Finding purpose in what we do as auditors.

As auditors, I am sure we have all, at some time or another, questioned the purpose of what we are doing. As we are sitting in the cramp, mouldy smelling “meeting room” at a client site, or four coffees deep during the midnight shift back at the office, we have probably all thought, “what are we actually doing here?!” “What is our purpose?!”.

For external auditors:

The purpose of an audit is to enhance the degree of confidence of intended users in the financial statements. This is achieved by the expression of an opinion by the auditor on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework. In the case of most general purpose frameworks, that opinion is on whether the financial statements are presented fairly, in all material respects, or give a true and fair view in accordance with the framework. An audit conducted in accordance with ISAs (UK) and relevant ethical requirements enables the auditor to form that opinion.

ISA (UK) 200 – Introduction

For internal auditors:

Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

Global Institute of Internal Auditors (IIA) – About Internal Auditing

Bored yet? Even our purpose as either external or internal auditors is boring enough to put a person to sleep, so its easy to see why so many people struggle to find meaning or purpose in what they do. Imagine what people must think of us as auditors once they have read our engagement letters or scoping documents!

I personally believe there are two parts for an auditor to have purpose in their job:

1. The personal purpose – what makes you want to turn up and do your job each day; and
2. The company purpose –what’s the company’s purpose and how do we help deliver it.

Whilst separate, I also believe there is cross over between the two. For instance, you’re not likely to work for a company where your personal purpose does not align to the company’s purpose. If you’re against smoking, are you really going to work for a tobacco company?

Here, I try to break down the importance of having a purpose and how we can factor these in our jobs from both the personal and company perspective.

The Personal Purpose

Extract from the Shell Strategy

A 2017 report by Gallup looked at data from more than 195,600 US employees identified that 33% of American employees are engaged in their work and loving their jobs (AWESOME!!!). At the other end, 16% are not enjoying work at all. That means that 51% are in the middle. They don’t love it, but they don’t hate it either… they’re just there. Thinking about yourself; where do you fall?

Generally, it would be assumed that most employees of a business have taken a role with the company because they like something about it; such as, what the company stands for. Given this, you would say you already feel like you have achieved, in part, your personal purpose, but what if you can’t ‘live it’.

Looking at this practically… Say for arguments sake, you really want to work for an energy company, but you would love to see a change regarding the environmental impact of the business and a move towards cleaner energy. Using Shell as an example, you have reviewed their strategy and can resonate with it; in particular the company’s purpose “to thrive in the energy transition by responding to society’s desire for more and cleaner, convenient and competitive energy”.

Whilst this part of the strategy excites you the most, how can you “live it” through our day to day audit?

I personally believe for a company’s strategy to become truly effective, it needs to be embodied in what everyone is doing everyday, with the results communicated to show the success of everyone’s efforts.

As auditors, more so internal auditors than external auditors, we are able to scope a part of the strategy into any terms of reference. Simple compliance reviews such as Accounts Payable or even travel compliance, we should be able to include some level of work in our scope to show how our audit is contributing to the broader company purpose or strategy. In this instance, a simple analysis of our own energy bills to determine how much we spend ourselves on renewable energy or traditional energy, can show whether or not we are practicing what we preach. Are we actually really committed to transitioning to cleaner energy if we don’t even use it ourselves as a business?

It’s simple exercises such as this where the auditor can feel as though there is some purpose to their work on a personal level. Not only are we able to see that we are contributing to the company’s strategy as opposed to turning out another standard review, we are also helping to meet our own personal agenda – something which I think is extremely important if you want to keep your audit team members engaged and committed.

The Company’s Purpose

The company’s mission and strategy can impact on an employee’s sense of purpose, particularly if they understand their role in the wider company game plan and they can see their outputs.

For me personally, I can resonate with my current company’s mission, but in day to day auditing, I struggle to see where we actively help work towards this aside from a few audits on the annual plan more focused on project management rather than their contribution to the overall strategy. Whilst I understand and appreciate that as an auditor, I need to ensure that processes are operating effectively, and provide management with assurance on whatever we are doing, but should we also be showing how what we are auditing links to a bigger picture, such as the company’s mission or strategy?
I think yes!

Continuing on from before where I mentioned that through our Terms of Reference / Scoping Documents and final reports, we should draw the relationship between what we have audited, the outcome, and how this impacts on the bigger picture. Not only does this show we are a part of the business, but it can show to business areas what impact they have on the wider business or strategy. Similarly, it can help reinforce to management the importance of a particular business area on a company’s strategy.

Through the ‘Annual Review’ presented to the audit committee or executive management, audit should also be able to show how our work has contributed to the company’s strategy and purpose. For a longer term strategy, and if applied across each audit, the internal audit team should be able to show to the audit committee or executive where we have helped, but also the benefits that have been realised. Without a doubt, the results should also be communicated back down to individual audit team members so they can see what they have achieved / contributed to.

Overall, I think it’s extremely important that auditors have a purpose and can see where this purpose is being “lived” in our day to day work.

Our assignment plan scoping templates include a section allowing you to link your review to the company’s strategy / bigger picture. You can check out our templates here.