Interested in this topic? Visit the links below for more resources:
Visit The IIA’s website or YouTube channel for related topics and more.
00:00:02 The IIA
The Institute of Internal Auditors presents All Things Internal Audit.
00:00:06 The IIA
May is Internal Audit Awareness Month, and this year we wanted to celebrate the profession a little differently.
00:00:12 The IIA
Not with a list of frameworks, not with a textbook definition, and not with the idea that internal auditors walk into every room and get thanked for being there, because sometimes they don't.
00:00:26 Ashanti Clark
No one in all my years has ever rolled out the red carpet or thrown a parade when we showed up.
00:00:32 Ashanti Clark
So I just have to be honest.
00:00:33 The IIA
And yet internal auditors keep walking into those rooms, rooms where people are guarded.
00:00:38 Chad Bourque
I had to battle with it a lot because I'm one of those people that I like everybody to like me.
00:00:44 Chad Bourque
And so having to deal with the resistance can be tough.
00:00:48 The IIA
Rooms where the conversation can turn fast.
00:00:50 Jasdeep Gill
The stakeholder got up out of his chair and he stormed out of the office.
00:00:55 Jasdeep Gill
And then I was sort of a newbie in the profession.
00:00:57 Jasdeep Gill
I didn't really know what to do.
00:00:58 The IIA
Rooms where the old playbook doesn't work.
00:01:01 Nam Phong Ho
AI will not make you a better auditor, but I think emotion intelligence will make you a better auditor because you can use the whole spectrum of human connections.
00:01:10 The IIA
Rooms where the work is not just about finding what went wrong.
00:01:14 Asim Fareeduddin
That's really what auditors have is trust, right?
00:01:17 Asim Fareeduddin
That's kind of a byproduct of what we're selling.
00:01:20 The IIA
And maybe that's the real story of internal audit.
00:01:23 The IIA
Not just the findings, not just the reports, not just the controls, but the real stories from people who have to ask the hard questions, who sometimes have to walk into difficult rooms.
00:01:35 The IIA
and do their best to show their organization what they might miss.
00:01:38 Aadesh Gandhre
We need to position Intel Audit as a lighthouse and not a spotlight.
00:01:42 The IIA
You walk into a room and before anyone says much of anything, you can feel it.
00:01:47 The IIA
The crossed arms, the short answers, the polite skepticism.
00:01:51 The IIA
Ashanti Clark knows that feeling.
00:01:53 The IIA
She's now an executive advisor at FedEx Express, and she's seen almost every version of what she calls internal audit resistance.
00:02:01 Ashanti Clark
Where do I even start?
00:02:02 Ashanti Clark
I have countless stories of this very example.
00:02:07 Ashanti Clark
I think what I call IA resistance is very normal when we are engaging with customers.
00:02:14 Ashanti Clark
No one in all my years has ever rolled out the red carpet or thrown a parade when we've shown up.
00:02:19 Ashanti Clark
So I just have to be honest.
00:02:21 The IIA
But Ashanti learned something early.
00:02:23 The IIA
If people already expect you to come in with a clipboard of demands, sometimes the strongest move is to do the opposite.
00:02:30 Ashanti Clark
So the specific story I'll share was actually an audit customer that was a vendor.
00:02:36 Ashanti Clark
And the thing about third parties sometimes just are not used to
00:02:42 Ashanti Clark
the first party being in their space.
00:02:44 Ashanti Clark
So I understood that, but we still had a right to be there.
00:02:47 Ashanti Clark
Obviously, part of the agreement is that we make sure things are on the up and up.
00:02:52 Ashanti Clark
So what I decided to do in that instance, because you can feel it, you can feel the tension, you can feel the resistance.
00:02:59 Ashanti Clark
And so I just started small.
00:03:01 Ashanti Clark
Before I went in with my clipboard of demands and requesting all this documentation,
00:03:07 Ashanti Clark
I just started with a conversation.
00:03:09 Ashanti Clark
I just started really trying to learn because they already thought I didn't know anything.
00:03:14 Ashanti Clark
So hey, let's go with that.
00:03:15 Ashanti Clark
And so even though I spent hours of research hours and reading policies and reading dashboards and data, I started by.
00:03:23 Ashanti Clark
giving them an opportunity to teach me something and to share more information than I could read or research.
00:03:30 Ashanti Clark
And so I did allow them to tell me about their business.
00:03:35 Ashanti Clark
I wanted them to feel and understand that I was really there to help them.
00:03:39 Ashanti Clark
And then also I gave them a chance after they had kind of walked through their processes from their perspective to actually talk about what their challenges were with even being in business with us.
00:03:52 Ashanti Clark
And so
00:03:53 Ashanti Clark
I think that really kind of caught them off guard because I think they assumed that I would come in, with a bias.
00:04:01 Ashanti Clark
And so it really helped us, helped me to build that trust with them.
00:04:04 Ashanti Clark
So I allowed them to talk.
00:04:06 Ashanti Clark
I allowed them to share.
00:04:07 Ashanti Clark
I asked them what their pain points were in the process.
00:04:10 Ashanti Clark
And so I don't think they were expecting that.
00:04:13 Ashanti Clark
I think they thought that I probably wouldn't care.
00:04:15 Ashanti Clark
But this did allow me to show them a little empathy.
00:04:18 Ashanti Clark
You know, I was like, oh, really?
00:04:19 Ashanti Clark
So that it takes that long to do that?
00:04:21 Ashanti Clark
Wow, that's
00:04:22 Ashanti Clark
That's crazy, and really just empathizing with them.
00:04:26 Ashanti Clark
And I don't think it was something they were used to seeing.
00:04:28 Ashanti Clark
And so what it did was really just help them see me as someone who was kind of there to help them and really connect with them.
00:04:37 Ashanti Clark
So after a couple of those conversations with different management, I think they kind of relaxed a little bit.
00:04:43 Ashanti Clark
I think they understood that I was there for a reason and I'm doing my job and I was really there to help.
00:04:49 Ashanti Clark
And I don't think anyone had really even asked them their opinions before that either.
00:04:53 Ashanti Clark
So it really flipped the dynamic.
00:04:55 Ashanti Clark
The walls came down, they realized I wasn't the enemy, and they actually were able to leverage my support to get some resources that they needed to help with some of their own pain points.
00:05:06 Ashanti Clark
So even as we got to the point of developing action plans and
00:05:11 Ashanti Clark
coming up with strategy on how to resolve some of the concerns that we had.
00:05:15 Ashanti Clark
We were able to structure it in a way that they didn't get necessarily penalized, but they got recognized for their efforts.
00:05:22 Ashanti Clark
but we were able to shed some light on some of their challenges to help them.
00:05:25 Ashanti Clark
So they actually ended up thanking me, thanking us for being there.
00:05:28 Ashanti Clark
We got invited out to drinks, all the things.
00:05:31 Ashanti Clark
So it was definitely a turn from how it began.
00:05:34 The IIA
Internal audit is technical, but it's also deeply human.
00:05:38 The IIA
Chad Burke understands that part of the job better now than he did at the beginning.
00:05:42 The IIA
He's the global director of enterprise risk management at Gallagher Benefits Services.
00:05:47 The IIA
But when he talks about resistance, he doesn't make himself sound fearless.
00:05:51 The IIA
He says the honest thing.
00:05:52 Chad Bourque
Ultimately just like starting off going into the conversation knowing they're going to be resistant, I think is part of that too.
00:05:58 Chad Bourque
We have to be prepared for that at all times.
00:06:01 Chad Bourque
And I didn't, that was something I learned over the career.
00:06:05 Chad Bourque
I wasn't like a, you know, that day one.
00:06:08 Chad Bourque
And I had to battle with it a lot because I'm one of those people that I like everybody to like me.
00:06:13 Chad Bourque
And so having to deal with the resistance can be tough.
00:06:17 The IIA
That's the part people don't always say out loud.
00:06:20 The IIA
It can be hard to be in a profession where your job is to challenge, question, and sometimes tell people something they don't want to hear.
00:06:26 The IIA
So the question becomes, how do you make the room feel less defensive before the finding ever arrives?
00:06:33 The IIA
Adesh Kandre is the chief audit executive at DTCC.
00:06:37 The IIA
He says
00:06:38 The IIA
starts by changing the shape of the conversation.
00:06:40 Aadesh Gandhre
I think it starts with having the two-way communication.
00:06:44 Aadesh Gandhre
So what I've seen some people do is, let's say you go to a continuous monitoring meeting, it's your relationship meeting with the auditees.
00:06:52 Aadesh Gandhre
They keep the whole focus in the meeting, asking questions, asking questions.
00:06:58 Aadesh Gandhre
And then that almost has this feeling as an auditee that I'm being interrogated.
00:07:04 Aadesh Gandhre
So, but if you open that communication channel and give them something in that meeting where, hey, you know what, I saw this in the other group that you might benefit from, go ahead and talk to this person XY and Z because we in internal audit have that amazing position in the firm to have that bird's eye view and connect the dots.
00:07:25 Aadesh Gandhre
So give them something in these meetings so that they look forward to it and it doesn't feel like
00:07:30 Aadesh Gandhre
like an interrogation.
00:07:32 Aadesh Gandhre
And that's how you kind of move from that policing to the partnering, kind of remove the resistance.
00:07:38 Aadesh Gandhre
And it takes some practice to do it.
00:07:41 Aadesh Gandhre
I know for some it may not come naturally, but if you start showing that auditing is not just, you know, we asking question or it's, you know, the hindsight, you know, we gonna look at data from the last one year.
00:07:54 Aadesh Gandhre
What is that foresight that you can provide that's really going to help you move away from that perception?
00:08:01 Aadesh Gandhre
Because perception can still soon become reality.
00:08:05 The IIA
Nam Pho Ho, former chief audit executive at Glencore, would say that is exactly why emotional intelligence matters.
00:08:12 The IIA
And his view of the profession is simple.
00:08:14 The IIA
Internal audit is a people business.
00:08:16 Nam Phong Ho
The power distance in South America is quite high.
00:08:20 Nam Phong Ho
So the authority is centralized and the authority is not challenged.
00:08:25 Nam Phong Ho
And this also means that when you come from the headquarters as an internal audit, you are really perceived as the police role.
00:08:33 Nam Phong Ho
and people are a little bit afraid of you.
00:08:37 Nam Phong Ho
So to navigate this, we had a big audit in South America.
00:08:41 Nam Phong Ho
I went there and I personally met the CEO of that operation, along with my audit manager, to have an open discussion about the scope and any concerns regarding the risks associated with scope.
00:08:55 Nam Phong Ho
So I was surprised.
00:08:57 Nam Phong Ho
The CEO was quite talkative and surprisingly, he also revealed some important areas we should look for.
00:09:03 Nam Phong Ho
So later doing the audit, we addressed the errors he pointed out.
00:09:08 Nam Phong Ho
And we had to expand and pivot a bit to scope to address his concerns.
00:09:12 Nam Phong Ho
Then in the ex-meeting, he was there as well.
00:09:15 Nam Phong Ho
We discussed his concerns.
00:09:16 Nam Phong Ho
We reviewed the findings and shared our opinion, how to rectify the issues.
00:09:21 Nam Phong Ho
So later, my team told me, Nam, normally the CEO wouldn't attend the ex-meeting.
00:09:26 Nam Phong Ho
He would delegate it to the CFO.
00:09:28 Nam Phong Ho
And normally, the meeting lasts 3 hours.
00:09:30 Nam Phong Ho
It's a lot of discussion.
00:09:32 Nam Phong Ho
because of the cultural effect in this region, they like to discuss.
00:09:36 Nam Phong Ho
But this time it was like one hour and the CEO himself was there.
00:09:42 Nam Phong Ho
So I think because we could connect with him early and align our scope and address his concern, he was interested to participate and he was pleased with the result.
00:09:53 The IIA
But even when you try to do it right, the conversation can still break because audit findings do not land in a vacuum.
00:10:00 The IIA
They land on people.
00:10:01 The IIA
People with pressure, pride, deadlines, and sometimes problems you can't see from across the conference room table.
00:10:09 The IIA
Ashanti learned that early in her career during a closeout meeting that didn't go the way she expected.
00:10:14 Ashanti Clark
Yeah, this is always, it's never fun to deliver negative audit findings.
00:10:19 Ashanti Clark
I'm even hesitant to share this, but I definitely, I'm gonna share it with Tag to change the names and everything because it did become sort of the thing I was known for some time in my career because it did
00:10:31 Ashanti Clark
happened early on in my career, but some of my colleagues will never let me forget it.
00:10:36 Ashanti Clark
But anyway, because it did not land well, just spoiler alert.
00:10:40 Ashanti Clark
But so we started an audit as normal as we've always done.
00:10:45 Ashanti Clark
We review all the policies, review all the information we can, even before talking to the auditee.
00:10:49 Ashanti Clark
And then
00:10:50 Ashanti Clark
Once we get there, we do the walkthroughs and allow them to kind of give us their perspective of the process.
00:10:56 Ashanti Clark
And so in this particular case, after they had been done, I had specifically discovered that a part of the process that they had presented was not being completed.
00:11:06 Ashanti Clark
There was no documentation to support it, and based on what I was seeing, it was going to be an exception.
00:11:12 Ashanti Clark
And so this probably was also one of those situations where the audit was not fond of us being there.
00:11:19 Ashanti Clark
This was early in my career.
00:11:20 Ashanti Clark
So I was young, coming into our area.
00:11:23 Ashanti Clark
She felt like I was just there to make trouble.
00:11:25 Ashanti Clark
So throughout the course of the audit, she had been very matter of fact, very short.
00:11:31 Ashanti Clark
So I kind of didn't feel good about it at this point because I didn't feel like it was going to help the situation at all.
00:11:37 Ashanti Clark
So
00:11:38 Ashanti Clark
Anyway, we get to the closeout meeting and I'm presenting these exceptions.
00:11:42 Ashanti Clark
And I'll be honest, they weren't egregious.
00:11:45 Ashanti Clark
it wasn't anything that I felt like was going to fail the audit or anything.
00:11:50 Ashanti Clark
But nonetheless, it was an exception, right?
00:11:52 Ashanti Clark
So I, thinking I was doing the right thing, was approaching the conversation pretty much with the same energy that she had given us the whole audit.
00:11:59 Ashanti Clark
She had been very matter of fact, so I was very matter of fact.
00:12:01 Ashanti Clark
She had been very straightforward with us, very straight, short to the point.
00:12:05 Ashanti Clark
So that's how I presented the information.
00:12:07 Ashanti Clark
These are exceptions.
00:12:08 Ashanti Clark
This is what we found.
00:12:09 Ashanti Clark
It wasn't being done.
00:12:10 Ashanti Clark
Let's talk about it.
00:12:11 Ashanti Clark
And so the next steps was we had to develop an action plan to address those exceptions.
00:12:17 Ashanti Clark
So as I started asking her, so do you have any thoughts on what may have caused these exceptions and how you think we could address them, so we can develop some sort of corrective action?
00:12:29 Ashanti Clark
this woman begins to cry.
00:12:33 Ashanti Clark
She is sitting there, we are all there in the room, my management team, her management team, around the conference room table, and she starts to cry like that.
00:12:42 Ashanti Clark
And it wasn't like a sobbing cry, like a verb, like you could hear a crying, but you could visibly see the tears falling from her eyes.
00:12:51 Ashanti Clark
And she was trying to, talk through them.
00:12:53 Ashanti Clark
And so I had to work through, because I'm not sure, I'm like, I don't know what to do.
00:12:57 Ashanti Clark
Do I hug her?
00:12:58 Ashanti Clark
Do I get her tissue?
00:12:59 Ashanti Clark
Like we're in an audit.
00:13:00 Ashanti Clark
So up until this point, she hadn't necessarily shown any emotion other than very, just very dry and very straight to the point.
00:13:08 Ashanti Clark
So it was very, I was very taken aback.
00:13:10 Ashanti Clark
And of course it was early in my career.
00:13:12 Ashanti Clark
I think her management ended up just kind of taking over the conversation and continuing to talk to me to work through the action plan.
00:13:20 Ashanti Clark
And so I think I left.
00:13:21 Ashanti Clark
So of course, the saying goes, I made the woman cry, which that is not the case.
00:13:25 Ashanti Clark
So that's what they, my colleagues teased me about for years.
00:13:28 Ashanti Clark
But what I took away from that, I don't know what created the dynamic to make her emotional.
00:13:33 Ashanti Clark
But I just learned that, you know, you just never know what people are going through.
00:13:37 Ashanti Clark
And I, you know, it could have been mindful even in the beginning, understanding why she was so being so short and dry, could have been something personal.
00:13:45 Ashanti Clark
Who knows?
00:13:46 Ashanti Clark
Maybe she wished she could have been nicer at that point.
00:13:48 Ashanti Clark
I'm not sure, but that was one of the one times that really sticks out to me because that was probably the biggest reaction I've ever gotten from delivering difficult negative audio findings.
00:14:01 The IIA
Do you think you would have handled it differently now or are you happy with how you handled it originally?
00:14:07 The IIA
'Cause that's, I mean, I don't even know what you would do in that kind of setting.
00:14:12 Ashanti Clark
I definitely think I probably would have gotten up and went around the table and hugged her or something now.
00:14:17 The IIA
A finding may be accurate.
00:14:19 The IIA
The documentation might be missing.
00:14:21 The IIA
The exception may be real.
00:14:23 The IIA
But that moment reminded Ashanti that being right isn't the same thing as being heard.
00:14:28 The IIA
Chad's version happened in Mongolia at a mine site.
00:14:31 Chad Bourque
Typically in an ideal world, you're constantly keeping your stakeholders involved in the process and they know everything that's going on and you're asking questions back and forth.
00:14:42 Chad Bourque
forth and you're really engaged.
00:14:44 Chad Bourque
But there was a particular instance when it was one of these overseas trips.
00:14:49 Chad Bourque
I was in Mongolia and we were working at a mine site.
00:14:53 Chad Bourque
And so the leader of the department we were auditing, we were auditing kind of a procurement function.
00:14:59 Chad Bourque
The leader was somewhere else in the region.
00:15:02 Chad Bourque
And so he wasn't involved really at all in the process.
00:15:08 Chad Bourque
And I was like a
00:15:11 Chad Bourque
fairly junior, new manager at the time.
00:15:14 Chad Bourque
And we did everything right.
00:15:15 Chad Bourque
We did the project, the stakeholder was there, like the process owner was there through the whole thing.
00:15:22 Chad Bourque
We talked about the finding, he knew what was there and we followed the process by the book.
00:15:27 Chad Bourque
But the process has us sending our summary of findings to a lot of stakeholders, including CFOs and things like that.
00:15:35 Chad Bourque
And when we did that, there were some
00:15:38 Chad Bourque
findings that were not very pretty and they were negative on his team.
00:15:42 Chad Bourque
And he went off pretty hard.
00:15:45 Chad Bourque
I had never had anyone curse at me in an internal audit situation.
00:15:50 Chad Bourque
But yeah, on our findings like call towards the end of the project, there were words spoken.
00:15:58 Chad Bourque
Luckily, I had a great director at the time who kind of just put the pause on it and said, look, we're going to step away, give you some time to cool off, send us
00:16:07 Chad Bourque
the evidence of what you disagree with.
00:16:11 Chad Bourque
And we actually went back, I had to go back to Mongolia to do more testing and more work.
00:16:17 Chad Bourque
And we ended up with the same conclusions.
00:16:19 Chad Bourque
But it was a difficult situation for me because I'd never had anything like that happen to me before.
00:16:27 Chad Bourque
But yeah, that is another example of like how important it is to have a strong leader and
00:16:36 Chad Bourque
be a strong leader for your team members.
00:16:38 The IIA
Jez Gil had another.
00:16:40 The IIA
She's now a senior manager of internal audit and assurance at Relics.
00:16:44 The IIA
But early in her career, she walked into a closing meeting with a significant finding.
00:16:49 Jasdeep Gill
We were in Sweden and we were about to enter an internal audit closing meeting.
00:16:54 Jasdeep Gill
And I found a significant finding, sort of a red
00:16:57 Jasdeep Gill
finding.
00:16:58 Jasdeep Gill
And essentially, if that had been accepted by the stakeholder, it could possibly have resulted in a big reorganization, which obviously the stakeholders didn't want.
00:17:07 Jasdeep Gill
But when I turned up to that meeting, it couldn't have gone any worse.
00:17:10 Jasdeep Gill
The stakeholder got up out of his chair and he stormed out of the office.
00:17:16 Jasdeep Gill
And then I was sort of a newbie in the profession.
00:17:18 Jasdeep Gill
I didn't really know what to do.
00:17:19 Jasdeep Gill
I was there on my own.
00:17:21 Jasdeep Gill
I sort of got up and I looked around the office for him and he was nowhere to be seen.
00:17:25 Jasdeep Gill
So I just thought, okay, sort of borderline panicked, not really sure what to do.
00:17:29 Jasdeep Gill
So I went back to the hotel and then that evening I put together a strategy in terms of, okay, what am I going to do to fix this problem?
00:17:37 Jasdeep Gill
And what if I never see him again and don't get to communicate my findings?
00:17:41 Jasdeep Gill
So the next morning I put in another meeting request with him and I just basically, I mean, it's honestly the bit about communication, I put myself in his shoes.
00:17:49 Jasdeep Gill
I wanted him to see who the person was behind the e-mail address.
00:17:54 Jasdeep Gill
I'm not just an auditor, I'm not a robot.
00:17:56 Jasdeep Gill
I have a personality behind my e-mail address, behind my name.
00:17:59 Jasdeep Gill
Who am I and why do I care?
00:18:02 Jasdeep Gill
And for him, I really needed to communicate that to him.
00:18:05 Jasdeep Gill
What is the so what?
00:18:07 Jasdeep Gill
So what I'm saying to you as a recommendation, why does it matter to him?
00:18:11 Jasdeep Gill
And I think in my opinion, this is where a lot of internal auditors get it wrong.
00:18:15 Jasdeep Gill
They fail to communicate the so what.
00:18:18 Jasdeep Gill
And then as a result of that, he was a completely different man.
00:18:23 Jasdeep Gill
And then I flew back to London.
00:18:25 Jasdeep Gill
And then he actually sent a e-mail to my then line manager.
00:18:30 Jasdeep Gill
And he basically said, Jazz is a keeper.
00:18:32 Jasdeep Gill
I think she's a brilliant auditor, which was real kudos because it was my first internal audit role.
00:18:38 Jasdeep Gill
And the fact he went out of his way to provide that unsolicited feedback was just a little bit of a kind of positive feedback to me in terms of, yeah, I did the right thing and I handled that difficult stakeholder.
00:18:49 Jasdeep Gill
in a really good way.
00:18:51 Jasdeep Gill
And it really set me up for success in dealing with difficult stakeholders moving forward.
00:18:56 The IIA
That was her first role.
00:18:58 The IIA
15 years later, she still uses the same approach.
00:19:01 Jasdeep Gill
I have quite a lot of examples over the last 15 years when I've had to deliver difficult audit messages.
00:19:06 Jasdeep Gill
But again, my strategy has always been the same.
00:19:09 Jasdeep Gill
It's understanding, putting yourself in the stakeholder shoes, understanding the ramifications on their end,
00:19:16 Jasdeep Gill
of receiving those audit findings and then thinking, okay, what can I do to soften that impact in terms of, okay, this is why it matters.
00:19:26 Jasdeep Gill
This is why it makes your job easier moving forward.
00:19:29 Jasdeep Gill
This is how your risks will be remediated moving forward.
00:19:32 Jasdeep Gill
If an auditor is able to explain it in that way, it really resonates with stakeholders because they understand why it matters to them
00:19:40 Jasdeep Gill
and not why it just matters to the auditor.
00:19:42 The IIA
In other words, the finding is only half the work.
00:19:46 The IIA
The other half is helping someone understand why it matters to them.
00:19:49 The IIA
So what do you do when the human side of this work shows up?
00:19:53 The IIA
Adesh has a name for one of the traps auditors fall into when the work gets tense.
00:19:57 Aadesh Gandhre
It's A phenomenon called falling in love with your finding.
00:20:00 Aadesh Gandhre
I've seen it with some of the auditors who get so hung up with this is what I found and then they're going to ignore everything around it.
00:20:09 Aadesh Gandhre
And when you go with that attitude, of course you're going to hit the wall with your auditees.
00:20:14 Aadesh Gandhre
So we also need to figure out
00:20:16 Aadesh Gandhre
How are our auditors carrying that message forward and are we listening?
00:20:21 Aadesh Gandhre
I think listening is a key skill when you feel like you've hit a wall with your stakeholder.
00:20:27 Aadesh Gandhre
It may not be just your auditee.
00:20:30 Aadesh Gandhre
It could be, let's say, somebody on the board.
00:20:32 Aadesh Gandhre
It could be somebody on the regulatory side.
00:20:34 Aadesh Gandhre
I think you have to just take a step back and figure out why this may be happening and then listen more.
00:20:41 Aadesh Gandhre
That active listening
00:20:43 Aadesh Gandhre
is a key skill in here.
00:20:45 The IIA
Assim Fridadin thinks that work starts before the meeting even begins.
00:20:49 The IIA
He now heads internal audit and assurance at Relics.
00:20:52 The IIA
And when he meets a stakeholder for the first time, he does a little homework.
00:20:56 Asim Fareeduddin
I'll give you my secret sauce here.
00:20:58 Asim Fareeduddin
So I think if I'm meeting somebody for the first time, you know, as a stakeholder, you know, immediately I'll go on to LinkedIn and, you know, see what their background is.
00:21:09 Asim Fareeduddin
And when we had that first meeting,
00:21:11 Asim Fareeduddin
I try to see something that we may have in common, whether it's an experience or maybe we have a connection in common that's at a different company.
00:21:19 Asim Fareeduddin
But I try, or maybe they're in Lake Mary, Florida, and I'm from Florida.
00:21:24 Asim Fareeduddin
So we build a common ground on that, right?
00:21:27 Asim Fareeduddin
So I think finding something in common helps to break barriers and build that relationship because
00:21:35 Asim Fareeduddin
there is skepticism, where maybe an auditor may have been seen as the police or maybe auditors are seen as being robots, right?
00:21:45 Asim Fareeduddin
So I think if you can build that relationship, you build that trust.
00:21:48 Asim Fareeduddin
And I think that's really helpful in, you know, meeting your objectives.
00:21:53 Asim Fareeduddin
So the second, maybe more specific example around, you know, work product.
00:21:59 Asim Fareeduddin
I think if a
00:22:00 Asim Fareeduddin
business is having an issue and we're proposing a solution and coming in as a solution provider.
00:22:09 Asim Fareeduddin
Maybe it's a new implementation or maybe there's a compliance obligation somewhere where we as auditors can be viewed as an expert in risk and control.
00:22:21 Asim Fareeduddin
will help show the value as an advisor.
00:22:23 Asim Fareeduddin
We understand maybe that regulation, I think going back many years to SOX, the first year of SOX, internal audit was seen as the expert because it was a new regulation and we were the expert in controls.
00:22:39 Asim Fareeduddin
I think you can extrapolate that to GDPR or any other privacy or financial or security
00:22:47 Asim Fareeduddin
regulation out there, right?
00:22:49 Asim Fareeduddin
We're helping the business navigate this regulation.
00:22:53 The IIA
That is the invisible craft of internal audit.
00:22:56 The IIA
Not just knowing the risk, not just knowing the control, but knowing how to create enough trust for the conversation to happen.
00:23:03 The IIA
And sometimes trust comes from showing up as exactly who you are, even when that feels like the wrong move.
00:23:09 Asim Fareeduddin
I'm a huge car guy.
00:23:12 Asim Fareeduddin
I had a lower BMW with a loud exhaust and I had to pick up, our audit committee chair is like a 60 something year old woman.
00:23:20 Asim Fareeduddin
And I told my wife, I said, okay, I'm gonna have to take your car because I can't pick her up in this car.
00:23:26 Asim Fareeduddin
And so one thing led to another and my wife really needed her car for some reason.
00:23:30 Asim Fareeduddin
So I said, you know what?
00:23:31 Asim Fareeduddin
I literally had to drive her from the hotel, like across this strip mall.
00:23:35 Asim Fareeduddin
It was like half a mile.
00:23:36 Asim Fareeduddin
So
00:23:37 Asim Fareeduddin
I pull up and then she gets out.
00:23:39 Asim Fareeduddin
She's like, my God.
00:23:41 Asim Fareeduddin
She's like, I saw your BMW.
00:23:43 Asim Fareeduddin
She's like, it's such a beautiful color.
00:23:45 Asim Fareeduddin
And then she got in the car and then we started talking about like, she's had like, you know, 20 BMWs and she loves cars.
00:23:53 Asim Fareeduddin
And she had like a manual transmission.
00:23:56 Asim Fareeduddin
And she was like, so upset that like she had a knee surgery.
00:24:00 Asim Fareeduddin
So literally I went to dinner and for probably an hour and 40 minutes, we talked about cars.
00:24:05 Asim Fareeduddin
And now I like text her pictures of cars
00:24:07 Asim Fareeduddin
So obviously it has nothing to do with work, but we built that relationship.
00:24:12 The IIA
He texts her pictures of the cars now.
00:24:14 The IIA
That may sound small, but it's not.
00:24:16 The IIA
That's a real relationship.
00:24:18 The IIA
And real relationships change the way hard conversations happen.
00:24:21 The IIA
Internal audit is often associated with what it finds wrong.
00:24:24 The IIA
But at its best, it also helps organizations see what is possible.
00:24:29 The IIA
Nam saw that during one of the hardest moments of his career.
00:24:32 Nam Phong Ho
So back in 2016,
00:24:35 Nam Phong Ho
the mining industry where my company was experienced a rapid drop in commodity prices.
00:24:42 Nam Phong Ho
Due to a market oversupply, all the major companies were producing too much commodities in the past.
00:24:48 Nam Phong Ho
And now the demand is not there.
00:24:50 Nam Phong Ho
So the prices are dropping.
00:24:52 Nam Phong Ho
So of course, sales, profits and share price took a huge hit.
00:24:56 Nam Phong Ho
So this kind of storm is something every organization
00:24:59 Nam Phong Ho
will encounter one or the other day, right?
00:25:01 Nam Phong Ho
Because the world is changing.
00:25:02 Nam Phong Ho
So during such time, you have to understand that senior management tends to focus heavily on reviewing costs and cutting costs.
00:25:11 Nam Phong Ho
And the fastest way to do it is by looking at how can you use headcounts, because that's a major contributor to costs.
00:25:19 Nam Phong Ho
So I remember one day being called into the office by the CEO, by the group CEO, to discuss, he wants to discuss about headcounts and if we can reduce it.
00:25:27 Nam Phong Ho
So that's not a very comfortable situation you want to be, right?
00:25:31 Nam Phong Ho
But I think I prepared my whole life for this situation.
00:25:34 Nam Phong Ho
And the preparation, it's called resilience, right?
00:25:37 Nam Phong Ho
I knew one day it's going to come.
00:25:39 Nam Phong Ho
I knew one day we're going to have a discussion like this.
00:25:42 Nam Phong Ho
So during the conversation, I was gambling a little bit and I was playing a high stake.
00:25:48 Nam Phong Ho
I was able to share to him, don't look at internal as a cost.
00:25:52 Nam Phong Ho
factor.
00:25:53 Nam Phong Ho
Look at internal audit, something we can support you, reviewing the identification of cost savings.
00:25:59 Nam Phong Ho
And I convinced him that our department can at least save 80 million US dollar.
00:26:05 Nam Phong Ho
So how do they come with this figure?
00:26:07 Nam Phong Ho
I said, look, I have 40 members at that time and everyone will help saving 2 million through cost reviews and of course with the recommendations we're going to make.
00:26:17 Nam Phong Ho
So at least he was not happy, but at least he wasn't objecting.
00:26:21 Nam Phong Ho
He said, yeah, I mean, let's have a try.
00:26:24 Nam Phong Ho
And of course he wants to see the proof.
00:26:26 Nam Phong Ho
One year later, we helped the company reducing working capital by 400 million.
00:26:33 Nam Phong Ho
So the starting point was 2.2 billion we have in terms of spare parts and we could reduce it to 400 million.
00:26:42 Nam Phong Ho
The potential was even 600 million, but the remaining 2 million, they didn't, management didn't implement these cost reduction initiatives.
00:26:48 Nam Phong Ho
But with our recommendations, we reduce the company inventory by its spare parts.
00:26:54 Nam Phong Ho
It's spare parts by consumables as well by 400 million.
00:26:59 Nam Phong Ho
And you can even verify it.
00:27:02 Nam Phong Ho
If you look at the annual report for 2017 and compare 2016, you can see how it dropped from 2.2 to 1.8 billion.
00:27:11 Nam Phong Ho
So this achievement, of course, didn't go unnoticed in the company.
00:27:14 Nam Phong Ho
So in fact, after the business is starting to look at the different eyes, they say, hey, they are not just the checklister and compliance folks.
00:27:23 Nam Phong Ho
They can actively addressing major business issues.
00:27:30 Nam Phong Ho
So we are not just ticking the box anymore.
00:27:33 Nam Phong Ho
Instead, we are seen as valuable contributors to a business priority.
00:27:37 Nam Phong Ho
So this shift transformed us really from being
00:27:41 Nam Phong Ho
I say the hunted for savings to the hunters uncovering new opportunities for cost efficiency.
00:27:48 The IIA
And maybe that is the biggest point of Internal Audit Awareness Month.
00:27:51 The IIA
Success in this profession doesn't always look like applause.
00:27:55 The IIA
Sometimes it looks like raising your hand before you feel ready.
00:27:58 Aadesh Gandhre
I was courageous enough to take on a project which was not even my responsibility.
00:28:04 Aadesh Gandhre
but it was really about coming up with a new audit universe management and risk assessment engine for the whole audit department.
00:28:14 Aadesh Gandhre
This is when I was in Goldman Sachs.
00:28:16 Aadesh Gandhre
I was a business liaison and my role was to be the translator of business requirements from audit to our technology department.
00:28:24 Aadesh Gandhre
And there was a need to revamp our risk assessment engine
00:28:28 Aadesh Gandhre
And for some reason, our technology team did not have the appropriate resources to do this in the time that we needed that in.
00:28:38 Aadesh Gandhre
And I raised my hand.
00:28:39 Aadesh Gandhre
I was missing coding at the time anyway, with my background as computer scientist.
00:28:44 Aadesh Gandhre
So I said, I'm going to give it a shot and see what happens.
00:28:49 Aadesh Gandhre
And I kid you not, there was a weekend where I may have slept 4 hours, but I was just working.
00:28:56 Aadesh Gandhre
from the design to the implementation and not just create a POC, but then that ended up being the production application that we used and we named it AURA, which is Audit University and Risk Assessment.
00:29:09 Aadesh Gandhre
So pretty much when I left Goldman, I left my AURA behind.
00:29:13 Aadesh Gandhre
And this is one of those things that not only gave me the confidence I needed, because early on I used to be a very shy person with my cultural upbringing and do not interrupt anybody, blah, blah, blah.
00:29:25 Aadesh Gandhre
But because of the courage I've shown then and the response that I got from the management after the successful implementation, after that, I feel my career just took off.
00:29:36 Aadesh Gandhre
And that's an example that I'm extremely proud of.
00:29:39 Aadesh Gandhre
And I have shared that story with some of the junior team members that be courageous.
00:29:44 Aadesh Gandhre
Even if you feel that you may not be able to do it, raise your hand, give it a shot, and maybe see the magic happen.
00:29:51 The IIA
For Adish, success started with courage.
00:29:54 The IIA
For Ashanti, it looks more like commitment.
00:29:57 Ashanti Clark
So I'll just say my professional success story and having been with this company for almost 20 years, have we hit bumps in our relationship?
00:30:07 Ashanti Clark
Yes.
00:30:08 Ashanti Clark
Have I always agreed with everything they've done?
00:30:10 Ashanti Clark
No.
00:30:12 Ashanti Clark
Have we both experienced change over the almost 20 years?
00:30:15 Ashanti Clark
Absolutely.
00:30:16 Ashanti Clark
I have way more kids than I had when I started.
00:30:19 Ashanti Clark
They make way more money in revenue than they did when I started.
00:30:23 Ashanti Clark
But here we are.
00:30:25 Ashanti Clark
And I think the message is because through all of the change,
00:30:29 Ashanti Clark
which in internal audit, our umbrella, there's so much more under our umbrella now 20 years later than there was when I started technology.
00:30:38 Ashanti Clark
I don't even have to mention those two words of artificial intelligence and how technology has changed, which impacts the change in our risk landscape and our risk environment.
00:30:48 Ashanti Clark
And even the workforce is changing.
00:30:50 Ashanti Clark
Like working from home was not something that we were doing 20 years ago.
00:30:55 Ashanti Clark
But one thing has remained the same.
00:30:58 Ashanti Clark
We value each other.
00:31:00 Ashanti Clark
My company values me and I value them.
00:31:03 Ashanti Clark
So being with the same company for 20 years, I think is a success story and especially for my generation.
00:31:09 Ashanti Clark
And people who know me know that I'm very strategic.
00:31:12 Ashanti Clark
I am a forward thinker.
00:31:13 Ashanti Clark
So to know that I've stayed committed to this organization for this long must mean that there has been value here and that they have been reciprocal in this relationship.
00:31:24 Ashanti Clark
And because they see my value,
00:31:27 Ashanti Clark
I continue to work diligently to ensure the company maintains the trust of its customers and its community and its employees as well.
00:31:34 Ashanti Clark
So what I would hope that story says to internal auditors is that this is not just a job, but it really is a mission to provide confidence to our organizations that we have a mutually invested interest in their success.
00:31:52 The IIA
That mission is what keeps the work from becoming just another audit report.
00:31:56 The IIA
It asks a harder question.
00:31:58 The IIA
Did this work add value?
00:32:00 The IIA
For Chad, that's the question auditors should ask for every project.
00:32:05 Chad Bourque
So when you think about that, what I would say is every audit you do or every project you do, reflect afterwards and say, what value did I have?
00:32:15 Chad Bourque
And if you can answer it, fantastic.
00:32:18 Chad Bourque
Save it for the next conversation you have with a leader.
00:32:22 Chad Bourque
If you can't answer it, then get your root cause, your five why analysis out and talk about why didn't we add value this time?
00:32:33 Chad Bourque
Because you can learn from that and add value the next time.
00:32:36 Chad Bourque
We should always be thinking about how we are adding value to our organization.
00:32:40 Chad Bourque
And if we follow that purpose, we're gold.
00:32:44 Chad Bourque
Everybody will be successful if they
00:32:46 Chad Bourque
strive towards that focus or that purpose.
00:32:48 The IIA
But for that value to change the way people see internal audit, it must be visible.
00:32:53 Jasdeep Gill
So one of the things that I've learned actually very recently in my professional career is no matter how good you are as an internal auditor, you can shout about your successes, you can deliver amazing audits.
00:33:05 Jasdeep Gill
If it's not visible,
00:33:07 Jasdeep Gill
you're probably not going to get the recognition and the kudos you need.
00:33:10 Jasdeep Gill
And what I've seen over the last 15 to 20 years is internal auditors, they're generally not very good about talking about their successes.
00:33:18 Jasdeep Gill
And this is particular to women as well.
00:33:20 Jasdeep Gill
I've seen it slightly skewed that way.
00:33:22 Jasdeep Gill
So I would say to any auditors listening and to any females out there, please do share your successes more and more because we do awesome work.
00:33:31 The IIA
If you like this podcast, please subscribe and rate us.
00:33:34 The IIA
You can subscribe wherever you get your podcasts.
00:33:36 The IIA
You can also catch other episodes on YouTube or at the iia.org.
00:33:41 The IIA
That's T-H-E-I-I-A.org.
