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00:00:02 Speaker 1
The Institute of Internal Auditors presents all things internal audit tech in this episode, Andrew Guasp talks with Alex, Quiche about the importance of emotional intelligence or EQ in the internal audit profession, especially in the context of AI advancements. They discuss how EQ can enhance internal audit effectiveness.
00:00:23 Speaker 1
The role of empathy and communication and the impact of cultural differences on EQ. From active listening to handling difficult conversations, this episode unpacks the human side of internal auditing.
00:00:35 Speaker 2
Hey, Alex. Thank you so much for joining.
00:00:37 Speaker 2
Us today can.
00:00:38 Speaker 2
You start with the defining emotional intelligence EQ, and why it's particularly important for internal auditors. Good.
00:00:44 Speaker 3
Question. Thanks for the opportunity. First of all, I think AI is automating and making it very easy for all of us to get the information that we need contextually. So for example, you know, my teams work on audits of information security. It's very easy for my 22 year old coming into the workforce to be able to learn as much as I know.
00:01:05 Speaker 3
In the next two or three years.
00:01:06 Speaker 3
Using AI, the importance at this point in terms of emotional intelligence is to be able to connect the dots. I think you know, AI can automate the piece that talks about information, but if you've been in the working force for a long time, then you can be able to connect the dots better. So EQ in this case is a motional component of it.
00:01:27 Speaker 3
Once you master your own emotion, you know what you do and how you do it very well. And then you could be able to connect with other people as well.
00:01:35 Speaker 2
Very nice. So with the rise of AI in auditing, how do you see the role of EQ evolving within the profession?
00:01:43 Speaker 3
There's a need for us to make sure at least we dial up EQ as much as possible. I always tell my team that in the next couple of years there's going to be a point where we'll do a 10 day audit, you know, place where you click the button and it gives you the whole report. We're very close to that. Given the technological advancements that we have.
00:02:03 Speaker 3
But what happens is that once you have that information, then how do you socialize that information and the output of that information? You need to be able to connect the dots. You know the instances where you have something seems right based on the output of a technology, but you always want to step back a little bit and connect the dots and say who do I need to talk to? Do I need to talk to John next to me?
00:02:23 Speaker 3
Who might know something else on the cyber security side that I haven't considered? Would I need to be able to connect the dots on what's happening in the industry to make sure at least it's complete and accurate in terms of reporting?
00:02:35 Speaker 3
It's really, really important for us to dial up EQ.
00:02:38 Speaker 2
So AI is transforming many aspects of internal audit, from risk assessments to fraud detection. These 10 day audits, like you're talking about, what are some areas where human judgment and EQ remain irreplaceable?
00:02:51 Speaker 3
The training of AI is really, really important for us to be in the loop, so it's a concept of, huh?
00:02:58 Speaker 3
In the loop, you need to make sure at least at the beginning, as you're training the technology, that you're present and you're engaged enough to be make sure list it's answering the right questions. There's also an aspect of making sure that at least it's reasonable in its output that will always be there, that it gives you something you want to make sure it's right.
00:03:18 Speaker 3
I'll give you an example of maps. Sometimes I click on something I'm going to Disney World where in Orlando right now, and I know it's left, right, left.
00:03:27 Speaker 3
But maps is telling me something different. You always have the option of overriding that based on your personal knowledge on something so human in the loop will always be needed along the way. First of all to train and then to continuously train and fine tune the results of what you're looking for.
00:03:45 Speaker 2
So how can auditors balance techno expertise with soft skills like empathy, self-awareness, communications and this AI driven environment?
00:03:54 Speaker 3
Continuous practice. You know, I think continuous practice is just being present. I think from an auditor perspective, we should also have some sort of soft skills training. I'll give you an example in our audit shop where we require folks to do about 40 hours of training, 40 hours of training. Twenty of those should be on soft skills negotiation.
00:04:14 Speaker 3
Clear communication leading with empathy. That should be very, very important, as important as the technology side of.
00:04:21 Speaker 3
Things.
00:04:22 Speaker 3
So being intentional and then practicing that intentionality after that.
00:04:28 Speaker 2
What are some practical ways auditors can use EQ to bridge the gap between the AI insights and stakeholders engagement?
00:04:35 Speaker 3
There's always a painful period where you identify issues.
00:04:40 Speaker 3
And you're trying to socialize the issues with the business area and this is where you need EQ.
00:04:45 Speaker 3
I heard this quote yesterday is that you should always lead in, not with an exclamation mark, but a question. So for example, hey, I'm seeing this in the data trends. What are?
00:04:57 Speaker 3
Thoughts about this as opposed to hey, everything is broken. Let's go ahead and fix it. You need to be able to fix this.
00:05:03 Speaker 3
This was broken six months ago, so I think leading with that emotional intelligence helps a lot. You know, also just putting yourself in the other person's shoes, understanding where they're coming from, it's really, really important. Sometimes auditors have been told they are a little bit more.
00:05:18 Speaker 3
Logic. So just pausing a little bit and just understanding what the other person is feeling at that moment, reading the room helps a lot and that comes in with a little bit of mastery of yourself and then mastery of your audience.
00:05:31 Speaker 2
So kind of going off that basis of mastering this EQ and this emotional intelligence, how did you and your career go about mastering these concepts?
00:05:40 Speaker 3
On a personal level, I played rugby.
00:05:43 Speaker 3
Yeah, rugby is a team sport. It's all about making sure that at least you're passing the ball. And how do you pass the ball? You pass the ball by having conversations and you view the term that's used. If you wall ball, if you wobble, you don't do it right. Someone is not going to pass you the ball. So there's a lot of communication that happens off the pitch.
00:06:03 Speaker 3
So part of that was making sure at least you're developing that EQ and seeing the body language. If I pass the ball to someone and they wobble or I wobble, I can see how *****.
00:06:13 Speaker 3
Yeah. So growing up from a team sports perspective and also raising my own kids where I coached basketball, I was able to learn it's all about communication and being engaged with one another. That's how you win. So transposing all of that into the working world, I spent time on not just the third line, but I've also spent time on the first line.
00:06:35 Speaker 3
And the second line, what that means is that I'm able to see how the other folks are thinking at a point in time as a third line function. We have a lot of power.
00:06:44 Speaker 3
So if I understand what the person coming in the controller coming in their thought process, when you have some significant findings I can say, hey, let me just take it a little bit easier. Let me have some small talk at the beginning. Let me understand their perspective 1st and that goes a long way.
00:07:01 Speaker 3
So in my personal life, growing up team sports with kids, I was able to make sure at least that was fostered within the team and then also in my professional career I've been able to see all sides and where I sit now as an executive, I can be able to look down and see people who are successful.
00:07:18 Speaker 3
Are the people who dial up their EQ more than just dialing up their IQ? IQ will only get you to a certain place having some sense of EQ gets you further and even more so now.
00:07:30 Speaker 2
Kind of going along the lines of this EQ and we're kind of transitioning a little bit talking about these findings that you have in these auto reports. Do you find that you and and kind of going on the line of success career wise when you have high EQ, do you find that your audit finding communication is more successful when your team imposes better EQ?
00:07:52 Speaker 3
Generally yes, but it depends with the audience as well. It's always good to dial up your EQ 100% of the time that you're in there and engaging with them. But there are times on the other side they want facts, so stick to the facts as much as possible. Do the best that you can on your side, but the other side sometimes might play hardball, but if you continuously.
00:08:12 Speaker 3
Dial up your EQ. It helps. But to answer your specific question, yes, EQ always wins.
00:08:19 Speaker 2
Do you feel that you get better experience EQ wise with the training or more hands on experience by being in some of those first line second line roles?
00:08:29 Speaker 3
Helps. I also do a lot of observing. I learn people. I learn when people are presenting. I learn people who are actually non auditors even more, you know the best people to learn from my sales people. When you go in and they're leaning in and the way they're asking certain questions, it helps you actually. So once you're conscious about what it is.
00:08:51 Speaker 3
And then you can be able to observe and learn from it throughout your life. You can be able to see things that people are doing much better than others.
00:08:58 Speaker 2
Do you find that some of the AI driven audits, when layered in with our the the personal element of it, the emotional intelligence of a human being, drives a better audit than just the human alone? Or just the AI alone?
00:09:13 Speaker 3
Absolutely. If you lay in a queue, you're going to be very, very successful.
00:09:19 Speaker 3
And this because AI tells you something, then what do you do next with that you want to be able to provide a little bit more context in this case, what I'm looking for is anomalies in, for example, accounts payable process. Then what does that mean? What's a big pick?
00:09:36 Speaker 3
You can always get that information from AI. It will give you the information, but it's going to be generic. You have to customize it to your audience. The best way that you can. And again it comes back to if you master yourself and you know yourself well, then when you're engaging with other people you can be able to engage.
00:09:53 Speaker 2
With them right? Is there a specific training?
00:09:56 Speaker 2
Program or website, something that you would recommend people to to go to for emotional intelligence.
00:10:03 Speaker 3
I think Carnegie Mellon has a coup.
00:10:05 Speaker 3
All of them, but just being a continuous learner helps a lot. I can't think of any at the top of my mind, but I have a business has a couple of white papers that have come up with that really, really help. I also listen to a lot of.
00:10:19 Speaker 3
Speakers.
00:10:20 Speaker 3
I listened to a podcast, a diary of a CEO.
00:10:25 Speaker 3
It's a British guy. He brings in a lot of people who speak about EQ and the importance of.
00:10:31 Speaker 3
And.
00:10:32 Speaker 3
You know, grew up with Oprah. Listen to Oprah all the time. She talks about life. And one thing that you see consistent is that the people who make it are the people who are intentional about EQ. And it's even more important right now the currency of information is going to be.
00:10:49 Speaker 3
0.
00:10:50 Speaker 3
So you and I, let's say.
00:10:52 Speaker 3
We're going to audit something new.
00:10:55 Speaker 3
We can get up to speed to it, you know, in two or three hours you could have a an audit program. I could have an audit program, but the way you, you and I will win is the connections that you have.
00:11:07 Speaker 3
The ability to rise up from where you're sitting and going in and talking to John next to you.
00:11:13 Speaker 3
Or talking to Sally on the other side, or making a connection with a conversation that you had a week ago that helps.
00:11:20 Speaker 2
When it comes to audit issues and working with people coming up with the remediation plans.
00:11:25 Speaker 2
Do you find it is easier when there is high emotional intelligence involved in the conversations?
00:11:31 Speaker 3
I wouldn't look at it. High emotional intelligence or not, I think you know, in any engagement that you get into, you always want to think about what you can do as a person. It's always a very sensitive subject when you come up with issues, you don't know how someone is going to to react, you are.
00:11:48 Speaker 3
Or don't. If you've ever been audited, you know how it feels and everyone is stands, and it's very easy for people to not react the right way. So that might not showcase the best EQ in that case. But what you can do on your side is just be the best that you can on your side. Dial up the EQ. Understand.
00:12:09 Speaker 3
You know, lead with empathy, understand where they are at a point in time, and that's what's going to solve the problem. Sometimes when people get feel seen and heard.
00:12:18 Speaker 3
It helps a lot when I say, hey, this is a couple of opportunities to improve our process. That changes if I say these are findings that we need to fix immediately, that changes the tone. So the choice of words and also leading with empathy helps a lot. And that's all about EQ. What you can do on your side. It's amazing. You know, sometimes you get into an engagement.
00:12:40 Speaker 3
And the first two minutes, you just have small.
00:12:42 Speaker 3
Talk.
00:12:43 Speaker 3
I'll talk about my kids. I'll talk about the game. Oh, I'll just smile and take it easy and say, hey, we're all solving this together. Small words can change the direction of where you're going in terms of that conversation. So going back to your question is focusing on yourself and the intentionality of dialing up EQ at every moment.
00:13:04 Speaker 3
To engage helps a lot.
00:13:06 Speaker 2
Do you find that even like I know we've been talking about like the back end of the audit, kind of more in the reporting process, but taking it back to to the front side of the audit and the planning, do you find that when emotional intelligence is incorporated that you kind of maybe you're offered more information from people because they feel more connected?
00:13:26 Speaker 2
On a a personal level.
00:13:28 Speaker 3
Yes, you know, the idea is always to be nice and engage and be present and make sure that at least you're listening in to what the stakeholders are letting you know at that moment in time. If people feel seen and heard, then they engage. If they don't feel seen and heard, they don't engage. So it's not a switch on and off.
00:13:48 Speaker 3
I'm going to dial up my emotional intelligence. It's just P as nice as you can at the front end.
00:13:54 Speaker 3
And then you know you'll you'll be able to receive a lot of really good insight. Sometimes they tell you, hey, there's nothing in here. Sometimes they just let you know. Hey, I think I'm worried about this, but that engagement does not start at the moment in time that you're doing the audit. Sometimes it might, you know, but you want to make sure, at least it's a continuous engagement that helps you with the relationship building.
00:14:16 Speaker 3
So when I'm coming in, I'm saying, hey, Mike, I'm here and we're looking at this most of the time, they'll say, you know what, I know this person and this is what they do. And they're focused on looking for opportunities as opposed to just finding things.
00:14:30
Yes.
00:14:31 Speaker 3
To change of words, change of engagement goes a long way.
00:14:36 Speaker 2
We talked about kind of just opening the meeting with maybe a couple of questions. I know everyone always talks about like oh, it's so annoying all this small talk, but do you think that small talk is essentially the the gateway to starting that emotional?
00:14:51 Speaker 3
Word choice is the gateway into emotional intelligence and just strategizing the meeting that you're getting into. I'll give people. I always tell folks this is that whenever I work for with stakeholders in other countries, always try and learn a little bit about their culture. If I'm working with people from the Nordic countries, let's say.
00:15:12 Speaker 3
Germany, Denmark. It's different. The small talk won't cut.
00:15:17 Speaker 3
Because you're wasting my time if I'm working with my stakeholders. Let's say in India or in Africa, it's really, really essential for you to have that connection even in the US, it's the same thing. If I'm talking to someone in Tallahassee, you know, compared to someone in Chicago, it's gonna be very different or New York. It's gonna be very, very different.
00:15:37 Speaker 3
So just knowing how to come into the conversation with strategy on how to engage helps a lot. Word choice means a lot too.
00:15:45 Speaker 2
So it sounds like emotional intelligence goes beyond just the words, but also understanding the cultural norms with whom you are working.
00:15:52 Speaker 3
With yes, my team is multi generational and I love it.
00:15:56 Speaker 3
Because I see myself in each one of them so and I'm able to engage with them the way things were. So coming up, things were very formal. So in as much as you want to dial up the informality with EQ, some people are never going to be.
00:16:13 Speaker 3
They still want the formality. Hey, my name is this and this. This is what their agenda is. The younger generation might start a little bit different even before they start. They might be sending a chat message to the person on the.
00:16:25 Speaker 3
Outside and in that case, they're already engaging, so by the time they come in, hey, good to see you. Did you go to softboard over the weekend? You know, how was it? And that's the engagement. The way of of, of being able to engage, you know? So it's also multi generational. But it's also something that I always say is that it's not one and done in terms of learning, it's continuously.
00:16:46 Speaker 3
Learning and engaging with people.
00:16:48 Speaker 2
Kind of going along those lines of the multi generational, I know the talent pipeline for you know audit in general, everyone seems to be very concerned about that from the AI side. I think the consensus is that they'll be fine using AI. Do you feel any concerns with their emotional intelligence side or do you think that they may be beyond?
00:17:10 Speaker 2
Some of the other generations.
00:17:11 Speaker 2
That we're not used to that kind of, you know, atmosphere in the workplace.
00:17:16 Speaker 3
Great question, Andrew. And I think the way I would answer it.
00:17:19 Speaker 3
Is.
00:17:19 Speaker 3
That every generation knows how to engage in their own way, so it might not be my formality where I come in in the first minute, I'm dressed up in a certain way. You know, I I give.
00:17:33 Speaker 3
Millennium Smile Millennium Smile is where you have a couple of seconds and you smile compared to the new age where they shake their phone a little bit. Let me tell you something. You know. I'm sorry I'm. I'm just going all over the place. I work for. Mera, if you do it. So I'm. I'm I'm. I'm very engrossed in this and also the new generation.
00:17:51 Speaker 3
They all learn how to engage with each other a different ways. All you have to do is just make sure the list is intentionality in learning what is working in terms of currency at a point in time and the way you do that is by making sure at least you're encouraging people to master their skills and who they are and how they are.
00:18:11 Speaker 3
And then know how to engage with people on the other side.
00:18:15 Speaker 2
To leading a multi generational team, what components of emotional intelligence do you think are of the utmost importance?
00:18:23 Speaker 3
Learning from each other and learning from one another, it's really, really important to do that. Our audience stakeholders are also becoming different generation. The multi generation. You might go into an engagement, you find it's hey, it's a group of engineers.
00:18:36 Speaker 3
25 year old and they build something that's really impact.
00:18:39 Speaker 3
And that's why we can we need to lean in if they say ANC doesn't have breeze, I need to know what that means, cause that's really, really important for me and not get offended. It's a compliment they say oh, but ANC has a nice watch, you know. Nice peace, whatever it is. Engage with people.
00:18:59 Speaker 3
At the right level, so learning how to engage with each other is really, really important.
00:19:04 Speaker 2
So we keep talking about like the data and AI. It's gonna empower people to do all these things, but the emotional intelligence piece seems like it's it's the missing puzzle piece to kind of carry us forward.
00:19:16 Speaker 3
I think it's a piece we're not paying as much attention to.
00:19:19 Speaker 3
Like we should, connections are always going to be there and we'll learn the currency. It's like AI was actually, you know, interesting anecdote a I was able to do a graduate level exam and pass I think 98% which is one of the toughest exams that you ever had and it's learning and it's getting better and better.
00:19:39 Speaker 3
Today I think the examples in statistics, so something very complicated that it wasn't able to do that, but in six months it's been able to learn how to.
00:19:48 Speaker 3
Do.
00:19:48 Speaker 3
That so you can imagine information is going to be available to all of us. We all do.
00:19:53
Yes.
00:19:54 Speaker 3
You have a cold, you have a cough. You go to your laptop and you already diagnosing yourself. I'm like, oh, well, I do this, this, this. So this is what it is. And doctors are already facing that. So it's the same thing in the work environment. When I leading a multigenerational team, someone comes in and says, hey, I want you to look at how to audit this in 15 minutes.
00:20:14 Speaker 3
Hey Alex, do you want to look at this? I already have a plan how to audit. Like I wouldn't doubt them cause the information is available to.
00:20:20 Speaker 3
All of us.
00:20:21 Speaker 2
Then it's on us to take that emotional intelligence, meet our future teams of our oddities, where they're at to get the results that we actually need.
00:20:29 Speaker 2
In the end.
00:20:29 Speaker 3
Yes, being a little bit more intentional and incorporating the concept of emotional intelligence is really, really important because also what happens is that the machines are telling you oh.
00:20:41 Speaker 3
Data is telling you something.
00:20:43 Speaker 3
You don't want to be robotic as you're passing on that information to someone else. Hey, be a little bit empathetic. Maybe there's something that you don't know that they know.
00:20:51 Speaker 3
And that's where the emotional intelligence comes in.
00:20:54 Speaker 3
And going back to your specific question, it is good for us to be intentional about teaching people about technology and its capabilities, but also making sure you're teaching people on the EQ side of things. Being intentional about it.
00:21:10 Speaker 2
So it seems like the data is going to be there, but what's actually going to drive?
00:21:14 Speaker 2
The change is.
00:21:14 Speaker 2
Us and our ability to drive the change will be determined upon our emotional intelligence status.
00:21:15 Speaker 3
Yeah.
00:21:20 Speaker 3
Yes, and and as a leader, any leader coming, you know, coming up, you need to be able to focus on.
00:21:26 Speaker 3
This.
00:21:27 Speaker 3
Because if you're not, then you're not going to be as impactful as you.
00:21:32 Speaker 3
Correct. And going back to the whole talent war concept, you know, not too many people want to be internal auditors.
00:21:39 Speaker 3
Apart from being internal auditors and matter internal audit job, where we do cool things, no one wants to do, the old school kind of things. So the only way that you can attract and retain is making sure at least people can be able to engage with one another from a human level.
00:21:56 Speaker 2
Going through the planning process of an audit, you get up to that point where you got to eventually meet with some people.
00:22:01 Speaker 2
You got to go through their process with them, got to go through the dreaded walkthroughs. How do you feel that emotional intelligence either helps or hinders?
00:22:08 Speaker 2
A walk through.
00:22:10 Speaker 3
Any engagement that you have with someone, especially when they think you're coming in to find something, the traditional audit mindset.
00:22:18 Speaker 3
So every time you engage with someone, especially as an auditor, you should always be aware that there might be an instance or instances where they're thinking that you might be looking for something to find. You're finding something in in the processes, so it's important for you to have that perspective at the back.
00:22:37 Speaker 3
In mind, and therefore just be a little bit nicer, kinder as you're engaging, do your homework as you need to, especially before you do walkthroughs. If you send your documentation, read the documentation ahead of time. Again, the idea is to become as frictionless as possible, especially when you're engaging with your stakeholders. Some of them who've been.
00:22:58 Speaker 3
Working with you as much as possible, some of them who are new to engaging with internal audit, any amount of friction just doesn't work out too well. And therefore for you to be frictionless, that's why you dial up your emotional intelligence. How nice can you be? How engaged can?
00:23:16 Speaker 3
To be how can you lead with empathy? How can you listen in a little bit more? How can you understand their process from their perspective versus your perspective? How can you do a little bit more homework and be more strategic in how you engage? Those are things that you're all supposed to. We are all supposed to do to engage and make it as frictionless as possible.
00:23:38 Speaker 3
And then once we engage, you know, we'll engage the right way sometimes in the era of AI, what you do is that you can do a little bit of pre work.
00:23:48 Speaker 3
You identify a process flow that's not right, and then you come in and justice put it on zoom or somewhere and you're like, hey, this is what your process is. No, that's not the right thing to do. Do a little bit of homework, just find out. Is it true what you have before you start sharing with someone else? Because you can piece you off if someone says this is what your process is.
00:24:10 Speaker 3
Andrew, you say, hey, this is not what?
00:24:12 Speaker 3
I do I do standards and this is a methodical way of getting to standards. We do a lot of sourcing from all the stakeholders.
00:24:20 Speaker 3
Then we aggregate that information. We vet that information with industry experts before we publish. If I say ohh, your process is just.
00:24:27 Speaker 3
Vetting with industry experts and take no you're like, no, it's a lot more elaborate on that. So doing a little bit of preparation and helps.
00:24:37 Speaker 2
Sometimes it seems like the audit meetings are going off the rails and no matter what you're doing, the audity is just or the stakeholder is just clashing with you left and right, and you can't make any traction or any progress in your audit. How can you use emotional intelligence to help get things back on track?
00:24:55 Speaker 3
Lead with empathy.
00:24:56 Speaker 3
Always.
00:24:58 Speaker 3
Put yourself in their shoes and sometimes on most of the time they're not in a good place in terms of maybe you're disrupting their day-to-day activities. Maybe you're asking more questions than you. You know, typically you would maybe they answered all the questions to someone else. So I think leading with empathy helps a lot and.
00:25:18 Speaker 3
Friction will always be there to some moment to some, but if there's anything that you can adjust on your side because that's a piece that you can control, go ahead and focus on that.
00:25:28 Speaker 2
Very nice. Well, Alex, want to thank you for taking the time to join us today and talking about emotional intelligence.
00:25:34 Speaker 3
It was fun, you know, hopefully by the end of, you know 20/25/2026 this is going to be a subject that everyone will be talking about. It's important for us not to just dial up the AI and IQ side of things, but also to make sure at least the EQ is not left behind. We want to be able to connect with each other the same way we've always connected.
00:25:54 Speaker 3
Each other to make sure least we have the right amount of impact to continue adding value in anything that we do either professionally or personally.
00:26:03 Speaker 2
Perfect. Thank you.
00:26:06 Speaker 1
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00:26:22 Speaker 1
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