It seems like all anyone is talking about nowadays is AI, and Audit International want to know “Can AI enable compliant electronic communications at scale?”

Internal auditors and risk & compliance teams play a critical role in ensuring that organisations are compliant with relevant regulations and policies. However, with the proliferation of electronic communication platforms, the greater embeddedness of electronic communications in our day-to-day work, and the increasing complexity of regulatory requirements, the job of internal auditors and risk & compliance teams has become more challenging.

Over the past decade, we have seen the use of electronic communication in business evolve to the point where we cannot imagine working without it. At the same time, the recent years have seen electronic communication, such as emails and instant messages, increasingly be at the core of regulatory investigations and compliance breaches, with examples all across the media. While electronic communication has transformed the way we work, it also exposes companies to a series of risks that can result in regulatory fines and litigation, causing significant reputational damage and financial loss.

A key challenge is that employees are generally relied upon to observe regulations and corporate policies in their day-to-day communications. Yet they typically receive little support beyond an initial training on compliant communication and are held responsible when things go wrong. The average office worker sends 10,000 emails per year, and it only takes one mistake to get them and their company into trouble. Moreover, traditional compliance training is reactive and simply does not prevent all the breaches that can occur. This is where technology can be leveraged to assist employees in their day-to-day work and, in the long run, create a stronger work culture.

Fortunately, advances in artificial intelligence (AI) are now making it possible to achieve proactive compliance at scale through real-time risk prevention, which can make the job of both employees and risk & compliance teams easier and more effective. One of the key advantages of using AI is that it can help to reduce the burden of manual compliance monitoring tasks, enabling internal auditors and risk & compliance teams to focus on higher value-added activities. By leveraging AI technologies like natural language processing and machine learning, it is now possible to monitor electronic communications at scale, analysing them for potential compliance issues in real time and assisting users to mitigate potential risks before they occur. This can help to streamline compliance management processes, enabling risk & compliance teams to more efficiently manage compliance and minimise the risk of costly violations.

Another advantage of using AI is that it can help to improve the accuracy and effectiveness of compliance monitoring. Traditional compliance monitoring methods often involve manually reviewing vast quantities of data, which can be time-consuming and error-prone. By contrast, AI can analyse data in real time, automatically flagging potential compliance issues and providing actionable insights to internal auditors. This can help organisations to stay ahead of evolving regulations and minimise the risk of compliance violations.

AI can also help improve the quality of compliance monitoring by enabling internal auditors and compliance teams to more effectively identify and address compliance issues. By analysing electronic communications for potential compliance risks, AI algorithms can help pinpoint areas of concern in real time, enabling internal auditors to focus their efforts on the most critical compliance issues. This can help to prioritise compliance monitoring efforts and ensure that internal auditors and compliance teams are able to take a more targeted and effective approach to compliance management.

The use of AI can therefore help organisations achieve proactive and continuous compliance at scale. It can help shift the focus from reactive responses to compliance breaches towards proactive compliance through real-time risk prevention. As AI technologies continue to evolve, we can expect to see more innovative solutions emerging in this space, enhancing the capacity and supporting the critical work of internal auditors and risk & compliance teams.

Audit International are specialists in the recruitment of Auditors and various Corporate Governance Professionals including Internal Audit, Cyber Security, Compliance, IT Audit, Data Analytics etc. across Europe and the US.

If you would like to reach out to discuss your current requirements, please feel free to reach us via any of the following:
Calling
– Switzerland 0041 4350 830 59 or
– US 001 917 508 5615
E-mail:
– info@audit-international.com

When SOX was first enacted in 2002, its goal was to increase the overall transparency of financial reporting while, at the same time, develop a more reliable system of checks and balances. It was understood that compliance was both a legal obligation and good business practice.

Affecting both public and private U.S. companies, as well as those non-U.S. companies with a U.S. presence, SOX is focused on corporate governance and financial disclosure. It requires that all financial reports include Internal Controls Reporting and demonstrate that a company’s financial data is complete and accurate, with an adequate number of controls established to safeguard it. It also encourages the disclosure of corporate fraud by protecting whistleblower employees of publicly traded companies or their subsidiaries who report illegal activities.

The continued evolution of ESG on the other hand, includes a variety of factors that are often used to evaluate a company’s commitment to sustainable operations. The environmental factors in ESG offer insight into an organization’s environmental impact, including its carbon footprint, climate change initiatives, waste management policies, natural resource conservation, pollution, or efforts to decrease deforestation.

The social component of ESG examines an organization’s treatment of stakeholders (workforce, customers, providers and suppliers, government, regulators, or the local or global community) on issues such as diversity, equity, and inclusion practices, wages and salaries, and sales practices.

Lastly, the ‘G’ in ESG focuses on the governance factors and how to assess whether a company’s internal processes are able to ensure the organization, and its employees, act with professionalism and integrity.

While SOX is primarily focused on financial information — working with finance professionals and accountants — ESG is more concerned with non-financial data and metrics. It shouldn’t come as any surprise when organizations faced with these evolving and new ESG reporting requirements ask themselves.

The role of internal audit, Starting small and look at the bigger picture:
In the years that followed the introduction of SOX, the effect that it had on the internal audit profession was clearly a double-edged sword. On the one hand, internal auditors were quickly recognized as the experts needed to step into this space and provide the guidance that so many organizations needed. This resulted in growth across both the internal audit profession, as well as the various functions internal auditors were able to provide assurances for. It’s fair to say that internal audit membership more than doubled during the first few years of SOX implementation.

However, due to the urgency and level of uncertainty that SOX presented, leaning heavily on internal auditors also resulted in their spending greater amounts of time focused exclusively on SOX priorities, and significantly less time focused on those risk-based audits that organizations depend on. From an internal audit perspective it was a massive undertaking, and one that led to organizations developing SOX-specific internal audit teams.

Over the course of the last 20 years, and as a direct result of SOX, internal audit’s role around internal controls for financial reporting has become well established. Many of those same auditing skills and practices can (and should) be applied to ESG. However, an all-too-common question that’s on everyone’s mind is — “Who is responsible for ESG?”

ESG should be viewed as a top-down initiative, particularly from an organizational perspective regarding mandates, targets, and how goals are being established, monitored, and reported on. Each area or department of an organization should be aware of and responsible for their ESG initiatives. However, internal audit has an opportunity to become trusted advisors and take on more of an influential role when it comes to those first step.
How can internal audit provide the greatest value?
Organizations should reflect on the experiences they had in the early days of SOX and focus on identifying and understanding what the key controls of ESG will be. Where SOX was focused exclusively on financial reporting, ESG falls into that category of “everything else”. It comes down to the accuracy and reliability of the information. But how does an organization go about achieving that? The same way financial reporting was achieved with SOX.

Organizations have become comfortable with their financial reporting. They have been measured according to their financial results for a very long time. ESG in audit is different. It’s broader. It covers more ground and organizations will need to take some time to comprehend how to effectively turn the foundations of ESG into meaningful reports. Although it may be more complicated, the underlying processes that have been used for Sarbanes-Oxley for the last 20 years can be leaned on as a starting point when addressing ESG and identifying a methodology for assurance.

ESG presents a tremendous opportunity for internal audit to make an impact within their organizations. Because it is still evolving, and new guidelines and mandates are being released every day, a good strategy for internal audit would be to start small and identify those ESG factors that can be quickly included into your existing audit plan. Whether that’s reducing overall energy consumption throughout your office or working more closely with Human Resources to ensure new-hire practices are following appropriate guidelines, acknowledging the industry your organization resides in, understanding its risk landscape, and identifying a best-practices framework will give you the direction you need to successfully navigate ESG.

If there is one takeaway from the lessons learned when SOX was first implemented, it’s that those in the internal audit profession should avoid taking the “wait and see” approach with ESG. ESG is here and is gaining exposure and traction every day. The social ramifications of ESG alone should be enough for organizations to sit up and take notice. Understanding how to audit ESG — knowing your organization’s metrics and targeted reporting requirements, what to audit against and include in the final audit report — will better position you for success as a trusted advisor within your organization. Fill those essential Subject Matter Expert gaps early on with Audit International, identify and engage with key stakeholders, and avoid the reactionary trappings and costly mistakes of waiting too long and scrambling for solutions.

Audit International are specialists in the recruitment of Auditors and various Corporate Governance Professionals including Internal Audit, Cyber Security, Compliance, IT Audit, Data Analytics etc. across Europe and the US.

If you would like to reach out to discuss your current requirements, please feel free to reach us via any of the following:
Calling
– Switzerland 0041 4350 830 59 or
– US 001 917 508 5615
E-mail:
– info@audit-international.com

Our journey discussing the benefits of auditing organizational culture is coming to an end. Audit International began this series by introducing initial cultural auditing concepts in the first article. Then, in the second article, we continued by more closely examining the first half of the top ten tips that were outlined. In this, the final article of the series, we wrap up with the second half of that list and conclude our analysis.

Auditing culture-
Auditing culture requires involving a wide range of stakeholders and will require you to consider alignment of the desired culture to the actual activities of many people. As we have seen, the leadership in the organizations and the people within the business are clearly very important. To get a true sense of culture you will also need to consider organizational partners and outside service suppliers.

If culture is the way things are done more informally, then this impacts everything in your entire organization’s wider sphere. In this context, procurement may be an important stakeholder to engage with in any cultural audit to better understand their selection methodologies, allowing you to form a view, for example, on how they consider cultural fit in the selection of any third-party suppliers. It also goes beyond the selection of suppliers to how we treat them once they are in place. Does the organization treat them fairly, or is the focus on cost at the expense of other, more important matters?

Ensure that you consider both design and operating effectiveness –
Auditing work should be examining both design and operating effectiveness. Cultural reviews are no different but have the tendency to focus on design at the cost of operating effectiveness. As with all audit work, you would typically begin with a risk and control assessment which can be developed in line with the cultural levers you have identified. Typically, an auditor would then request documents, allowing some desktop analysis ahead of the interviews. Interviews with management can focus on whether they understand the desired culture and can clearly articulate this, while also identifying which levers they see as being particularly important for ensuring the culture is real and lived on the front line. Interviews should also probe the extent to which management role model the desired culture every day and ensure their teams’ activities are in line with the culture.

However, understanding operating effectiveness requires a wider approach and talking to a wider range of employees. Focus groups or surveys can be effective to gather data from employees and may provide more diverse views. If focus groups are operated, they will require additional skill, with the lead needing to manage the group so that a fair range of positive and negative views are heard.

Despite the limitations of cultural measures these too should be requested for each of the levers to understand the extent to which the organization has cultural measures and whether the results are acted upon. Measures that you may wish to consider typically involve people management activity, such as employee turnover, exit interview data, grievances raised by employees, whistleblowing information, and absence data. Other areas should also be explored, such as customer complaints data. However, collecting these may present a challenge. If culture is important in the organization, then it will be available and likely reviewed. If not, there is the potential your first audit finding on the need for management to have appropriate measures in place to track whether the desired culture is being delivered in practice.

In Audit International’s experience, there is no, single best way of conducting cultural audits. Rather, you need to form a view of what is right for your organization. One aspect you will need to consider is whether you conduct specific cultural reviews in your audit plan, have it as a component in all audits that you conduct, or draw out cultural consideration into an off-plan piece of work. I’ve seen all aspects of all three of the options successfully implemented.

Don’t go for a grand plan –
It is important that you consider how you introduce cultural auditing into your program of work. It’s a sensitive topic, and management will often be wary of audit getting too involved. Your internal audit colleagues may also be nervous about whether an area like culture can, in fact, be meaningfully audited. The best advice being — don’t go for a grand plan, but rather start small, test, and learn as you go. This includes building support from the Board and executive leadership by demonstrating, as you go, the insights gained from the cultural examination you have completed and the possibilities to go further with increased resources and business buy-in to this challenging area.

This lends itself to the suggestion to start with a pilot, or a proof of concept, where you identify an area of the business to work with and look to introduce the concept of auditing culture at this point. This should be an area where you know you have a senior auditee who is an advocate of internal audit and willing to work with you to make the pilot a success. Audit International have found that success breeds more success and considerable momentum can be delivered in this manner. Early on, it is also good to share examples of your work and the value it is bringing. I call this the “test, share, and impress approach.”

Collaborate with your business colleagues –
It is also very important to work with the business. The tip here being: Collaborate with your business colleagues – independence is a mindset. Audit International have spent time with many auditors who have been reluctant to collaborate in any deep manner with the business, citing the audit charter and the need for full independence from first-and-second-line activity. We agree, our independence as internal auditors is very important. We need to be objective in all we do to avoid threatening this. However, Audit International don’t believe independence means that we cannot work closely with the business where it makes sense to do so.

One such area, for example, is the identification of the cultural levers discussed earlier – an organization-wide conversation on this is helpful in building appropriate understanding and support for the examination you wish to conduct. Also important is the identification and quick access to relevant data for your cultural work, both at an organization-wide level, but also in divisional units of your business. There is likely to be shared interest in this area, particularly with your HR function. Given this shared interest, it makes sense for all those interested in cultural understanding to come together to share ideas and data for the benefit of the business. For example, this may mean developing a shared data area that all can access. Identify across your business who is interested in this space and join with them to share, learn, and progress.

Upskill all auditors at all levels –
Finally, ensure that the program of work you want to introduce is a sustainable approach to auditing culture. Find a way to get your people behind this approach. At heart, we are a people business and any push to audit this challenging area on a sustainable and systematic basis will depend on the skills and knowledge of your teams.

This leads to the final tip to upskill all auditors at all levels. As we identified earlier, your impact is likely to be much higher if your teams integrate consideration of cultural levers and impacts throughout your audit work and not just in any standalone audit you may do. Understanding the nuances of culture is not simply reserved for HR and psychologists but is a core competency for all auditors. This should be reflected in the recruitment and development approach for your team.

This is likely to mean that if you are going to make cultural assessment a core part of your internal audit work you will need to provide training to the audit team. This will need to cover the organizational cultural levers that you have identified, the data that can help you understand these levers, and the interviewing techniques that will need to be employed to get to actual, as well as espoused, culture. Be honest with yourself and acknowledge where you don’t have the skills that are needed. You will likely need to draw on other sources of expertise, including business and external consultancy support. These can allow you to supplement both the capacity and capability of your team.

And, of course, think carefully about how you organize to deliver this challenging area of work. Our current view is that a multidisciplinary (sometimes called Hybrid) approach is most successful. This is all about how you set up your operating model to deliver your cultural audit work. Some larger functions have established dedicated, well-resourced teams to examine culture in their organization and have staffed this with a blend of expertise, including behavioral psychologists. This group of specialists work alongside and coach front-line auditors who are then encouraged to consider cultural levers in all their audit work as we discussed earlier. Clearly, this is more relevant for larger organizations, but even in smaller functions, you may choose to appoint a cultural lead (or champion) with the responsibility to support and drive the integration of cultural aspects into all your audit work.

Conclusion –
There is no silver bullet for the successful development and implementation of a cultural audit program. Hopefully, the tips that Audit International provided throughout this series of articles will be a useful catalyst for your work in this space as you consider the conditions needed for you to achieve momentum around the idea of auditing culture in your organization.

Audit International are specialists in the recruitment of Auditors and various Corporate Governance Professionals including Internal Audit, Cyber Security, Compliance, IT Audit, Data Analytics etc across Europe and the US.

If you would like to reach out to discuss your current requirements, please feel free to reach us via any of the following:
Calling
– Switzerland 0041 4350 830 59 or
– US 001 917 508 5615
E-mail:
– info@audit-international.com”

At Audit International, we understand auditing organizational culture is a challenging area for internal audit. Culture is dynamic, and regularly changing. Successful auditing of culture requires a holistic approach across the internal audit function covering the development of internal auditor skills, adjustment to audit methodology, and buy-in from the business regarding the value insightful culture auditing can bring.

In this first article of a three-part series, Audit International examine and discuss the various factors for successfully auditing and influencing culture in your organization.

What is organizational culture, and why does it matter?
Before looking at how you audit culture, it’s necessary to first have a good understanding of what you mean by culture and why it’s important to organizational success.

The classic definition is around the phrase coined by Charles Handy, “the way things are done around here”. While helpful for us to gain insights into auditing culture, we need to unpack this further. Culture is about the interaction between values and behaviors and how these are seen in the organization’s activities and interactions with the range of stakeholders it has (e.g., employees, customers, suppliers, and society).

Top ten tips:
Given the fact that you are reading this article, hopefully you are already convinced that internal audit has a role to play within the organization when it comes to assessing culture. You may already be on this journey delivering cultural insights through your work to your Board, or you may simply be interested in learning more about how to begin this journey. Whichever stage you find yourself, the following top 10 tips will provide you with some initial and practical thoughts that provide a view on culture and the direction needed to influence both management and the Board.
1 – Identify your cultural levers
2- Reputation, Identify whether the organizations actions and messaging, internal and external, are aligned
3- Leadership, Do they own and manage the culture?
4- People Management, Is desired culture integrated into people-management activities?
5- Identify key processes and access alignment.
6- Auditing culture, is this holistic approach being considered by a wide range of stakeholders?
7- Be sure that you consider both design and operating effectiveness.
8- Don’t go for a grand plan.
9- Collaborate with your business colleagues, independence is a mindset.
10- Upskill all auditors at all levels.

In the coming second and third articles of this three-part series on auditing culture, Audit International will take a closer look and provide a more in-depth examination of each of these suggested ten tips. These follow-up articles will offer examples and provide opportunities to more successfully audit and influence the culture at your organization.

Audit International are specialists in the recruitment of Auditors and various Corporate Governance Professionals including Internal Audit, Cyber Security, Compliance, IT Audit, Data Analytics etc across Europe and the US.

If you would like to reach out to discuss your current requirements, please feel free to reach us via any of the following:
Calling
– Switzerland 0041 4350 830 59 or
– US 001 917 508 5615
E-mail:
– info@audit-international.com”

Let’s face it. Even here at Audit International, we understand Internal audit still suffers from some rather negative stereotypes. There are plenty of companies or units where internal auditors are not welcomed with open arms. Audit clients may view internal audit with suspicion, expecting a “gotcha” mentality or may feel like they are under surveillance.

Sure, it’s often undeserved and some of it comes with the territory, but we may even be perpetuating such negative views with the words we use. Words and phrases that internal auditors consider just a normal part of the profession’s vocabulary may actually be words that trigger negative reactions in our audit clients. And often, internal auditors don’t realize they are contributing to the hostility by using them.

Words matter and good internal auditors choose them carefully. But auditors are also as prone to using professional jargon as anyone. These are words that have become so commonplace that we might not think too much about what they really mean, especially to others. We all use them. Yet, how they might be interpreted may not be how we intended. So, what can we do about it?

Here are seven words that we should consider their meanings more closely and either use them more carefully or strike them from our vocabulary completely.

1. “Finding”
Most internal auditors call what we consider reportable (in writing and verbally) a “finding.” Think about that for a moment, though. It’s not as if the vast majority of our audit observations were hiding or lurking in some hard-to-discover, dark and foreboding place, and it took our best Indiana Jones skills to unearth them. Lo and behold, ah ha! We have a “finding.” The word relates a context of sleuthing and uncovering things that were hidden, perhaps intentionally.

So put yourself in the shoes of your audit clients. We come along and have all these “findings,” as if they weren’t doing their jobs and it took us to find these gems of reportable conditions. Worse yet, we are often reporting as “findings” what audit clients told us directly. How would you feel if someone walked through your house and told you at the end of their visit that they found the carpets needed vacuuming, the furniture needed to be dusted, and relayed a few other of their insufficient housekeeping “findings.” You’d likely be inclined to never invite them back.

Try using the words “observations,” “conclusions,” or “conditions,” rather than “findings.” You may find they work better in your organization. Audit clients will feel less like they are being accused of hiding information or that they didn’t see something that the auditors later uncovered.

2. “Weakness”
When we observe an issue, we also sometimes couch that issue by using another troubling word, “weakness.” We may not be able to avoid calling breakdowns in internal controls, as they relate to SOX-like work, “control weaknesses” if the controls are not working as they should (or at all). But we should avoid calling observations outside of controls “weaknesses,” if possible.

Think about it. You go into the manager’s office during an audit, and you say, “excuse me, if you have a few minutes I’d like to go over a few weaknesses that have come to our attention during our review of your area.” Expect immediate defensiveness. We might as well be criticizing their first-born by pointing out weaknesses in how the child looks or plays with others. The word connotes physical ineptitude and can strike a visceral blow to any manager’s ego.

Like weaknesses, “deficiencies” isn’t any better for all the same reasons. So, perhaps, try “opportunities,” or “matters for attention,” rather than “weaknesses.” Even “challenges” or “difficulties” will garner a better response from audit clients.

3. “Material”
While the term “material” has been part of auditing language forever and, although tough to really quantify, is an important and meaningful word. I mean, if it’s not material why look at it or consider it at all? We also have the SOX-related nomenclature of “material weaknesses” (which people want to avoid as best as possible). Look, if you tell someone something is “material” and it truly is agreed that it is “material,” that’s a big deal.

Yet when we tell someone who is the owner of something that we want to talk with them about a matter that is “material,” what would be the natural reaction of the person on the receiving end of that word? Disbelief, denial, and outright defensiveness are natural human reactions when told something is “material,” in a bad way, which affects them or their responsibilities. Think about being in the doctor’s office because you have not been feeling well. After a bit of consultation and tests, the doctor comes in the room and tells you that there is something “material” to discuss. You are likely to act with disbelief, denial, and defensiveness, naturally. The word conveys an urgency we might not intend. Do we really want our clients to react that way, now or in the future?

Note that “material” has an important legal context. The Securities and Exchange Commission defines “materiality” as anything a reasonable investor would deem relevant to their decisions about whether and how to invest. While it’s important to use this word carefully in this legal context, it’s also easy to adopt the word and use it outside this context, which can result in misusing it. Another problem with “material” is that it implies that everything else isn’t important or that other aspects of an audit client’s work are meaningless, which is not a great sentiment to convey.

So, perhaps, when you don’t really have to use the word “material” (or “significant” for that matter) in consultation or in writing, maybe consider some different language. Hey, there’s something important I want to run by you when you have a moment, and maybe we can write about the top matters for attention without calling them “material” (unless, of course, we must).

4. “Disclosed” or “Uncovered”

Like the word “finding,” the word “disclosed” (or the word “uncovered’) has a similar connotation. It’s as if the issue was hiding and no one knew about it or would ever find it without you, and your brilliance—the internal audit superhero with x-ray vision. OK, sometimes things were truly hidden, unintentionally or, worse yet, purposefully, and we did use our internal audit superpowers to uncover it and then we get to puff our chest and—cue music here—disclose it. But, come on, that’s rare.

Yet, we use the terminology all the time. For example, resulting from of our testing, it was disclosed that blah, blah, blah. Or, based on our review of the area, it was uncovered that yada, yada, yada. Now, if you’ve got sneaky and underhanded clients, who are going around hiding stuff from you that you truly uncovered and want to disclose to the world, then fine. But most clients don’t do that, and you want to collaborate with them in the future.

Imagine how you’d feel if the external team you hired to do your Quality Assurance Review (QAR) started telling everyone, verbally and in writing, what their work (and only their work) disclosed and uncovered in your internal audit department? How would you react to that? “Disclosed” implies that something was formerly a secret and now you are airing the dirty laundry out for the world to see.

So, maybe we need to back off the “disclosed” and “uncovered” language, at least a bit. Options might include, “along with management, we identified …,” “taking full stock of the evidence, it can be concluded that …,” “testing demonstrated that …,” or similar language. Just don’t use “revealed” instead. That’s just as bad.

5. “Entrance” and “Exit”
OK, you may need to bear with me a bit on this one.

We’re going to start an audit project, and our first meeting with the client is called, in many companies, an “entrance meeting.” Then, when we’ve concluded all our fieldwork, what do we call the last meeting with the client to wrap things up and ride off into the sunset to work on the audit report for weeks on end? The “exit meeting.” They are decent terms, descriptive of exactly what they are … our entrance (ugh, the auditors are here) and our exit (yes, they are leaving, let’s party).

Let me ask you this, though. Is this audit, the one you are doing an entrance into and an exit from, the first and last time you will ever see these folks? I sure hope you have an ongoing relationship and are interacting all year long, or at least on occasion. If that’s the case, there is no entrance and there is no exit because, like the song Hotel California, you may never leave. And, if you’ve done your relationship management right, they are happy about that.

The point is that “entrance” and “exit” are old-school terms from when we did things on a cyclical basis and may or may not come back. Back then, relationship-building was less important and audits had a fixed beginning and end. So, maybe we need to stop calling them “entrance meetings” and “exit meetings,” and just call them something else that isn’t so clinical and auditor sounding. Schedule your Project Introduction Meeting at the beginning and, maybe, your Project Wrap-Up Session at the end, or something like that. And, if you are well down the path of an agile implementation, all that entrance and exit stuff becomes moot anyway.

6. “Consulting”
Back in 1999, the Institute of Internal Auditors introduced the well-accepted and globally codified definition of Internal Auditing as: “An independent, objective assurance and consulting [emphasis added] activity designed to add value…” Back then, the word “consulting” was viewed positively. And, for internal audit to be positioned to not only provide assurance, but to also be viewed as a consultant? Well, to borrow a ’90s term, that would be “da bomb!”

But, somewhere along the way, the word “consulting” came to be viewed less positively, and we’ve started to insert the word advising to soften the term. Should we blame consultants for tarnishing a good word, and making people view consultants and, in turn, consulting, negatively? Perhaps, but that’s not the point.

We all want to be advisors, and the gold standard, the place to be, the coolest accolade, would be to be trusted and be an advisor. So, in our pursuit of being that vaulted trusted advisor, let’s drop the word consulting from our vocabulary, once and for all. Look, your clients might want to “consult” with you, but hopefully you are “advising” them.

7. “Satisfactory”
Often, we as auditors don’t want to overcommit, and use words that might get us into trouble later if something is determined to be different than our work concluded. There is just so much we can evaluate and then we must draw a conclusion and move on. So, we settle on words like “satisfactory,” even if things are notably better than the word implies. From an internal audit perspective, we are hedging out bets. We don’t want to be overly flowery with praise, and just conclude something is either “satisfactory,” “needs improvement,” or “unsatisfactory.”

Put yourself on the other side of the table. Let’s say, for instance, you’ve worked hard at something, gone the extra mile, and made sure it was done exceptionally well. Then, someone comes in, looks it over, and decides that things seem “satisfactory.” Ouch, gut punch! You put in a ton of effort, expected to get an “A” grade, and the professor gives you a “C.” That’s kind of deflating.

Let’s not forget that the word “satisfactory” means acceptable or good enough, but not outstanding or great. Yes, there are reasons to fall on the crutch of concluding, placing our highest auditor grade on something, that it is “satisfactory.” But, perhaps, if we can avoid it, we take the risk, rely on our work, and conclude that something better than a measly “satisfactory.” Don’t be afraid to say if something is exceptional, great, works well, or exceeds the requirement.

The Last Word
There is a lengthy list of good reasons, justifications, and rationalizations for why we use the words we do as internal auditors. Many of them have stood the test of time. Many are in use, and still exist, because we are hearing the world through our own ears, and not our clients’.

If we stop for a minute, and consider what these words sound like and what they actually mean, and the impressions they may leave on the ears of our clients who hear them, perhaps they are not the best words to use. Perceptions are reality, and if you want to change perceptions, maybe one way to do that is to change our vocabulary. In other words, say what you mean and mean what you say.

Audit International are specialists in the recruitment of Auditors and various Corporate Governance Professionals including Internal Audit, Cyber Security, Compliance, IT Audit, Data Analytics etc across Europe and the US.

If you would like to reach out to discuss your current requirements, please feel free to reach us via any of the following:
Calling
– Switzerland 0041 4350 830 59 or
– US 001 917 508 5615
E-mail:
– info@audit-international.com”