Creating a Collaborative Audit Culture: Verbal Communication

The challenges facing Internal Audit are formidable, and we all know what they are: increasing outside regulation, higher internal expectations from Boards and Audit Committees, and demands from operational leaders to provide insight that adds value to the business. And if that isn’t enough, there’s a shortage of people who want to do internal audit.

Culture Is Everything

There’s no magic bullet that addresses and eliminates these challenges. However, there are certainly strategies and tactics that CAE’s can use to create real change and drive advances in the battle. Culture is everything, and that’s the place to start. Culture is the horizontal gravity that holds organizations together. It’s the reason people join a company, and it’s the reason they stay. Company culture is critical, but what’s often lost on those below the C-Suite is the importance of functional culture. As a CAE, you have an obligation to set a tone and create a culture that defines your function, and foster that culture within your team.

Collaborative Audit Culture

The term or phrase “collaborative audit culture” is getting some airtime in internal audit circles. Thus far, it’s more talk than action…viewed as an ideology vs. a commitment and a rallying cry. Why is that? Because it’s hard. It takes work. And it requires a mindset and leadership chops that, candidly, don’t come naturally to lot of CAE’s. There’s good news, though. It’s not as daunting as you might think for those who are willing to embrace the challenge. How do we tackle this beast of creating a Collaborate Audit Culture? As Henry Ford once said, “Nothing is particularly hard if you divide it into small jobs.”

Communication In a Collaborative Audit Culture

Few will disagree that communication is important. Effective communication involves both art and science. Internal Audit groups don’t focus nearly enough on the “art” – particularly with regard to verbal communication. There is art in the day-to-day, conversation-by-conversation interactions that occur. They are the building blocks of perception. Perception is reality for most. Intentional and artful communications foster and create a collaborative culture. Start with teaching, training and practicing small things…that actually aren’t small things in the overall scheme of things. Here are a few:

Frame the issue

There’s an old saying, “He who frames the issue, wins the argument.” I’m not suggesting that arguments are necessary; I’m suggesting that context is critical. The first step is to establish the context of common ground. Clarify and acknowledge that everyone involved wants the same thing. What is it? Everyone wants a clean audit. The audit team wants it, and the business wants it.

Seems obvious, but you’d be surprised. Unfortunately, there is often FUD on both sides. FUD = Fear, Uncertainty and Doubt. Especially at lower levels of the organization. This is a great opportunity for audit leadership and the audit team to diffuse and disarm those emotions. We’re all on the same team here. Don’t assume they know that or they believe and feel that.

When we go to the doctor or the hospital, think about how they communicate with us. They are trained to frame the issue. They tell us exactly what they are going to do before they do it. “You’re going to feel a stick…we’re going to look in the back of your throat…this is going to hurt a little.” You get the idea. Humans want to know what’s going to happen to them. At the doctor, and during an audit.

Introduce and Agree on Language

Words matter. Right or wrong, agree or disagree, words evoke reactions and emotions. Walk everyone through the language that you plan to use. Are you calling it a “finding”? A “violation”? Do you really need to refer to it as an “incident”? Something as simple as this can make a big difference in how much and what type of collaboration will take place. Ask the business how they would refer to these things. What other vocabulary can you review that will lead to better collaboration?

Follow a Communication Model

Teach your audit team to use a communication model. A communication model can create consistency and truly make your audience feel like they have been heard. At my recruiting firm, we teach and practice LACES:

• L = Listen

• A = Acknowledge

• C = Clarify

• E = Expand

• S = Seek Agreement

Try it with your audit team. Role-play with each other. You’ll be surprised at how it facilitates better communication.

Seek First To Understand

Steven Covey introduced the masses to this in 1989 as Habit #5 in his blockbuster The Seven Habits of Highly Effective People. Specifically, “Seek first to understand, then to be understood.” This gem has amazing power to properly orient interactions and relationships. Internal auditors aren’t functional business experts. Some are expected to be. That’s a massive gap. Any progress toward bridging that gap has to start with this principle. People love to talk about what they do, and to showcase how well they know what they do. Tap into that. Learn from it. Use it.

The Bottom Line

Collaboration is defined as “the action of working with someone to produce or create something.” Mastering the art of routine and transactional internal audit communication is an intangible endeavor that will create tangible progress toward a collaborative audit culture.

About the Author

Kent Burns is President of Simply Driven Executive Search, whose mission is improving the lives of both the clients and candidates they represent. A search industry veteran since 1999, Burns is a Big Four CPA with prior experience at PwC and KPMG. He also served as a Corporate Controller and Chief Financial Officer in both public and private companies. © 2016 Simply Driven Executive Search