert: in client service, the answer is no.)
As the audit fatigue set in, stakeholders didn’t volunteer potentially useful information to us. Short answers, exasperated eye rolls, and intimidation tactics became the norm to minimize the time they had to spend with us. Because information was held back, we were frustrated with the auditees, and we dreaded scheduling follow-up conversations. After a while, the relationship (and the bagels) went stale. When I reflected on this engagement, I found solid relationship-building strategies that I have used ever since.
6 Tips for Building Relationships with Auditees
Communication is essential to building stronger auditee relationships. The tips that follow are specific recommendations I have followed to develop mutual trust during conversations with business stakeholders.
1. Check Your Ego at the Door
While you may know a lot about accounting or audit standards, that does not mean you need to constantly go out of the way to validate yourself and show off that knowledge. It’s understandable that we want the auditee to feel that we know what we’re talking about. Keep in mind the point of performing the audit: the goal is not to impress people with your knowledge but to learn about their process and report to the relevant stakeholders for value-add insights. Spending too much time talking about your professional accomplishments or why you’re qualified to give recommendations on the client’s process can come off as arrogant and shut other people down. At the end of the day, you may know your subject matter and the client’s process, but confidence can become arrogance quickly in the mind of an auditee.
2. Listen and Have a Relentless Interest in the Process
We’ve all been there: things are hectic, you have prior year audit programs and workpapers, and next thing you know a walkthrough meeting turns into more of a checklist confirmation than an actual meeting. Be aware of this tendency and genuinely listen to auditees with a fresh set of ears each time you speak with them, regardless of how tempting it may be to turn the meeting into a checklist charade. Having an open conversation, listening, and asking meaningful questions will likely help you learn more about risks and controls that were not on your radar. When you demonstrate that you understand their work, they will trust your judgment and will be more likely to agree with your recommendations. In addition, the meetings will be far less likely to feel like a trip to the dentist (for both you and the auditee).
3. Explain the “Why”
When you think you have found an issue, you need to talk through the details with the auditee. Show them how you interpret what you have found, how it fits into the audit, and ask them if you are missing anything. Always frame the finding in terms of risk and significance. If you have taken the time to understand the process and build trust, they will help you understand what you have found. With quality, informed communication between auditor and auditee, the findings will be more impactful, better understood, and less likely to cause future mistrust or tension between you and the stakeholder.
4. Avoid Creating a Panic
If you do find something, the first time your auditee finds out about it should not be in the final report. Before things escalate, present what you think you may have found to the auditee. When you present the finding, focus on the risk to the organization to frame importance and magnitude. Give them a chance to understand the finding and discuss the next steps with you. It also can help to explain how issue action plans and tracking work for the organization since they may not have experienced this process.
5. Put Yourself in Their Shoes
Most auditors have never actually been audited — and I’m a perfect example. I was involved in a PCAOB inspection here and there, but I can’t truly say I have been under the microscope in the same way our auditees can be. Most auditors’ work is reviewed and typically closed out through direct interactions with managers/supervisors. In contrast, formal audit findings are memorialized in a report often sent directly to high-ranking individuals at a company. Remember to show empathy when discussing audit findings and sensitive topics. How would you feel if you missed something and the exact miscue was formalized in a report addressed to C-Level executives with your faux pas clearly identified? It is natural for people to feel defensive if they do not understand why the issue is reportable or if they fear repercussions. If you remember this, it can be easier to understand when and why auditees may become defensive and allow you to tailor your communications accordingly.
6. Kill Them With Kindness
We are all busy, but you must spend time getting to know people. Stop by the office when possible, schedule a quick call, and talk with people at times other than when you have a finding or a document request follow-up. Never underestimate the importance of small talk, even with those who may seem to have no patience with it. If you don’t build a relationship, then they will think every conversation with you means you want something or you found something. Casual conversation is even more important when working remotely, even if it is through email, chat, or web conference. Adapt small talk to the current work environment. You can always be nice, and if you have been a sincerely kind person with your auditees, most of them will reciprocate and allow you to build a mutually beneficial working relationship that will increase the quality of the audit and decrease the pain.
Why Is Communication a Core Skill for Auditors?
I started my audit career at EY as both an external auditor and outsourced internal auditor, and that meant working with many different organizations. Over the years, I progressed from staff auditor to manager, and I was able to see how auditees responded differently to various auditors and their unique communication styles. I have seen firsthand how the approach we take with those we are auditing has a direct impact on the long-term relationship between our teams and on the quality of the work we perform.
In the end, the majority of an auditor’s job is communication — listening to people and talking to them about the work they perform. The strategies explained above work because these prioritize the auditee’s needs and concerns over the auditor’s desire to complete a predetermined audit program. In the end, effective communication is essentially the first box that needs checking on any quality audit.
Trevor David, CPA, is a Manager of Product Solutions at AuditBoard. Trevor joined AuditBoard after six years with EY’s Advisory Services/Business Consulting practice, where he managed co-sourced and outsourced Internal Audit and SOX engagements as well as external audit engagements focused on IT general controls. Connect with Trevor on LinkedIn.