Mistakes Rookie Internal Auditors Make and How to Fix Them

GUEST BLOG POST
All human beings are creatures who change with their environment and circumstances, who hopefully grow and develop with experience, particularly their work experience. But all processionals have to start somewhere. We can probably all remember the early days of our careers as we fumbled and bumbled our way through the dos and don’ts, picking up tidbits of wisdom, and slowly learning the ropes.

Internal auditors are, of course, no different. But that learning curve can be steep and the expectation for rapid progress is intense for most newly minted auditors. Clearing comments left by our bosses, examining last year’s work to build a foundation for this year’s agenda, and taking required professional development courses makes the metamorphosis from beginner to experienced internal auditor an unusually fast life cycle.

I began my audit career in a very different world. Enron and WorldCom were recent history and still being dissected at business schools and auditor conferences. The economy was humming along and had been for a while. Bernie Madoff was a well-respected hedge fund manager with unbelievable returns. The last major banking and financial crisis was in the 1930s. And a pandemic? That was something found only in history books, not a global event affecting our daily lives and work routines.

Eventually, I left the competitive world of external audit and firm politics behind and moved into an internal audit role. I’ve been here ever since and learned how to provide value in different internal audit roles. One of the universal experiences of being an internal auditor is looking back on your early work and taking stock of just how far you’ve come. And let me be clear, it is not a pleasant experience! Literally every internal auditor I know has laughed at themselves while trying to follow the workpapers from their first audit. It’s a bit like reading through your old Facebook or Twitter posts or looking through photo albums from your college years.

Being young and inexperienced can’t be avoided, but there are some common blunders that can. What are some of the “tells” that betray a brand-new auditor? When are these just funny anecdotes and when can our rookie mistakes cause real damage? How do these newbie missteps become bad habits, stunting professional growth? And finally, what can new internal auditors do today to project a more professional image to superiors, co-workers, and audit clients? Keep reading!

Pretending to Understand
One of the ironies of auditing is that the longer you work at a client or company the more questions you have! You learn exactly how much you don’t know, and this knowledge about being unknowledgeable accumulates over time. Other traits that develop as you mature are the ability to admit when you don’t know something and the confidence to ask more questions.

New auditors often feel what is called “imposter syndrome” and make some bad choices as a result. One is pretending that something makes sense to them even when it doesn’t.  If you don’t understand something, there are three possible reasons why. The first explanation is that you aren’t smart enough to understand. This is very unlikely. The second is that you don’t have all the information. This is very likely! The third is that there is something truly wrong under the surface. Please let go of those insecurities that could lead you to assume you are the problem. Approach questions and issues as though you simply don’t have all the information (yet!) and that you are trying to understand.

If you do this work long enough you will eventually uncover an issue. Whether the underlying issue is an unqualified staff member making a mistake or something more nefarious like a fraud or theft being covered up, the only way to figure this out is to be honest when something doesn’t make sense. This leads to asking more focused questions, digging deeper, and showing the person you are auditing that you won’t just go away. I encourage all auditors to be confident, ask questions, and keep searching for the truth. Professional skepticism is an important skill that good internal auditors hone over time. In the meantime, work on asking questions when you don’t understand and avoiding the temptation to fake it.

If the explanation was there all along, and someone had to walk you through it, what’s the harm in that?

Failure to Communicate
Auditors are one of the few professionals who must be able to communicate with people at all levels of the organization. A common sign that an auditor is new, whether they hold an external or internal audit position, is having some difficulty communicating with others. The most common type of breakdown is when auditors are intimidated by top executives. While the C-Suite deserves your respect, they are required to answer your questions, just like anyone else. Don’t be rude, but don’t simply defer to them or avoid them either.

A more troubling trend I’ve witnessed is auditors speaking down to frontline employees. Your education level, position, paycheck, or any other status indicator doesn’t give you the right to disrespect anyone! In fact, auditors can learn a lot from the tellers, cashiers, and assembly line workers that keep your company going. Be the kind of person that people seek out when there is a problem. If you’re rude or condescending to others, you are doing yourself and your audit team a disservice.

I encourage auditors everywhere to think of their auditees and interview subjects as human beings, rather than positions on an organizational chart.

Working Longer, Not Smarter
Internal auditors are often workaholics, and not by choice. For many auditors, a professional firm is where our careers took root. When you are new at a firm, your role is simple: Charge Hours. So, you make yourself available to work at nearly all times. Early mornings? Of course. Late evenings? Sure. Weekends? No problem. This all-work-and-no-play lifestyle has some weird consequences. Auditors can get competitive and even judgmental towards one another about hours worked, hours billed, life events missed, and other indicators of suffering a bad work-life imbalance.

“I haven’t gone grocery shopping in two weeks!”

“Oh, yeah? I didn’t see my kids yesterday!”

“Well, I’m so busy I didn’t even watch the big game this weekend!”

I’m not joking. I have actually heard people say these things. I have also seen people come in early just so that everyone who comes in after them sees that their car is already in the parking lot. It’s funny, but also insane.

While it’s okay to have a laugh at this behavior, the lesson is to keep these feelings and statements away from your audit clients. Nothing screams “I’m new at my job” more than telling anyone who will listen how much time you spend doing it. While the poor saps in your same circumstances might be impressed by how little you sleep, I can assure you, your internal audit clients are not.

I’ve been the clueless new auditor, bragging about my lack of sleep and nourishment and a life devoid of fun. I’ve also been the client on the other side who doesn’t have to do that anymore. We don’t want to hear it. It’s boring to people outside of your bubble. We prefer you be alert, fed, rested, and good at your job. That will get the job done—and you gone—faster. We prefer that you aren’t suffering, because… well, because we aren’t monsters!

I’ve been picking on external auditors and consultants, but internal auditors also display this behavior. When billable hours are not the goal, you are expected to get your job done during normal working hours. Regularly working evenings, weekends, and holidays—and demanding this of your staff if you are in a leadership role—can bring down team morale, cause staff turnover, and create tension. Even worse, it can lead others to question why you can’t seem to get things done during business hours. Good managers love the expression: “Work smarter, not harder!”

Don’t talk about your work ethic, show it. Work with a sense of purpose and urgency, get your reports out in a timely manner, keep your email inbox clean and current, and respond to inquiries quickly. Every once in a while, you’ll get to flex that workaholic muscle and put in some overtime to handle an emergency or deadline. Do so happily and with a sense of pride that you have a good job.

I’ve Got a Great Idea: Audit More Stuff!
Auditors who are new to the game are often eager to prove their worth. External auditors typically meet with internal auditors throughout an engagement, for many reasons. When I was on the client side, I started to notice that some external auditors, consultants, and even regulatory examiners would recommend that we audit more stuff!

Oh wow, great idea guys. Never occurred to us before!

Did my mind go there when I was a new external auditor? Yes, absolutely. This was my own immaturity and inexperience. Once you’ve been around the block, you realize that time and resources are always limited, and every internal audit team makes hard choices. Questioning why the auditors didn’t get around to a project that would have addressed exactly what you’re thinking about at any given moment means questioning their entire audit plan.

By the time I was in a leadership position, after having this pointless discussion one time too many, I started handling myself differently. Whenever an external auditor, consultant, or examiner started going down the “why didn’t you…?” path, I would set up a private meeting. I would print out the audit plan (so I could shred it afterwards), walk them through the development and allocation of hours, and let them see for themselves how much of a fine line we walk. They usually came away from this meeting with a new understanding of the hard choices auditors must make and would have more respect and trust for the audit group as a result. Would they agree with all the choices I made? No, of course not! But as a leader it was my responsibility to defend my decisions and to help others understand the process.

See related article: “Ten Things Every New Internal Auditor Should Know.”

Inexperienced internal auditors may question this process and could benefit from the perspective of a more experienced auditor. If you are new to an internal audit group, you probably have some opinions about your boss and the decisions they have made. There is probably more going on than you know. Watch, learn, and keep an open mind. Leaders, don’t just tell your staff what to do. Teach them how the audit plan is created, ask for their feedback, and earn their buy-in.

Dress Code Fails
When my co-worker, John Kaneklides, and I were getting our consulting practice up and running, we had a brainstorming session. We workshopped all the things that drove us crazy about consultants and external auditors when we were managing these engagements on the client side. We wanted to spare our future patrons! One was so simple, so silly, and so common: auditors asking us about our dress code. This happened all the time, and we knew right out of the gate that we were dealing with an inexperienced team. Did I do this when I was brand new? Unfortunately, yes.

So, I have some thoughts. External auditors, please do not ask your clients what you should wear to work. I understand that at many firms the dress code is to follow the client’s dress code. This is a bad policy. It is not your client’s responsibility to communicate their company’s work aesthetic to you. You are an adult, and your dress code should be your own interpretation of acceptable work attire. When in doubt, overdress on the first day and course correct thereafter.

This brings me to internal auditors, who are not immune from failing to dress appropriately. Your company probably has a dress code, which you should think of as the bare minimum. This standard was put in place for workers who don’t make good decisions on their own. Internal auditors know as well as anyone that a policy is limited in what it can explain. If your company allows you to wear jeans to work, take care to wear well-fitting, unripped jeans with nice shoes and a work-appropriate top or jacket. Whether your dress code calls for casual, business casual, or business professional dress, there are some universal truths. Practice good hygiene, keep your clothes clean and pressed, and invest in quality classic pieces.

We’ve all heard the saying, “dress for the job you want, not the job you have.” It’s a cliche, but it’s 100 percent true! internal auditors are leaders, and leaders are expected to take care in how they present themselves. Do what you need to do to come in to work, or show up on Zoom, looking like you fit the part!

This is hardly a comprehensive list. There is lots to learn when starting a new job in external or internal audit and you will make many mistakes. I certainly did. The job may seem daunting and the hill tough to climb, but you will get there. You will pick up nuggets of wisdom, correct your early errors, and learn from your mistakes. Before long, you’ll be seeing the rookie bonehead moves that newer internal auditors are making.

Readers, have you experienced any of these issues? What new auditor traits and tells did I miss? Please leave a comment!

Olivia Whipple is co-founder of The Audit Library, a digital collection of internal audit documents, templates, and tools. She is also an internal audit consultant specializing in the credit union industry and a former Chief Audit Executive.