I am hungry and desperately need some food. I am contemplating whether to prepare a plain dosa, have a nice paneer paratha, cook a continental breakfast, call for home delivered pizzas or go out and eat. Loads of options. Let me decide while I read these questions on auditing on LinkedIn. Lots of questions are popping up regarding audit planning, audit programs, project execution, etc. Food and audit got linked somehow (blame it on the gender :)) so food has to wait while I write this article.
There are some common practices which auditors follow while executing an audit assignment. Some practices effectively derail the project and quality of the deliverables is yuck. So here goes, my opinion on how to conduct a delectable audit.
When cooking we pick up a recipe, get the ingredients in the quantity mentioned and follow the instructions.
When we want to start a new audit, we look for a Standard Audit Program. There is nothing like a Standard Audit Program and the same practice of cooking can’t be applied to auditing. An organization has specific strategy, mission, vision, culture, products, services, processes, technology and people. An audit program should be prepared after understanding all the components which make the organization unique. One can use prior knowledge and experience to prepare a custom made audit program specific to the business.
Prepare an audit program after understanding the business of the client properly.
2. Audit supervision
Have you observed the cooking in a major hotel? The main chef is present and directs all the junior chefs. He/she is constantly supervising and tasting the dishes. He/she is responsible for ensuring proper quality and taste of the dishes. Isn’t it remarkable that the food on every guest’s table is presented in the same manner and tastes exactly the same?
For audit supervision we need to follow the same process. Auditor supervisors and managers have a habit of putting their best foot forward at the beginning of the assignment. They are present for planning the assignment, holding the kick off meeting with the client personnel and organizing the resources. Nearing the end of the audit, the supervisors are present all the time to review work, hold discussions with staff and client, finalize the report.
However, their presence is sorely missed in between the project period. Sometimes, the client starts wondering whether the audit is being supervised at all, or is it just the juniors are working on the job. Since the audit supervisor failed to visit the client in between he/she is unaware of the observations and problems. A last minute fire fighting is done to wrap up the audit.
Audits need to be supervised for the duration of the project. Ensure audit supervisors time is allocated for periodic reviews and client discussions.
3. Audit staff
Ever had a situation when you organized a dinner at home for 10 people, and a considerate spouse or family member invited another 10 without informing you. You were enlightened regarding this nice gesture at 6 pm when you had finished cooking the dinner. The party generally gets ruined because last minute efforts are made to organize food and drinks, and everybody feels a little bit embarrassed and uncomfortable.
When an audit project is getting delayed adding staff at the last minute to maintain the deadline is not a good idea. The new staff needs time to understand the client’s business, work in progress and what they need to do to complete the project. The client staff gets hassled with the increased number of people asking basic questions near the end of the assignment. The message which goes out to the client is that these guys don’t know what they are doing and wasting our time.
Think twice about adding new staff at the last stages of the project. It might not be the right solution to meet the deadline.
4. Audit work-papers
As a sixteen year old when I was new to cooking I decided to figure out a shortcut to cooking vegetables. I figured that my elders were creating unnecessary hue and cry about following the recipe. I thought, let me put the vegetables to cook, and once they are tender I can add salt and all the other spices. Idea was that I don’t have to be in the kitchen at all. Needless to say, it was a disaster, rather inedible. Mind you, I did try self appreciation to save face but nobody took a second bite.
I won’t recommend adopting the same method for preparing audit work papers. As auditors, we have to prepare lots of work papers for our observations and as an evidence of conducting the audit. The work papers require a lot of time and energy. We think let us do it at the end of the project rather than simultaneously as we do the work.
The problem with this approach is that critical points of audit are missed since there is no written documentation available for review and understanding. Secondly, as most of the observations, discrepancies and risks are in the mind of the audit staff, some are forgotten by the time of finalization of audit. The other aspect is that if the specific audit staff falls sick or has some emergency because of which he/she can’t attend office, the rest of the team is left in the dark.
Prepare audit work papers as you do the work to avoid dishing out something inedible to the client.
5. Audit communication
Have you attended those parties where the music is so loud that one has to shout to get heard? There is no way to have a conversation unless one is directly speaking in the ear of another. I generally come out feeling; I wish I could have talked to so and so about this or that, maybe I will give a call tomorrow. These parties are basically big time mindless bliss; the things which you can do happily are dance to the music and drink yourself silly.
An auditor has to adopt very sane practices while communicating with the team and client. Communication cannot be delayed till the end of the specific step or project. It has to be constantly done to keep the team members and the client personnel on the same page. It is a two way communication here, speak and listen. Listening is crucial to the success of the project.
Lastly, adding numbers to the communication list and sending for your information messages does not help, since it creates a din and message gets lost. So decide in the beginning of the project, who will be communicated what and in what form. Define and formalize the communication channels at the beginning of the project with the stakeholders.
Audit communication is a critical art which has to be mastered. Do it properly without creating to much noise.
What do you say, are the above mentioned points food for thought? Shouldn’t we be thinking of adopting some good practices and burying some of our bad auditing habits?
Now I am really hungry, am going to have this breakfast. Slurp. You all have a nice weekend. Love, drink and eat 🙂