The Art Of Auditing

Internal Auditor, August, 2000 by Lawrence Metzger

"Creativity" and "auditor" are not contradictory terms. In fact, creative thinking is the linchpin of effective internal auditing--and it's a skill you can learn and polish.

THE WORK OF INTERNAL AUDItors is as much an art as it is a science or technique. The internal audit process encompasses far more than a series of rote checklists; it is much more akin to an archeological dig, where layers of information are methodically uncovered. To connect and understand the layers of organizations, the internal auditor must be able to think creatively.

Not only is creativity an inherent aspect of successful internal auditing, but it has become a hot, sought-after commodity in all fields. In his book Jamming, John Kao observes that we are living in an age of creativity. He argues, for example, that global competition is increasingly about a company's ability to mobilize its ideas, talents, and creative abilities. Kao maintains, along with other observers, that companies will increasingly be measured by their knowledge, and he emphasizes that creativity is the crucial variable in the process of turning knowledge into value.

Knowledge is more than mastery of facts and data; it is also insight-the ability to see into a situation and make connections. Ideas are interconnected insights that we can grab and run with. And it is creativity that enables the transformation of one form of knowledge to the next.

Kao states that "today's creative player is someone who picks up--faster, more deftly, and more usefully than others--the conflicts that need resolution; the gaps that need filling; the hidden connections that need drawing; and all the quirky, and possibly profitable, interrelationships that can be discerned in the new oceans of information." It's a definition that uncannily seems to sum up the demands of internal auditing.

ENHANCING CREATIVITY

The ability to generate novel responses to problems and challenges is a basic human ability. Creative thinking is a skill that can be learned. We all have the capability to innovate and think "outside the box."

Developing the habit of creative thinking takes effort, however, plus patience and a willingness to change our views. Robert Grudin, author of The Grace of Great Things, describes 10 habits and attributes that are linked to expanded creative powers.

1 A passion for work. The first and most powerful sign that individuals are committed to a life of creative endeavors is their sense of intensity: They want to see, explore, understand, experience, and go beyond what is already known.

In many ways, our work defines us. We need to identify with it and see it as an expression of our own character. In his book, The Care of the Soul, Thomas Moore states: "Work is sacred. Work is a vocation. We are called to it. But we are also loved by our work. It can excite us, comfort us, and make us feel fulfilled."

2 Fidelity. Staying in contact with your challenges is an essential aspect of creativity. For an auditor, who usually has to work under tight time constraints, fidelity involves developing a calm attention to detail. In the short run, it means developing a habit of intense concentration.

3 Love of the problematic. The auditor's constant need to balance issues such as change, ambiguity, risk assessment, and cost-benefit issues may make the audit process seem chaotic. But auditors need to embrace chaos, make it their own, and develop a love for the problematic. They should be attracted to pieces that do not totally fit. At times they may need to emphasize processes rather than particular solutions.

4 A sense of wholeness. Creative thought often expresses itself as a sudden connection or dosed circuit between ideas that previously seemed disconnected. It is crucial for auditors to understand the connections and layers in their organizations. Auditors must be aware of the relatedness of systems, such as operating and reporting systems, and the way employees connect with the overall organization and themselves.

Seeing connections and layers--and achieving a sense of wholeness--requires a high degree of technical knowledge. In fact, creativity and expertise are closely linked. Creativity almost always is dependent on a high level of familiarity with a subject area.

5 Boldness. We often regard innovators as "bold"; and it's a valuable concept for auditors, who must often devise original and creative ideas to help the organization. But in thinking the original, we sometimes risk thinking the ridiculous. When we think creatively, we often walk near the edge of chaos. Auditors must develop the courage to explore new ideas but be willing to reject invalid ideas once they are seen for what they are.

6 Consequence. Auditors must know that their work matters. They should view everything they do as a process rather than just as a project with deadlines and a completion date. When "consequence" becomes a habit, patience to complete work that is sometimes slow, tedious, and difficult may be inspired.

7 A sense of time. The notion of "that's the way we have always done it" is of little value in today's world. Such preconceptions can detract from valid insight. Auditors who insist on building exclusively upon past findings set themselves up for defeat. What was done last year or what various sources tell you may or may not be valid.