How to Handle the Routine Audit Stop

It can happen to anyone. You’re working, minding your own business, when you see the flashing red lights of an audit stop. You might not even be doing anything wrong, but routine audit stops know no right or wrong – they just happen. Remember, as long as you don’t have anything big to hide, act natural, treat the auditor like a professional (they have to make a living like the rest of us), and everything will be okay. (This brochure has been designed for minor incidents; those situations where you don’t have anything big to hide. If you would like to prepare yourself for those situations where audit bursts down the doors with spreadsheets a-blazing, you might be interested in our other brochures “So You’re About to Get Caught With Your Hand in the Cookie Jar” or the absurdly popular “So Your Shenanigans are About to Bring Down the Company.”)

The first thing to remember is that, contrary to popular opinion, the auditor is a person just like you and me. Yes, they have a thankless job with low pay and little respect (and a limited chances for advancement and a budget that doesn’t allow them to get much of anything done and offices in the basement, [for additional embellishments, see our brochure “Why Your Life is Better than an Auditors"]), but they are human too. At least, close to human. So treat them with the proper respect.
When the auditor comes up to your window, don’t make any sudden moves. The most dangerous part of any audit stop is that first encounter and you want to make sure the auditor knows you don’t have anything to hide.  There is no need to start trying to find your documentation until you know just what information it is the auditor wants. Be a friend. Open the door, pull out a chair, open the window. But don’t try and second-guess the purpose of the routine audit stop.
Which brings us to our next point. Very often, the auditor will first ask if you know why he has stopped to talk to you. There are two schools of thought on how best to answer. The first is to go ahead and admit your infractions with the idea the auditor may go easier on you. For example, you know you didn’t review those last expense reports before signing them, or your quality reviews are a week behind. These are small infractions, and it will only irritate the auditor to have to dig and find them himself. However, the other school of thought is to deny everything with a sincere “Why, no sir. I have no idea. What might be the purpose of your visit?” Those who favor this approach feel that, by telling the auditor your infractions, you may admit to something the auditor didn’t even know you’d committed. For example, you tell the auditor you know your error rate has dropped to 85%, but he was only stopping by to find out if your boss was properly approving vouchers.
Next, never show the auditor up or make him feel small by showing how much more you know than he does. We all recognize that auditors will never understand your area as well as anyone else in the company, but there is nothing to gain by rubbing his face in it. Say you work with the BR549 but the auditor asks about the TPS, most people would want to just laugh in the auditor’s face. This will not end well for you. Not only will the auditor refuse to listen to any explanation you might provide, you will also still be held accountable for the BR549.  If possible, just ignore the faux pas and try to change the subject.   However, if the auditor insists, then gently explain the difference. Such phrases as, “I get those confused all the time myself” while, blatantly untrue, will help the auditor feel like he is part of the team.
Finally, it is a very rare situation where you will receive just a warning from a routine audit stop. Auditors have a quota to meet just like everyone else, so it is likely you will receive one or two findings. (If you haven’t paid attention to our prior advice, that number will climb quickly.) Further, under no circumstances should you try and bribe the auditor. While it is true that all companies are corrupt, one of the last bastions for ethics seems to reside within audit departments. Sure, there is a chance you will get away with it, but the ramifications of misjudging the auditor with whom you are working are not worth the trouble. There are many stories out there (quite true we might add) about people who tried to bribe auditors and were then hauled down to the audit department where they were forced to wait in rooms which had nothing but 10-year old Internal Auditor magazines, then subjected to long lectures on the edifying nature of various control models, and sometimes forced to listen to live readings of the red and yellow books
That is a quick overview of how best to handle the routine audit stop. In Part II we will provide an example of a routine audit stop that goes quite nicely, and one that goes horribly wrong.

Posted on Feb 23, 2011 by Mike Jacka

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  1. Hi Mike,

    I have been reading your blog and find it very interesting. I have a problem on which I am seeking some senior level advise. Since you have by far more experience than me, I thought of asking you. Will really appreciate your opinion.

    Here is the problem:

    X group of problem employees use a blogger A to stalk Y. Blogger A has been given a story that some organization wishes to do it, and senior managers have approved it. Now blogger A does not have any reason to doubt the statement since the blogger is interacting with some senior people.


    However, the blogger is being misused unknown to him/her. The X group of employees are problem employees and they have ganged up against Y. They are using the company resources, and are lying to the CXOs about what they are doing. They basically are misleading the person whose name is being used and the blogger. They are also threatening Y to disclose confidential details of fraud investigations since they will be able to blackmail the CXOs

    My advise to the blogger would be to contact the real seniors and find out the true story before committing something unethical and unlawful. Specially is very senior CXOs name is being misused.

    According to you what should the involved people do?

    Kind regards,

    Sonia

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