Mind of Jacka: Joint Accountability
Blogs Mike Jacka, CIA, CPA, CPCU, CLU Aug 08, 2024
Another story from the “Good ol’ days.” How old? Well, in this case, I want to talk about the days when reports were printed out on paper and required wet signatures. (I think that’s the term the kids are using these days.)
For a few years, Farmers Insurance Internal Audit issued joint audit reports. That meant that the final report contained the signature of the audit manager and the owner of the process being reviewed.
It is amazing what requiring a signature will do to everyone’s agreement with the content of said report. One problem we faced was the issue of repeated findings. (There were a number of problems that caused this, but I don’t want to go into all of them now.) When we required the process owner to put their J. Smith on the report, voila, accountability.
I know some might worry this would cause delays in the reporting process as the back-and-forth that seems integral to report writing increased. However, that wasn’t our case. I think this was because we were already doing a pretty good job of vetting and getting agreements. And yet, having a pen-to-paper and autograph-to-signature line raised the process owners’ awareness, and this made all the difference.
Why do I bring up this antiquated, pen-and-paper approach in this age of speed, agility, and electronics?
Well, an interesting comment came up in a recent conversation. The person worked for an audit department that was embracing agile. I barely know enough about ajile to spell it (whoops). But I do know it takes a commitment not only from the audit department, but from the process owner.
The individual was describing how hard it was to get these owners to buy into the agile process. The clients felt that the time commitment wasn’t worth the extra work.
Now, I don’t have an answer on that one…exactly. However, it got me thinking about working with our clients and how the whole process is perceived. I put that together with the signature thing. And here is the point/question. Why doesn’t every audit build in accountability for the process owner?
What if we went in and said we needed to do a project with them? We would still control it. It would still be our audit. But we would have them be part of the team. Not just someone with whom meetings are held and questions are asked, but members of the team doing the work.
And the result? A joint audit report that is signed by all parties.
This is what is nice about no longer being in the working world. I can throw out these ideas and think they might work. And there is no price to pay. But I believe that, with the working relationships we had in our audit department, it would not have been too much of a stretch to put this in place…at least in some instances. And from that, maybe come up with an approach that got more buy-in organizationwide.
Or maybe not. You tell me.