Building a Better Auditor: The Power of Storytelling

The Problem with Traditional Presentations

So often, presentations are weighed down with numbers and data. While this helps us feel accomplished in our discoveries, we must remember, the purpose of communication is for the receiver. The goal of presentations should be the audience walking away with a clear understanding.

We can achieve this by presenting content in a way that can be easily remembered. Enter storytelling.

Storytelling isn't limited to Ted Talks and motivational speakers. It can be powerfully leveraged throughout the audit process anytime we need to share a concept. Nowhere is this more useful than the day-to-day, informal presentations.

Let's explore the application of storytelling within a problem remediation discussion.

As the auditor, you've done all the work, from preplanning to root cause analysis. You’ve identified a reportable issue that you understand inside and out. However, you don't own the problem, nor do you have ownership for solving it. Therefore, you need to communicate all you know, emphasizing its importance, to the one who can take action, the client.

Consider this:

• No one knows the problem better than you.
• No one knows the business better than the client.
• The client needs to understand the full issue to formulate the best solution.

Your role is to present the full scope of the problem to the client in a clear, compelling manner that allows them to see it as you do. Falling short means the client will only grasp a portion of the issue and solve for what they understand, failing to address everything you’ve identified. Effective communication is the bridge between your comprehensive analysis and the client's ability to implement thorough, effective solutions.

Telling the Internal Audit Story

To tell an effective story, you need the proper elements:

• Characters: What the story is about, a main character protagonist and an opposing force antagonist.
• Plot: Four parts transitioning the sequence of events, including an introduction, rising action, climax, and falling action/resolution.
• Conflict: The central challenge.
• Setting: The time and place (or scenario).
• Theme: The central idea or message.
• Point of view: How the narrative is presented.

While few audits set up to be Hollywood thrillers, they can still have scripts. Most audit findings can be worked into this format, with one big exception: auditors should not write the resolution. Your storytelling will generally build to the plot climax where you relinquish the final scenes to the client. Although you won’t draft the resolution, as an advisor you can step into the role of director and help guide the scene.

How the story is presented is also crucial. When presenting the point of view, remember:

• You and the client are on the same team.
• Internal audit seeks to add value.
• The perspective should be "us versus the problem," not "us versus them."

Example: A Regulatory Compliance Gap

Let's take a narrative example where an audited process doesn’t meet regulatory compliance requirements:

In our organization (protagonist), we've discovered a critical gap in our compliance with Regulation K (conflict). This regulation, overseen by the Federal Review Agency (FRA), requires providing written notifications to all customers before taking specific product applications (setting).

As we delved deeper into the audited process (plot – rising action), we uncovered that while the organization diligently notifies new customers, we've overlooked an important segment: our existing customers applying for new products (antagonist – the compliance gap). This oversight stems from a disconnect between our customer profile and product management systems.

Just as we were grappling with this revelation, a plot twist emerged (plot – climax). The FRA released drafted updates to Regulation K, which would allow for electronic notifications alongside written ones. While the timeline for these changes remains uncertain, FRA leadership has strongly hinted it is almost a certainty as the update would align with the agency's modernization priorities.

We now find ourselves at a crossroads, faced with multiple layers of complexity and uncertainty (plot – falling action). As your audit team, we're here to navigate these challenges with you, offering our insights and support. Where would you like to begin in addressing these issues?

This is where the theme of collaboration and point of view meet to turn the script over to the client to write the ending.

To start incorporating storytelling in your audit presentations:

1. Identify the key elements of your story.
2. Use vivid language and concrete examples to bring your story to life.
3. Practice your delivery, reflect, and adjust the presentation to work toward a natural, engaging flow.
4. Plan for a transition that allows the client to take the lead and create the resolution.

Full resolution hinges on communicating a complete understanding of the issue. By leveraging storytelling techniques in your audit presentations, you can more effectively communicate findings, engage clients, and collaboratively work toward solutions. Remember, a well-told story not only captures attention but also drives understanding and action.