Should You Embrace Collaborative Auditing?

Collaborative auditing sounds soooo nice.

“Our prior city auditor was punitive and we butted heads all the time. It’s like our new city auditor went to a different audit school or something… because he is collaborative and listens to us.” City Manager, May, 2022

Well, isn’t that neat? This City Manager (who spoke on a panel at a recent government audit conference) is happier now that he has a new auditor that cares.

I mean, which auditee wouldn’t want their auditor to be compassionate and willing to flex to accommodate the auditee’s needs?

But does he know what he’s talking about?

These comments remind me of the times that I changed hair stylists. The new one always disses the old one and says something like, “I can’t believe they did this to your hair! I know better. Let me take over.”

So, granted, in the City Manager’s comments there was a little bit of that, “I know better now because I’ve upgraded” attitude.

But I had to wonder if this City Manager knew what the highest and best use of an audit function is? Should the City Manager really be calling the shots here?

I can go into my stylist and demand a certain style. Sure. But if I did that, I’d still look like Stevie Nicks circa 1976 because her hair was incredible! However, I don’t think that cool, funky look works on my 56-year-old face and body. I allow my hair stylist – who knows what she is doing and stays up-to-date with the latest techniques and styles – to decide what would work best for me.

So, I have to wonder if the City Manager is getting what his citizens truly need out of the audit function or if (as I suspect) he is just trying keep the auditor from causing political dust-ups by praising how well the auditor cooperates with city leadership. Is the City Manager, instead, placating the auditor by using soothing, sweet terms like ‘professional cooperation’ and ‘collaborative auditing’?

Should auditors strive for collaboration?

So, I wondered, is that what we auditors should strive for? Cooperation and collaboration?

The prior city auditor that this City Manager was dissing was my first government audit director. So, yeah, he probably owned a few Fleetwood Mac 8-tracks in his life, but he was also a model of integrity, skill, and objectivity. When he spoke, people listened. And he worked with the citizens in mind, not the city managers or city council.

I learned a lot from him and to hear him criticized for not being helpful was thought provoking. How far should the auditor go to make the auditee comfortable, I wondered.

Has the ground shifted?

But the more time I spent at the conference, the more I heard the presenters and the audience use the word, ‘collaborative.’

One speaker said they stopped quantifying findings because it made the auditee upset. And I felt the ground under my feet shift.

Due to the strong influence of the IIA, the professional goal of many auditors has evolved into a more – let’s call it ‘humane approach’ to auditing.

But is this evolution wise?

Is collaborative auditing where we really want to go? Does the goal of being collaborative and cooperative with management result in our highest and best use?

Questions to ponder 

Here are some questions for you to ponder to help you define who you are and who you want to be to the people you serve:

• Do you want to have the reputation for telling truth to power or for working to help power achieve their goals? Or somewhere in between?
• Are you tired of being portrayed as an enemy of management or as a watchdog and want to be part of making decisions in your organization? Or do you believe that when you are part of the management team, you are compromising your objectivity and independence? Or somewhere in between?
• How firm are you when it comes to auditor independence? Are you a Yellow Book audit shop and need to avoid ‘non-audit services’ a.k.a. consulting services? Or are you a Red Book shop and welcome consulting projects?
• What do ‘those in charge of governance’ expect from you? What should they expect? What do they really need?
• What do the ultimate users or beneficiaries of your audit work need?
• Do you want to do a different kind of work? Are you bored with providing assurance? Should you take your established audit function with you as you evolve in your career or should you leave it be and get another job?

Don’t expect auditing to be glamorous

Audit work is valuable, albeit unglamorous. You won’t be glorified or admired except by other auditors. You won’t get many pats on the back… especially if you are doing your job and making people a little uncomfortable with the truth.

You may even get made fun of. The 2022 movie Everything Everywhere All At Once features a stereotypical portrayal of an auditor by Jamie Lee Curtis.

But if you feel like providing objective assurance and telling the truth matters, as I do, stay. But do your team and your stakeholders a favor and be clear about how far you want to go with collaborative auditing.

I’d love to hear your take! Write to me at info@yellowbook-cpe.com

For more on this subject:

Yellow Book Ethics – July 2022

Red Book vs. Yellow Book – August 2022