Internal auditors must be prepared to back up audit findings with facts, but they must be delicate in the delivery of those facts.
"When you tell people they're wrong, you shut them down," said Manal Al Sarraf, CPA (inactive), CGMA, the head of internal audit at Batelco, a multinational telecommunications company based in Bahrain. "You need to keep communication open for people to explain."
A harder or softer stance can be taken depending on the nature of the audit, but, in general, the auditor who has learnt the particulars of the business, built a professional relationship, and maintained a sceptic's approach can do the job effectively without shutting anyone down.
Al Sarraf takes pride in her approach at Batelco, where she has worked for the past ten years, including six as the audit chief for the company's domestic operation. Internal audit must sometimes play the role of watchdog, she said, but it also should be a business partner. "Sometimes you have to wear a velvet glove, and other times you have to be stern," she said.
Here are five ways internal audit can build relationships without compromising independence:
Understand business leaders' perspective and their communication style. This understanding will occur naturally for the auditor who is familiar with a business unit. Learning about the department manager's pain points at work and about the manager's life outside of work can go a long way towards building a professional relationship, but one that isn't too cosy. "Some people just want an email," Al Sarraf said. "Some people want to chat over a coffee." Others might want a formal conversation.
Be a regular visitor. You won't be seen as an outsider if you're in regular contact with the business units, and you will learn more observing operations than you would looking at a spreadsheet. "Do you want people to say, "˜Who woke you up? Why are you out of your cave?' " Al Sarraf said. "You need to walk around. People need to see you."
Seek understanding, not fault. A business leader can become defensive if one of the first questions an auditor asks is, "Why did you do this?" That sounds accusatory. Instead, start with, "Tell me about some of the trouble spots related to reconciliations," and then be a strong, active listener.
Ask what you can do to help. If an audit coincides with a department's busiest time of the year, it might be possible to change the schedule. The department can collaborate better if it is not overburdened.
Understand business trends, and think holistically about the business and its risks. Al Sarraf's mantra is to be "armed with knowledge" by reading and by having discussions with professionals in other fields. "As business evolves, we must evolve and expand our horizons," she said.