Five Things Not to Say When You’re Starting an Internal Audit

I was recently speaking with an old colleague who is now chief audit executive of an American company. She was lamenting how “testy” management seems to be with internal audit these days. She observed that before the pandemic, the opening meetings for new audits used to be a positive experience, but that there seems to be more tension in virtual meetings today. I quizzed her about the meetings, and asked her if there are triggers that derail the meetings? She shared some examples of exchanges between her audit teams and management that seemed to raise the ire of those whose areas are about to be audited.

As she shared examples, I couldn’t help but reflect on my own experiences over the years. The opening meeting for an internal audit can set the tone for the entire engagement. Management is often apprehensive that we are starting an audit of their area anyway. If we are not careful about the message we send, the opening meeting will simply serve to reinforce their suspicions about our motives.

​​​If you have been in internal auditing for a few years, you’ve probably seen it happen. When you start your opening meeting, everything is going smoothly. You’ve prepared carefully for the meeting, and you​ have had cordial relationships with your audit clients in the past. Suddenly, however, your clients are frowning, and communications seem to have become a one-way street. It’s almost as if a door mysteriously closed. Management’s arms are crossed defensively, and they’re no longer agreeable with anything you say. At times, you might not even be aware of why the change took place — you only know that the chance for open communications and sharing of ideas is fading away.

What went wrong? You might never know. But even if you don’t know why the last opening meeting deteriorated so rapidly, there might be a way to help ensure it doesn’t happen again. Every client and situation are different, but here are a few specific statements that I discovered could quickly raise hackles during opening meetings:

• “We are here to help you.”
  It’s always helpful to establish and maintain a cordial tone throughout the opening meeting, but sincerity is key. The “we are here to help you” cliché is often referred to as “the oldest fib in internal audit.” The second oldest is management’s response, “we are glad to have you.” Your client might be happy to see you — or you might be just about as welcome as the last government auditor who reviewed your personal income taxes. If that’s the case, your cheerful opening comment might unexpectedly fall flat. While I always hoped we would “help” management, I let our actions do the talking.
   
• “We are starting this audit because your area came out ‘high’ on the risk assessment.”
  I once literally had to jump between an internal auditor who uttered those words and a member of management to whom they were directed. Signals at an opening meeting that internal audit has already concluded there are problems often create tension with management. Hopefully you are there to assess the effectiveness of controls to mitigate risks. If you think about the engagement from management’s point of view, you can probably think of a more compelling explanation for your audit than this.
   
• “Our objective is to assess the overall effectiveness of your area.”
  It is important to articulate potential audit objectives as clearly and concisely as possible. Broad adjectives such as efficiency or overall effectiveness are difficult to assess unless there are widely accepted criteria. And at times, statements about assessing “overall effectiveness” can give an over-anxious client the jitters. The implication might be that you are on some sort of “witch hunt” from which they cannot possibly emerge unscathed.
   
• “We will brief you on the results at the conclusion of the audit.”
  Communications must be continuous. Holding the results until the end of the audit will invariably frustrate management and reinforce the stereotype that the internal auditors have a “gotcha” mentality. It’s okay to let your client know that you will talk with them at the conclusion of your audit — but only if you also make it clear that there will be no surprises during that meeting. An opening meeting should help to soothe unnecessary fears, not create anxiety about how the audit might end.
   
• “We don’t have anything to tell you today. We just wanted to know if you have any questions.”
  If you hold a meeting without having anything to say, you are not just missing an opportunity — you are wasting management’s time. An opening meeting should be about sharing information, and you should prepare in advance to share information such as why the audit is being undertaken, preliminary objectives, projected milestones, introduction of team members, and what is expected of management. If you don’t have anything to tell your client, don’t have a meeting.

It is also a matter of personal preference, but I never took anyone to an opening meeting unless they had a role to play. I also never wanted the audit team to significantly outnumber the participants from management’s team. In the era of virtual meetings, it is tempting to include everyone who may touch the audit in the meeting. It is a good idea for management to meet all the members of the audit team early on but try and craft an agenda to afford everyone a chance to make a contribution. Otherwise, it can appear we are over-staffed and under-worked.

An internal audit opening meeting should be much more than just a moment to say hello at the beginning of a new audit. It is our opportunity to make a strong first impression, to create healthy working relationships, and to motivate our clients to work with us toward positive outcomes. The meeting can set the tone for the entire engagement. Unfortunately, however, an opening meeting can also be a point at which working relationships are damaged. Too often, mistrust is created or other barriers are established simply because of a misplaced word or thought at the beginning of an engagement.

We only get one chance to make a first impression. Let’s make it a good one.