Some tips in managing audit findings

Basic thing when you find a finding during your audit fieldwork, ask yourself the most important question, why the finding was incurred and what was the root cause of the inadequate control?  Is there a problem with the person who carry out the work due to oversight, simple negligent, incompetence or lack of training, supervision or  management override over the controls?

The best part is how to highlight your findings that will be accepted by management.  During the exit meeting between auditors and the auditees, there should be balance between do the right thing and do thing right.  The 'do the right thing' is that the management may tend to break the procedures because they want to ensure  the operations are smooth.  The 'do thing right' is that the management has to follow the procedures by seeking the next cause of action to ensure the continuation of the operation event they will bend the rules.

The thing that the management wants from the auditors is the value of the finding whether the finding can help them to improve the operations.  Then it comes the crucial of the audit recommendations to get the buy in from the management to concur the recommendation from the auditors.  How to make your finding acceptable by the management?  Draw a line between if the recommendation is not followed, what is the risk and impact that will drop the value of the on-going operations and if management agrees to comply with the recommendation, show the value that will increase due to improvement in efficiency in on-going operations.

Sometimes the findings highlighted by the auditors are hard to understand due to the different audiences.  Audit finding to be given to operational management who involved in the operation may understand your finding very well but what about the big bosses namely the managing director, the chief executive officer, the audit committee members. These high ranking management personnel would only interest to know what is the main issues of the audit findings.  They only want to know the significant audit findings from the whole audit finding present to operational management.  The best part is to level the understanding of the finding between operational management and the bosses is to summarize the audit findings and convert them to audit issues, what are they really want to know is the solutions to improve the control weaknesses.

What I had learnt from my present work is that how to deal with your bosses.  The most important is when they call you for any query on management issues, audit reports, clarification on financial data and information, you need to understand the key words and what are their expectations.  The best is if you can give them a solution of the query made.  They want to know the solution and they do not want to know what cause the problem.  If you are just saying that of your findings, the situation has deteriorated and this will make them unhappy and feel unpleasant with the findings.  To bring them to the satisfactory comfort zone, highlight the solution that will make them feel secure and assurance that the problem they want the auditors to highlight are being remedy by the operational management.

Last and not least is that the information that the internal auditors reported to the bosses must be accurate and reliable at all angle.  This is the basic thing that the bosses want from the auditors and they can sleep well throughout the night.