How to present those findings and observations whilst adding value
Presenting audit observations is not necessarily the most fun activity for either the auditor or the auditor, but nevertheless it must be done. How we present our observations tho can have a huge impact on the level of buy in from management and how they go about implementing any recommendations. It can also have a huge impact on how much the value the work of internal audit.
As part of our mission for 2020, we're going to show how #auditisvalue and how we can show value through our Findings and Actions workshops.
We have already released our Findings and Actions Workshop templates; you can access a copy of them here. It's important to remember that this is only one way of presenting our observations. This blog post will explain other, more innovative / out of the box ways to present observations.
Before we dive too far in, it's important to remember that how we present our observations must be appropriate to the business and its culture, the team being audited, and the type of audit.
When presenting findings and observations, a good starting point is the five W's:
How (technically not a W but there is a W in it, so we'll count it).
I'm going to walk you through each of the W's and show you how we can add value and push the boundaries to create the most impact and successfully encourage management to improve as a result of our audit.
Let's make sure we have the right people involved in this meeting. You don't want every man and his dog there, so let's limit it to simply those most involved in the audit and those who are sponsoring the audit. From the audit side, those directly involved in the audit and management (to the level necessary) should be more than enough. Never ever should there be more auditors than auditees. A 2:1 ratio is usually fine.
Clearly we're here to talk about our audit observations and findings. Let's make sure we stick to this and not deviate.
Ultimately, for your meeting you will want to talk about:
What are did
What we found
The bigger picture
Possible recommendations; and
Don't get distracted.
Sounds stupid, but have the meeting face to face in a location near them. Requiring the auditee to come to you for the meeting is almost like dragging someone into the lion's dens and can easily change the mood.
As soon as possible. Doing this immediately as fieldwork has finished or whilst you are finalising the last parts of fieldwork is great. It'll ensure everything you are about to discuss is fresh in people's mind. Any gap between fieldwork and a findings meeting may result in both the auditor and auditee losing interest and potentially momentum in competing the review and implementing recommendations.
This part is my favourite. How we present our findings and observations can have a major impact on how well our findings are received and how willing management is to address the underlying issue. Regardless of who you are presenting to, there are some key points for consultation:
Make sure your presentation is appropriate to the audience
Once we have worked out who we want in this meeting, we need to make sure our presentation is tailored appropriately to them. For instance, those attending the meeting might be quite formal and straight to the point. In such case, a list of each observation point to discuss, attached to an agenda, may be appropriate. Alternatively, if the people you are presenting to are more creative or innovative, you may want to be a bit more creative in your approach.
Some alternative ways to present your observations can include:
Use of whiteboard and post-it notes
Story / picture book
Each of these approaches is a move away from the standard meeting agenda and list of issues. These methods for presenting your observations will require all attendees to be more involved and possibly create movement around the room.
Tell the whole story
Regardless of which approach you take to presenting your findings, you need to tell the whole story. Simply mention:
What we did
What we found
What we recommend;
How it fits into the bigger picture;
Everyone's role in achieving the bigger picture; and
What our next steps are.
We need to give context to our issues and how we reached our recommendations if we are to demonstrate value in the work we have performed.
Show the bigger picture
For in-house internal auditors, you may be closer to the company's strategy than externally hired internal auditors, but regardless it's important that we are aware of the strategy and how our audit and recommends can contribute to it. This is never an easy task, as those in more back office / core functions may not see how they directly contribute to the strategy, but with a bit of creative thinking and our skills in presenting this, we should be able to bring the business area around and demonstrate to them the important role which they play.
Thinking back to our ways of presenting, if we are to "draw our audit" on a whiteboard, you could show where we are now, where the strategy wants to take us,and map within the diagram, what can be done to move towards the strategy's end goal.
Create a timeline
When telling your story, I find it best to create a timeline. As mentioned above, this is the best way to show where we are, where we want to be, and what needs to be done to get there. Along this timeline you can show our observations and recommendations and link this back to the bigger picture. Drawing this on the whiteboard can help to walk the business area through our audit journey, making them feel as though these have been with us throughout this entire process.
Encourage participation and drive change
Whilst business areas are responsible for implementing recommendations, they may do this begrudgingly as they fail to see that value or purpose in the recommendation. This can be avoided by firstly having an open and frank discussion about the recommendations. Management, as they are responsible for implementing them, should have majority say in what can be done to address the risk. Our role as auditors is to ensure the action they will be taking will address the risk. But it's one thing for them to simply own the recommendation, and a complete other thing for them to drive change. This is where we need to be creative in our presentation to ensure they can see the bigger picture, and we can embed stimulating and exciting recommendation in our report which not only address the risk, but help them work towards a better business area which is actively meeting the needs of the company strategy.
Above all, remember to keep it simple. Do not over complicate what we are doing here, what we are trying to say, and what we want the outcome to be.