Five Things Not to Say During an Internal Audit Entrance Conference
Richard Chambers, CIA, CGAP, CCSA, CRMA, shares his personal reflections and insights on the internal audit profession.
If you have been in internal auditing for a few years, you’ve probably seen it happen. When you start your entrance conference, everything is going smoothly. You’ve prepared carefully for the meeting, and you have cordial relationships with your audit clients. Suddenly, however, your clients are frowning, and communications seem to have become a one-way street. It’s almost as if a door had closed. Management’s arms are crossed defensively, and they no longer seem to want to agree with anything you say. At times, you might not even be aware of why the change took place — you only know that the chance for open communications and sharing of ideas seems to be fading away.
What went wrong? You might never know. But even if you don’t know why the last entrance conference deteriorated so rapidly, there might be a way to help ensure it doesn’t happen again. Every situation is different, but here are a few specific statements that often seem to raise hackles during entrance conferences.
- “We are here to help you.”
It’s always helpful to establish and maintain a cordial tone throughout the entrance conference, but sincerity is key. Clichés such as this are often referred to as “the oldest fib in internal audit.” The second oldest is management’s response, “We’re glad to have you.” Your client might be happy to see you — or you might be just about as welcome as the last government auditor who reviewed your personal income taxes. If that’s the case, your cheerful opening comment might unexpectedly fall flat.
- “We are here to audit you because your area came out ‘high’ on the risk assessment.”
Signals at an entrance conference that internal audit has already concluded there are problems often create tension with management. Hopefully you are there to assess the effectiveness of controls and risk management — if you think about the engagement from management’s point of view, you can probably think of a more compelling explanation for your audit than this.
- “Our objective is to assess the overall effectiveness of your area.”
It is important to articulate potential audit objectives as clearly and concisely as possible. Broad adjectives such as efficiency or overall effectiveness are difficult to assess unless there are widely accepted criteria. And at times, statements about assessing “overall effectiveness” can give an over-anxious client the jitters. The implication might be that you are on some sort of “witch hunt” from which they cannot possibly emerge unscathed.
- “We will brief you on the results at the conclusion of the audit.”
Communications must be continuous. Holding the results until the end of the audit will invariably frustrate management and reinforce the stereotype that the internal auditors have a “gotcha” mentality. It’s okay to let your client know that you will talk with them at the conclusion of your visit — but only if you also make it clear that there will be no surprises during that meeting. An entrance conference should help to soothe unnecessary fears, not create anxiety about how the audit might end.
- “We don’t have anything to tell you today. We just wanted to know if you have any questions.”
If you hold a meeting without having anything to say, you are not just missing an opportunity — you are wasting management’s time. An entrance conference should be about sharing information, and you should prepare in advance to share information such as how the audit came to be, preliminary objectives, projected milestones, introduction of team members, and what is expected of management. If you don’t have anything to tell your client, stay in your office.
An internal audit entrance conference should be much more than just a moment to say hello at the beginning of a new audit. It is our opportunity to make a strong first impression, to create healthy working relationships, and to motivate our clients to work with us toward positive outcomes. The entrance conference can set the tone for the entire engagement. Unfortunately, however, an entrance conference can also be a point at which working relationships are damaged. Too often, mistrust is created or other barriers are established simply because of a misplaced word or thought at the beginning of an engagement.
We only get one chance to make a first impression. Let’s make it a good one.
Posted on Dec 5, 2011 by Richard Chambers
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