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Building a Better Auditor: Human-centric Auditing

Blogs Dina Lam, CIA Apr 22, 2024

I am the eldest daughter of six siblings and have always felt a sense of responsibility to maintain harmony in the family. This guides my actions, emphasizing the importance of collective understanding, empathy, and emotional connections. Maya Angelou famously once said, “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” And this is what I carry with me as an internal auditor — a human-centric internal auditor.

Internal auditing has transcended its traditional role of examining financial records and compliance. As we continue to integrate ourselves into other areas of the organization, we should incorporate the idea of “human-centered” auditing. This approach recognizes the importance of genuine empathy, collaborative relationships, and transparency in the internal audit process — which pays benefits in greater trust, better outcomes, and further reach within the organization.

Human-centric auditing begins by recognizing that a human being is behind every process, automation enhancement, policy, or transaction. In addition to delving into numbers, evidence gathering, and fact-finding, internal auditors should embrace the narratives and motivations that shape people and their work.

Genuine Empathy

Genuine empathy is the foundation of human-centric internal auditing. Internal auditors are encouraged to understand the headwinds and tailwinds employees face in their roles, practice active listening and kindness, validate emotions, and empathize without judgment. Internal auditors who lead with genuine empathy will gain a deeper insight into the intricacies of their audit client’s role and increase their business and risk acumen. When genuine empathy is practiced, parties involved feel valued, heard, and supported, leading to a collaborative internal audit.

Human-centered internal auditing mindset shift in practice:

Business focused: Why aren’t control owners sending evidence timely?

Human-focused: What is the easiest way to help people submit their evidence? How can we alleviate submission time commitments by introducing technologies that allow for self-pulling?

Business focused: Discrepancies found must be reported to the internal audit team timely.

Human-focused: How can we create an environment where team members feel comfortable reporting issues without fear of blame or retribution? How can internal audit proactively identify deficiencies given our knowledge of what’s to come?

Collaboration Across Departments

Collaboration is a cornerstone of human-centric internal auditing. Internal auditors should proactively engage with departments and stakeholders by being present in management discussions. This collaborative approach not only fosters a sense of shared responsibility but also shows management that internal audit is not just here to audit. When auditors and departments work together, the result is a collective effort toward achieving organizational goals.

Human-centered internal auditing mindset shift in practice:

Business focused: This control owner had many deficiencies last year; do they know what they’re doing?

Human-focused: Is the department facing significant constraints that are impacting their employees’ ability to perform? What is the true root cause? (For the above business scenario, I experienced a few employees whose deficiencies were caused by an overload of work. We rolled out a quarterly controls checklist that was visible to all control owners. Employees would remind each other to complete their controls if they saw controls that weren’t completed. They supported each other.)

Business focused: Adherence to audit procedures is required to maintain compliance.

Human-focused: How can we work together so audit procedures can be optimized while still ensuring compliance risk mitigation and success?

Building Trust Through Transparency

Trust is the currency of effective internal auditing. By openly sharing findings, insights, and recommendations, internal auditors contribute to a culture of trust within the organization. An example of some things I do at my company are quarterly newsletters and monthly SOX open forums. These means of communication increase transparency at all levels and allow people to feel comfortable with internal auditors and the program. This transparency bolsters the credibility of the internal audit process and encourages people to view internal auditors as valuable partners rather than mere watchdogs.

Human-centered mindset shift in practice:

Business focused: How can we create controls to minimize errors?

Human focused: How can we support control owners to be successful?

Business focused: Internal audit progress will be communicated with the SOX Steering Committee.

Human-focused: How can we ensure that all involved are kept informed about progress, observations, recommendations, and other relevant matters? Those involved should know whether tasks have been closed out and if there's any forthcoming work they need to anticipate.

Embracing human-centric principles means recognizing the value of empathy, collaboration, and transparency in driving organizational and audit success. With this, we can support a more inclusive, effective, and impactful internal auditing profession. I take pride when I hear sentiments like, “I didn’t know internal auditors are like this” or “Oh, there’s so much more to internal audit!” Human-centric internal auditing is an approach that supports the role of internal auditors in today's dynamic business environment and it guides us toward building trust, fostering collaboration, and ultimately contributing to the long-term success of the organizations we serve.

Thank you to Joshua Robinson (Allegiant and IIA mentor) and Trey Slinkard (EY) for sharing their human-centered practices with me.

Dina Lam, CIA

Dina Lam, is associate director of risk advisory & assurance at Revance Therapeutics, and is based in Orinda, Calif.