If You Can't Say Something Nice, It Must Be an Audit Report

Here’s a quick, easy question. How do you report positive things?

This is a topic I’ve seen come up again and again over the years. And, one more time, it has come up within our audit department. During meetings with some of our customers, they questioned why we never report any of the good things that are happening within their departments. We were somewhat taken aback because we felt we had been giving them credit for good work. 
So the question of how positive things should be reported has reared its ugly head once more. And it raises other questions: What, exactly, does an auditor think is positive? Is the statement “Controls are effective” sufficiently positive? Is such a statement as positive as we can allow ourselves to be? What would customers want to see? Do they want credit for clearing up old messes even if the remaining mess leaves a lot to be desired?   Is it impossible to provide good news in a report that has bad things to say? Wouldn’t this job really be a whole heck of a lot easier if we just didn’t have any auditees? (Whoops – may have gone a little too far with that last one.)
I guess the root of this discussion/argument is this:  Should auditors report the good things they have found? If our job is to provide assurance, then is there really anything better than effective? If we list out all the effective things the auditees have done, is that sufficiently positive?
At the outset, I promised a quick easy question. But trying to come to grips with that one question just seems to lead to more questions, and the problem grows heads faster than the Hydra.
So I’ll try to make it simple again. How do you and your audit shop do it? How are you reporting positive things in your audit reports? And has anyone found a way to make their customers happy with the way positive information is reported? (And if anyone feels like answering any of these other questions, feel free.)

Posted on Jun 13, 2011 by Mike Jacka

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  Comments (4) un-categorized
  1. Comment by: Fahad   (6/14/11 09:23 AM)   

    Hi Mike, I always receive such arguments from the auditees, and to say the least I do agree with their point of view. I suggested more than once to my CEA that if we could use the format of the due diligence reports. Where they list an executive summary of major KPIs and major changes in the unit being audited. Also, This is could be useful to give a briefing for the audit committee members, CEO, BOD, and whoever reads the Audit Reports, to put the comments into prospective.

  1. Comment by: Ismail   (6/14/11 12:56 PM)   

    Hi Mike. I suggest to work on the audit objectives in a way to give credit to the auditees same what we do in our company. Based on the audit objectives we will review the adequacy of the internal control system during our audits, and the results are presented in a small schedule in the Executive Summary of the report showing for each objective if the IC is adequate, inadequate or even partially adequate. i think this give the auditees some credit in a positive way.

  1. Comment by: Diane Corsi   (6/15/11 02:03 PM)   

    We structure those findings into sections - Summary of Findings then the narrative of work performed by the dept, major changes or improvements undertaken since last audit giving credit where it is due...If an audit was requested by management in a particular area, this is the most common use of the positive findings especially when no material issues were discovered

  1. Comment by: Mike Jacka   (6/19/11 12:24 PM)   

    Thanks to everyone who commented.  These are some great ideas, and truly actionable (which, to me, seems to be the toughest part about trying to say good things in an audit report.)  Anyone else have anything they're doing?

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