The Auditors' Dilemma: Audit Findings

I work in an audit firm where we have to perform the Internal Audit for clients. It is a outsource job and it’s an exciting job to be frank. But the only problem is that, after a while I found out that my colleagues are obsessed with the audit findings. I felt like going mad, as I don’t really feel that it should be this way because auditing is not a game, where we are set to win, meaning if you manage to raise findings (client’s weaknesses) then you are good at your work, so they say. For me, auditors are hired for a job to detect the weaknesses of a certain control in the organization and if there are no findings or lesser findings to be raised then that is something we auditors have to accept because it may be a fact that the clients controls is good or getting better.

For a while now I felt isolated since I feel like I don’t meet the “good” auditor criteria group. Then I thought that maybe I’m the only one who feels this way, and then it’s just nonsense to think about it.

Today, I found an article on the internet talking about the same issue. I was so shocked and at the same time felt relieved since I’m not the only one who thinks about auditing the way I did. It really is a big world out there but yet so small.

You can read for yourselves.

Copied & paste from: http://findarticles.com/p/articles/mi_m4153/is_1_58/ai_71268484/

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INTERNAL AUDITORS OFTEN PLACE TOO MUCH EMPHASIS on identifying problems. Although our duties largely consist of ensuring compliance with prescribed procedures, this does not mean that our goal should be to report negative information. In fact, I believe that we should approach each audit with the hope that there are no findings at all.

At the end of an assignment, many auditors will refer to a significant discovery as a "good" audit finding. Such terminology implies that we "got 'em" by finding something wrong. Auditors who think this way often take pride in uncovering problems during a relatively short engagement that fulltime employee who works in the area more than zoo days a year didn't notice. This type of attitude toward audit work sends the wrong message to our clients.

The term "finding" is actually a misnomer. If a problem exists, auditors are not usually the ones who discover or identify it. Instead, it's more likely that the workers or management in the area already knew of the problem but just haven't addressed it yet. Calling this a finding suggests that our clients were hiding the problem and that we found it--a "hide and seek" game between auditors and clients that organizations don't need to play. I prefer to label the issues encountered during an audit as either "ineffective controls" or "risks that have not been addressed." These terms are more consistent with the objectives-risks-controls formula in the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) framework of internal control. They also reflect the more forward-thinking and cooperative approach toward which our profession is evolving.

We certainly don't want to create the impression that auditors take pleasure in finding problems and that the more we find, the more satisfied we are. This type of attitude does not benefit the audit department, nor does it foster a positive relationship between auditors and their clients. We shouldn't send a message to the organization that auditors enjoy finding controls in a compromised state.

I think the correct attitude is to celebrate when we find nothing wrong on an audit. Of course, I'm not suggesting that we scale back our audit procedures or ignore the problems we find. Rather, when we examine an area and find nothing worth reporting, we should view it as a success for the whole organization, and not as a failure for the auditors.

A "good" audit report entails positive news for our clients. Or, as management might say, "the best audit report is no audit report at all."

Larry D. Hubbard, CIA, CCSA, CPA, is principal of Larry Hubbard & Associates in Bethesda, Maryland.

COPYRIGHT 2001 Institute of Internal Auditors, Inc.
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