Internal Auditors: If You See Something, Say Something
Blogs Richard F. Chambers, CIA, QIAL, CGAP, CCSA, CRMA Jan 13, 2019
Last week, my blog post "5 Internal Auditor Resolutions for 2019" included an important point that is familiar to most in a far different context, but also for our profession: "If You See Something, Say Something." Typically used regarding potential threats to public safety, the slogan has played an important — albeit sometimes controversial — role in thwarting bombings and other terror attacks, according to media reports.
At first glance, "See Something, Say Something" might not seem to be an internal audit issue. But the concept applies to situations internal auditors face every day. We often see problems and report on them during audits, but "See Something, Say Something" also applies to issues that may not be in the scope of an audit. It is easy to look the other way if something is not formally documented in our workpapers. But we have a bigger obligation – a higher calling. As the conscience of the organization, we must be constantly vigilant.
Early in my career, I encountered the issue of being told to look the other way because something wasn't within the scope of an audit. As a junior internal auditor, I was working on an audit of contract administration at a U.S. Army base. We were reviewing contract files in a vehicle maintenance facility when I noticed that several containers of toxic waste materials were sitting off in a corner of the facility. They were not marked, but I was sure they contained used petroleum products. More importantly, at least two of the 50-gallon containers were leaking. I reported this to my boss. I still remember his response: "Richard, that's not what we are here for. If we start writing up everything we see wrong, we will never get out of here."
Although my boss declined to comment on what I was certain was an environmental compliance violation, I became a strong advocate for including a review of maintenance of hazardous waste in the next year's internal audit plan. I realized the damage had already been done, but I always believed that, when we saw something, we should have said something.
Speaking up about observations that are not within the scope of our audits may demand kid gloves — not boxing gloves. When you find problems, how you point them out can determine whether you are seen as helpful or as a know-it-all tattle-tale; as a reliable source of information and advice, or as a snitch. You don't have to shout it from the rooftops each time you notice a minor issue. But if you see something wrong and you are an internal auditor, you need to say something, and you often need to say it quickly and carefully. You don't need to use an accusatory tone, and you don't need to assign blame. If you are on an audit team, alert your team leader (as I did). If you are a direct report to the chief audit executive (CAE), raise it with him or her. If you are the CAE, then raise it with management — or if management is implicated or nonresponsive, then raise it with the audit committee.
As internal auditors, pointing out potential problem areas is an essential part of our jobs. We must be willing to step up and speak courageously when we see behavior that's potentially harmful or creates risks, even when top executives are involved. Some examples of things we might observe that could warrant saying something:
Lax physical security in facilities where we are auditing.Inadequate protection of sensitive or proprietary documents in facilities where we are auditing.Wasteful or extravagant spending practices in the organization.Violations of corporate policies or regulations outside the scope of the audit (such as the petroleum storage violations I observed).Improper behavior by staff or management in facilities where we are auditing (sexual or other harassment of members of the audit team or other employees).Staff or management taking shortcuts or violating policies to achieve predetermined objectives (ends justify the means behavior).A misstatement or misrepresentation of facts in a staff meeting or board meeting, or inaccurate information provided to a regulator.
Speaking up when we see something inappropriate isn't limited to the actions of organizational management or staff. We also must hold ourselves accountable. For example, if we notice internal audit colleagues taking shortcuts that could undermine the accuracy or credibility of an internal audit, we should not hesitate to say something.
In the past few months, I have written and spoken about the risks that courage deficits present to our profession. We must constantly check our own moral compass to validate that we are acting ethically and courageously in executing our responsibilities. When you observe something wrong (even if it isn't within the scope of your audit), you have an opportunity, and an obligation, to share needed information that can help your organization. Some people might view this as being a snitch. But in many cases, those who castigate someone as a snitch are angry at being caught in wrongdoing. To our organizations and others who are being threatened or injured by the wrongdoing, the initials SNITCH simply stand for Share Needed Information That Can Help.
I look forward to your thoughts on speaking up.