Introduction
Last month was designated International Internal Audit Awareness Month by the Institute of Internal Auditors Global (IIAG). The IIA Guyana Chapter (IIAGC), which is affiliated to the IIAG, has been participating, as with other Chapters globally, with a programme of activities, including the publication of articles pertaining to the practice of the profession in Guyana. This article is focused on the communication between the internal auditor and his/her executive management (client) in working towards the goal of adding value and improving the organisation’s operations. The views expressed are based on my experience over the years as a practitioner.
The current communication process
As part of the audit engagement, the auditor is required to submit a report which will contain, among other things, the findings and recommendations to executive management. Internal auditors are guided by the International Standards on the Quality of Communica-tions, which state that they must be accurate, objective, clear, constructive, complete and timely. The contentious issue is the tone of this report, taking into consideration that both parties are working to a common goal of adding value to the organisation’s operations.
There are auditors who are seeking to make an impression and may tend to use excessively critical language, with no regard for diplomacy. Generally this approach does not foster constructive dialogue or prove to be helpful to management. In effect, auditors should be conscious of reporting accuracy, however they need to consider how their reports might impact on the recipient.
From a management perspective, even when they work hard to manage risks, as an example, internal auditors may still identify significant weaknesses or deficiencies in their area. In situations whereby reports are worded carelessly, management may interpret the content as unfair or hurtful, which could eventually elicit defensive and negative responses. In a situation whereby management disagrees with the audit findings, there is the tendency for it to respond in a defensive and/or negative tone, or no response whatsoever. Further, a critical report can have career damaging consequences for management personnel. Ultimately, management must realise that along with the auditor it is working towards the organisation’s goal of adding value and improving its operations.
Way forward
Instead of adopting a combative approach, internal auditors should at all times consider a balanced and constructive reporting style. They should strongly reserve critical language for situations where there is evidence of negligence or incompetence. Auditors must be mindful at all times of the consequences their words can have.
Using harsh language, even if it is unintentional, can be counterproductive, and it may make management less open to implementing the auditor’s recommendations. Yes, there are situations which will merit a highly critical report, however auditors need to consider whether the language used may indeed be overcritical.
Choosing language carefully
If the internal auditor’s objective is to achieve beneficial change to the organisation, a balanced and constructive approach to the auditor’s findings and recommendations will offer the best options.
Audit communications should be clear, honest, and timely, and the report should not shy away from legitimate and justified criticisms. They should be choosing their reporting language carefully, and, in so doing, they should avoid language that may ultimately undermine their efforts. They must remain professional, objective and be independent at all times. Even when auditors are kind and positive, they should not abandon their fact-based conclusions in exchange for good cooperation from management.
Management, on the other hand, has to realise that a teamwork approach is necessary and so an excellent working relationship is necessary.
That being said, both the internal auditor and management are urged to avoid being antagonistic in the communication process.
John Seeram is a member and former president of the IIA Guyana Chapter.
