By Richard Chambers | September 15, 2014
When customers are unhappy, most organizations will scramble to fix the situation. As the old adage goes, the squeaky wheel gets the grease, even when a complaint might seem groundless.
So, does this translate to our profession? Are internal audit clients always right, too? And how far should we go to accommodate a client’s point of view, especially when we are convinced they really might be wrong?
Internal auditors serve many stakeholders. We can’t simply back off recommendations to one when we know other stakeholders are depending on our assurance. There are no money-back guarantees in internal auditing, because customer satisfaction cannot always be assured, but our goal is to come to consensus.
When faced with disagreement, we try to understand our clients’ point of view. We try active-listening techniques. We empathize with the emotion behind an unreasonable outburst, for example, recognizing that nervous audit clients are often under stress. We patiently explain the advantages of our recommendations in a way that addresses the client’s needs and, when possible, we try to seek alternatives that are acceptable to all parties.
But, as we all know, there are times when all the usual tactics fail and it is impossible to come to a consensus.
In the rare situations in which client buy-in is impossible to achieve, there are only three options open to us. The most tempting — but usually the worst option — is to do nothing. Too often, draft reports go unissued for months or even years because contentious issues remain unsettled. But the impact can be substantial: When a report is not delivered on schedule, internal audit loses credibility and, worse, risks remain unaddressed. Postponing a report won’t make the issue go away, and if the differences truly are irreconcilable, the client relationship may only worsen.
A second option is similarly counterproductive: going ahead and writing the report as if the disagreement didn’t exist. It’s only natural to prefer our side of the story, but if we ignore the client’s point of view (particularly if they disagree with the facts we presented), we’ll need to be prepared for lasting damage to the relationship. And there could be further fallout: The client may even appeal to senior management or the audit committee. The audit report, in other words, won’t be the final word on the issue.
A third option is to give the client an opportunity to express their point of view within the audit report. This shows that internal audit is doing everything it can to ensure the report is fair and balanced. Including the client’s comments demonstrates that we are listening and that we respect their opinion, even if we disagree with it.
Over the course of my career, I often included the client’s comments verbatim within the audit report (or at least in an appendix), because it helped to ensure that the draft report would be accepted without further delays. Occasionally, you may even find that, when the client reviews both opinions in a fairly presented, balanced report, they accept internal audit’s recommendations after all. Assuming our recommendations are justified, there could be no better outcome.
Have you run into similar confrontations? What techniques do you use to ensure everyone “gets their day in court?” Share them with us here.