Credibility: The Secret Weapon of Internal Audit Effectiveness

Richard Chambers, CIA, CGAP, CCSA, CRMA, shares his personal reflections and insights on the internal audit profession.

 

As a young auditor, nothing was more frustrating to me than presenting a great audit recommendation or new idea to an audit client (or “auditee” as we called them back then), only to be met with waves of skepticism and negativity. I knew my message was important, but at times it was challenging to overcome the mistrust and fear seemingly engendered by the mere fact that the recommendation came from an auditor.

Looking back on those early audits, I now realize that some of those communications breakdowns could have been avoided. The realization came slowly to me: I didn’t completely understand why I sometimes had difficulty in “selling” recommendations until a particularly frustrating exit meeting. Almost every recommendation from internal audit seemed to engender client skepticism — until the moment when a more experienced auditor joined the conversation. My colleague went back over several recommendations I had presented a few moments earlier, and the recommendations suddenly seemed completely reasonable to our client.

Why were the recommendations so much more persuasive when they were delivered by someone else? I believe the difference was that the senior auditor had built up a solid working relationship with the client and had firmly established his credibility.

Even when internal audit recommendations are sound, it is often difficult for younger or newer auditors to establish a reputation for credibility. The good news is that credibility is a characteristic you can actively work to improve. Hopefully some of the following tips can help you avoid a few of the frustrations I faced early in my career.

1. Maintain the enthusiasm.
We all tend to view people who are enthusiastic and passionate about their work as more credible than those who are not. It’s difficult for others to buy into our ideas when we are seen as ambivalent or negative, especially when we don’t seem to have enthusiasm about our own recommendations.

Maintaining a positive tone is particularly important when we are critiquing others. It’s not enough that we are enthusiastic; we also must help our clients become enthusiastic about the changes we recommend. It’s easier to develop enthusiasm when we maintain a positive attitude and concentrate on solving problems, not on finding fault. The next time you are tempted to say, “You did it wrong,” instead try saying, “Let’s figure out what the problem is and see if there is a better way to do it.”

2. Demonstrate your care and concern.
If you demonstrate that you genuinely care about your audit client and its problems, you will be well on your way to establishing credibility. Yes, delivering on results is critical for personal credibility — but nothing is more critical than keeping relationships positive while also delivering the results. When you show genuine concern for your client, you are also convincing it that your audit recommendations will be in its best interests.

3. Be professional.
It may not always seem fair, but we are judged not only on our ideas and recommenda-tions but on how we present them. If you tend to dress sloppily, use slang or profanity, keep a disorganized work area, show up late for meetings, or chew gum throughout the exit conference, don’t be surprised when some clients assume you also are sloppy about your work. Being organized and professional in your dress, speech, and actions will help to assure your ideas are taken seriously.

4. Communicate continually, candidly, and (almost) completely.
Ongoing communications can solidify your reputation as someone who is open to discussion, even when the discussion involves disagreement. Visibility is also critical: If your co-workers and clients don’t remember your name or face, you have not yet established credibility.

I don’t mean to suggest that you will seem more credible if you monopolize meeting time or bombard other people with huge amounts of minute detail: Listening is as important as talking in establishing credibility. I also don’t mean to imply that discretion isn’t important. Auditors often deal with sensitive information, and nothing can destroy trust and credibility faster than gossiping or failing to preserve confidentiality. Auditors must be particularly careful about agreeing to remain quiet regarding potentially bad situations: You can't be credible as an auditor if you agree to hide anything immoral or illegal, and it might cost you your career.

5. Be responsive and follow through on commitments.
A reputation for dependability is essential for establishing credibility, and following through on your tasks and promises shows your clients and co-workers that you are trustworthy and reliable.

Communication is essential if you are going to miss a deadline or commitment; but even if you communicate with all parties about the delay, making too many excuses will eventually destroy your credibility. Perhaps the dog really did eat your audit report, but that won’t change the fact that the report was not delivered when it was promised. When it comes to establishing credibility, results are more important than excuses, so it’s important not to make promises unless you are sure you can keep them.

6. Be prepared.
If you are not prepared for meetings or don’t know what you are talking about, you have no credibility no matter what else you might bring to the table. Preparedness is especially important for auditors because each new audit brings us into a new working situation. Asking questions is key to successful auditing and can help build credibility, but it’s important to do your homework first so that you don’t ask unnecessary questions.

If you have not prepared in advance by learning about your industry and reading files of previous audits, for example, you are destroying your own credibility and wasting management’s time.

7. Get it right!
As Nathaniel Hawthorne said, “Accuracy is the twin brother of honesty; inaccuracy, of dishonesty.” Regardless of whether an inaccuracy is a careless mistake, a deliberate exaggeration, or a downright lie, an auditor with a reputation for inaccuracy is always going to have a credibility problem. If you’re not sure of your facts ... check them. If you’re not sure about your audit procedures … get a second opinion.

Building credibility takes time, but a solid reputation for trust and credibility can follow you for the rest of your career, and for auditors it is always well worth the effort. I have shared a few of my favorite tips for establishing credibility, but many other factors are important. If you have witnessed other ways in which an auditor rapidly gained (or lost) credibility, please share them with us. We’d all like to learn from your experience.

 

Posted on Jul 2, 2012 by Richard Chambers

Share This Article:    

  1. Interesting article
  1. Thank you for sharing those tips!

  1. Credibility is one of the most important elements to success in auditing.  I especially like points 2, 3, 4 and 5.  Demonstrating your concern is probably one of the most essential tasks in building your credibility.  I recently wrote an article titled “Building Credibility With Audit Clients” (http://goo.gl/xrbmr)  where I outline 3 possible steps…(1) Care, (2) Collaborate and (3) Communicate.

    Thank you for another great post. 

  1. Thanks for that wisdom, Richard.  I like to think of every auditor having a Balance Sheet.  Each day we try and increase our Assets side, while reducing our Liabilities side.  Thanks for reinforcing the point that Credibility is our biggest asset.

  1. Sir, I am just 6 months into Internal Audit. The way you provide your insights are a great source of our foresights in the field of Internal Audit. I do relate myself some where or the other in all your blogs. thanks for the same.

  1. Richard;

    The issue of effective delivery of audit observations I think is a very important one for the profession to have. 

    In many cases internal auditors are pointing out what they have concluded are "control deficiencies" or "areas for improvement.  In each case what the internal auditor is implicitly saying is that they have concluded that the current residual risk status is currently outside of the organization's risk appetite.  How the auditor has concluded this isn't always obvious or reported.  In all too many cases the recipients of the audit "finding" perceive the dialogue with the internal auditor to be a "critical parent/child interaction".  

    I believe the role of internal audit is to ensure management, senior management and the board are aware of the current residual risk status related to the achievement of important objectives.  If management, senior management and the board are all OK with the current residual risk status and potential impacts on the organization internal audit's job is done.  This elevates the IA/client interaction to adult to adult and significantly reduces negative reactions.  Management can and should be able to accept any level of residual risk as long as they are prepared to have their decision and the potential impacts shared with those above them and accepted. Taking risks intelligently is key to long term success.

  1. Very good and important information about effectiveness of internal audit. It helps to make organization to work properly without any frauds. Communication and preparation is important for internal auditing.

Leave a Reply