The Art of Communication
Good interviewing skills are an essential tool for every successful internal auditor
The most important audit evidence comes from people rather than documents - employees, at all levels, are the ideal resource for information gathering because they have day-to-day operational knowledge. Often, they are aware of weaknesses and flaws in their areas, but they may not have had the opportunity to voice their concerns or ideas on how to tighten controls. When performing an audit, it is vital to gather all information needed to accurately evaluate an organization and to propose needed changes to procedures. The audit interview is a valuable tool the internal auditor can use to help uncover fraud risk and internal control issues.
"Interviewing is one of the core skill sets for any auditor," says Dan Abrams, manager of Internal Audit at Jacobs Engineering Group Inc. "I won't even hire someone who can't demonstrate the fundamentals during their hiring interview." In The IIA Research Foundation's recent Common Body of Knowledge study, respondents from all four categories - chief audit executive, audit manager, audit supervisor, and audit staff - rank interviewing among the top five most important technical skills for an internal auditor to possess.
According to instructors of several IIA seminars on improving communication skills, some of the most important components of the interview are preparation, setting the mood, asking the right questions, practicing active listening, and closing the interview. Using these steps can help you perform your job and establish a good working relationship with the organization's employees. "When the employees feel comfortable that I'm not out to get them, they open up a great deal," says Danny Clark, CGAP, an internal auditor in the Plano, Texas, Independent School District. "They are a great source of information for by-passed controls."
Prepare for the Interview
Lisa Hirtzinger, IIA manager of Curriculum Development, has taught many IIA seminars that offer tips on interviewing. According to Hirtzinger, planning is the first step in all good audit activities. Learn about departments and personnel in advance - organizational charts, standard procedures, job descriptions, process flows, business plans, and previous audit reports are all great resources. The International Standards for the Professional Practice of Internal Auditing (Standards) states that internal auditors should use analytical audit procedures to identify information to be examined that might contain contrary conditions.
Standard 2310 says you should use this analysis to prepare a list of the vital information you're expecting to get during the audit activity, with a specific script of questions or bulleted points to stay on track. "If you're not prepared, your interview will not be successful," says Richard Matarante, director of Fraud Investigations for New York Life Insurance Co. and IIA conference speaker. "I have seen many interviews crash and burn because the interviewer did not take the time to prepare."
Start with general questions; then get more specific. Set the structure of the whole process, from beginning to end, to make sure you don't leave out any important questions. "I usually prepare by scripting my questions, so I have a general idea of what the important issues are," Matarante says. "I want to make sure I don't forget any of the topics I want to discus. Although I don't follow the script verbatim, it is a guide to keep me on task."
Determine with whom you should schedule interviews. David Griffiths, compliance manager and trustee for the United Charities of Able Collin in the United Kingdom, advises talking to as many people as necessary to fully understand the risks inherent in the system being audited and the controls that should be operating to manage them. "It's important to start the audit by interviewing the senior management," he adds. "This should give the auditor an understanding of the strategy and high-level risks in the operation - and an impression of competence and integrity of the management."
Set the Mood
It's crucial to create a comfortable environment and to assure interviewees that they can speak freely. "Confidence in the auditor and audit process is essential, because people who understand the reason for the audit are usually more helpful and willing to use the time to showcase problems," Abrams says.
"The real key to any good interview is being able to establish a rapport with the person," Clark says. "If you don't do this, you'll get little information beyond the preplanned questions." Magdy Mossaad, CIA, CCSA, senior auditor at the Mayo Clinic, who teaches some IIA communication seminars, agrees. "A good handshake, exchanging pleasantries, and even commenting on a noticeable item in the interviewee's office will help put them at ease."
Explain the process to the interviewee, and tell them to feel free to ask questions and offer their ideas and comments at any time during the discussion. "Interviews should always start with the reasons for the audit and the reporting process, so people understand what the consequences of their honesty might be," Griffiths says. "Once the staff's confidence of the staff is gained, it may well be useful to have several brief interviews with them during the course of the audit."
Ask the Right Questions
According to the late Lawrence Sawyer, CIA, author of Sawyer's Internal Auditing and often called the father of modern internal auditing, one of the most important ways internal auditors gather information is by asking open-ended questions. A good technique to stimulate a sufficient response is to ask open-ended questions that specify a broad area and can't be answered with a yes/no or a brief sentence. Some key words to use are: describe, identify, expand, elaborate, suggest, recommend, discuss, and review. "These questions should elicit more conversation out of the subject, Matarante says. "The goal is to get them to talk as much as possible - the more they say, the better the information you receive."
Sawyer also says that when seeking information, internal auditors "should not hesitate to ask the most simple-minded of questions; for the simple questions could well uncover something someone would rather not reveal, which will then call for more probing." Abrams says he has asked people directly, "What's wrong?" "They will often tell you because no one has listened to them before," he explains. "I've also played ignorant and asked 'Why?' again and again. They often end up backing into an issue just by following their own logic."
Listen Actively
There is a difference between hearing and listening. Active listening -listening for meaning - is a vital tool for good communication. When someone is speaking to you, your mind can drift. Instead of listening, you might be thinking of the next thing you want to say, or even mentally preparing for your next interview. Either way, you are only hearing a portion of what the speaker is saying. "Interviewers should not talk that much. They should ask the question then listen for the answer and study the speaker's body language," Matarante says.
"It is important to remember that while you are studying the speaker's behavior, the speaker is also taking clues from you," Matarante says. "It is critical that when asking key question, we don't influence the subject by our actions." Many behaviorists claim that more than half of communication is nonverbal. Therefore, to fully understand the entire context of a conversation, interviewers need to be aware of things such as eye gaze, body posture, and hand gestures. "Observing body language, maintaining eye contact, and paraphrasing when needed will ensure both parties have the same understanding of the issues," Mossaad says. "This level of understanding will help you have better documentation of the interview."
Matarante also suggests taking advantage of silence, as many people get nervous when a conversational pause occurs and feel they need to keep talking. "Allow the subjects to answer fully and do not interrupt them," he adds. "The point of the interview is to gather information and good listening skills are vital to the process."
Wrap It Up
Bring the interview to a successful close and inform the client of the next step. "At the end of the interview the auditor should look the auditee in the eyes and ask, "Is there anything else you would like to say?" Griffiths says. Summarize what you covered, thank them for their time, leave a card for follow up, and be sure they feel comfortable with the process.
Immediately after the interview, gather all notes taken during the process and document everything you learned while it's still fresh in your mind. According to Standard 2330, working papers should record the information obtained and the analyses made and should support the bases for the observations and recommendations reported. Evaluate the information you obtained and look for discrepancies that might require further investigation.
Hone Your Skills
Effective interviewing techniques are a learned skill - the more you practice, the better you'll become. The IIA offers several seminars to improve your interactions, including "Tools and Techniques for the Beginning Auditor," "Enhanced Communication Skills for Auditors," "Fundamentals of the Audit Process in the Public Sector," and a series of new fraud seminars developed with Deloitte that will be rolled out over the next two years. "By partnering with Deloitte, The IIA will focus a new curriculum on fraud detection and prevention," says Cyndi Summers, CIA, CISA, CCSA, CGAP, CFSA, IIA director of Program Development. "Interview skills are a fundamental part of a good fraud investigation, and many of the courses will offer great ways to hone these skills."
