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​The Dynamics of Interpersonal Behavior

To be successful, auditors need to cultivate their soft skills just as much as their technical abilities.

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​Often described as a soft skill, building strong interpersonal relationships between internal auditors and their wide variety of stakeholders is vital for a function’s success. Audit work entails listening, understanding, questioning, explaining, and, sometimes, dealing with sensitive information or challenging people’s cherished beliefs. Yet, internal auditors seem to focus their training and continuing education on developing and improving an array of formidable technical skills, seldom paying the same level of attention to sharpening their relationship skills.

Many auditors seem to expect verbal and written communication techniques, active listening and body language traits, and conflict-resolution skills to develop of their own accord — an approach they would never take in building their technical auditing abilities. This occurs even though effectively gathering information from a wide array of sources is germane to the role, and communicating audit findings forms part of the function’s requirements under The IIA’s International Standards for the Professional Practice of Internal Auditing. An audit department that fails to listen and communicate is unlikely to best serve the needs of its stakeholders.

One symptom of a lack of rapport can be seen where audit functions fail to deliver their findings in ways that stakeholders find useful. That suggests and entrenches a lack of understanding about the role of audit and what it can deliver. Agile departments tend to be more in tune with management and the board. They adopt a range of communication formats that better suit the needs of stakeholders, especially in areas such as strategy and emerging risk, where full-blown audit reports may not be as timely or relevant.

Soft Is Hard

When it comes to understanding the full range of people skills that need to be developed, part of the challenge for anyone in business — not just auditors — is that the terminology is not widely agreed to, says Manny Rosenfeld, senior vice president of internal audit at MoneyGram International in Dallas. Soft skills can be hard to define precisely, but are usually taken to include verbal and written communications, presentation skills, conflict-management skills, leadership, team building, and an ability to assess corporate culture.

In addition to being critical business skills, the ability to form and maintain effective interpersonal relationships is a life skill that some people seem naturally better at than others, says Rosenfeld, who co-authored People-Centric Skills: Interpersonal and Communication Skills for Auditors and Business Professionals (Wiley). “Technical skills are easy to teach, but if you are really interested in developing good people-centric skills, it can take a lifetime to master,” he says.

That is no reason for complacency. While Rosenfeld is skeptical that everyone can be taught full proficiency in certain areas of interpersonal relationships — such as effectively managing teams — all auditors should seek to make progress in the basics. He says there is tremendous potential for developing these skills over time, especially for somebody motivated to succeed. He prefers to talk about interpersonal relationships, because auditors can too often focus on higher-level soft skills — such as report writing and making presentations — while overlooking some of the more fundamental aspects of dealing effectively with people.

“Building trust is absolutely essential in creating successful interpersonal relationships,” Rosenfeld says. “Most people can cultivate trust over time, but auditors need to do it in a few days if they are to conduct a suitable audit.”

This lack of time makes it imperative that auditors become consciously aware that they are trying to build trust. Keeping promises on deadlines, actively listening to feedback, and delivering on audit’s stated goals all help. Trust can be further augmented by showing respect for the opinions of others, he says. That can be difficult because the culture of the audit team or the business may not always be one of openness and mutual respect. He says auditors need to have an open mind and assume that management is trying to do a good job and that differences of opinion between auditor and client can arise simply because they are approaching the same facts from different perspectives.

The most junior auditors need to start learning these techniques from day one. “These skills often receive little attention until auditors become managers,” Rosenfeld says. “But chief audit executives [CAEs] should turbocharge learning for the team in this area because it’s not something people can learn overnight and it is crucial to success.”

It's All About Strategy

Jim Pelletier, The IIA’s vice president of Professional and Stakeholder Relations, agrees that building effective relationships with audit clients in the business should not be left to chance. “While auditors will have a strategy that will look at how we will use our expertise to deliver an effective audit, we don’t often plan our communications in the same way,” he says. “Why not?”

The group dynamics at work during an audit make this type of planning crucial. Management often views the audit team as a group of outsiders coming to find fault and criticize its work. That can make them overly defensive. In dealing with the arrival of this “outside group” of auditors, the inside group in the business will tend to exaggerate the differences between themselves and the auditors.

“It’s like the situation among sports fans,” Pelletier explains. “In our minds, we ‘dehumanize’ the other team, the players, and their fans, which allows us to rationalize using negative stereotypes, name calling, and insults.” While this is often playful among competing fans, Pelletier says, it can manifest in uglier ways in the office. By negatively labeling auditors as snitches or worse, individuals can then more easily rationalize treating auditors differently. “Many auditors have been lied to or purposefully given misleading or incomplete information,” he says. “This is not acceptable human behavior, but the rationalization brought out by the dynamics between in-groups and out-groups makes it feel okay.”

By labeling auditors as police, for example, the inside group is creating a distance that protects them from personal harm. Pelletier cites psychologist Thomas Szasz, who said: “Every act of conscious learning requires the willingness to suffer an injury to one’s self-esteem. That is why young children, before they are aware of their self-importance, learn so quickly.”

If this is correct, then auditors represent a threat to a client’s self esteem. Pelletier argues that to overcome this obstacle, auditors need to put empathy at the center of their communications strategy. “We have to acknowledge that whatever people may say to the contrary, being audited feels personal to the client,” he says. “Instead of being in denial about this, we must recognize that is a natural, negative psychological reaction that derives from the very nature of our role.”

Displaying empathy entails making sure you can see things from the perspective of those on the receiving end of the audit — and demonstrate that you care and are truly there to help. “Making the audit feel more like a partnership will help diffuse negative situations,” Pelletier says. “Those will still arise, but instead of reaching for the hammer every time, we should try the handshake.”

Team Interaction Is Key

Wendy Bedwell, assistant professor of psychology at the University of South Florida in Tampa, says good interpersonal skills are at the heart of creating effective audit teams. How well a team cooperates, handles conflict, and solves problems are all predicated on how well team members interact with one another, she says.

Bedwell says people who perform well generally actively listen to others, have good nonverbal skills — such as using the right body language in different situations — and develop an ability to be assertive without coming across as pushy or aggressive. While she says that how a person tends to interact with others is partially a character trait, she also says it is a skill that any auditor can develop.

It is an area in which CAEs can play a key role. The first step is to measure the interpersonal skills of each auditor. “There are several ways CAEs can measure interpersonal skills,” Bedwell says. “Just asking people how they see themselves and observing them when they are in everyday work situations is a great place to start.”

She says it is relatively easy to see who is not as competent a listener or talker on the team, and who has assertiveness issues or exhibits poor body language. With more senior staff members, she advises, observe how they handle conflict and solve problems that arise within the team.

“When observing staff members interacting, leaders absolutely cannot interrupt what is going on,” she says. “It’s natural to want to jump in, give advice, or sort out problems. But it will be much more useful in the long term to diagnose the issues and create a training program to address shortcomings.”

The CAE must create the right environment for positive change. “You are setting up expectations and creating a discussion on how to improve skills, so it is important to present it as a new initiative and as something vital to the success of the team,” Bedwell says. “You need to be clear that you do not expect everyone to be perfect, but like with any skill, practice can lead to improvements.”

While coaching can be effective, she says, people can also learn from their peers. Putting a good and poor communicator together can be useful. If there are people with excellent interpersonal skills, Bedwell says it may be worth making them champions and providing them with opportunities to demonstrate their skills. Role playing, practice, and feedback on areas of weakness can result in rapid improvement if the environment is supportive. “For this to really work, the CAE must create alignment between the development of interpersonal skills and the evaluation and reward systems in place,” she says. If those are correctly aligned, behaviors will continue to improve. If not, “that’s where most initiatives fail.”

Learn to Listen

“When CAEs are working to improve the communication skills of their team, they must remember that we don’t all communicate in the same way,” says Sarah Blackburn, vice chair and chair of the risk and assurance committee at NHS Digital in London, and past-president of the Chartered Institute of Internal Auditors. “We have to build something that is receptive and understanding of the way people prefer to contribute.” For example, she says, some people prefer to listen and digest information during a meeting, so the CAE needs to find different mechanisms — email or social media platforms — where team members can make their contributions in a way that suits them best.

She also says the CAE must set the tone and provide a model for the behavior he or she wants to promote by becoming as good at listening and communicating as possible. That involves reaching out to the business to ask for feedback on both his or her personal performance and on how well the team is doing.

“As an audit committee chair, I get a lot of feedback from management on audit work,” she says. Common complaints include auditors not listening, acting like the police, not taking the time to understand the business’ challenges, and writing reports about the audit process rather than focusing on what is valuable to management.

“A good CAE will take the opportunity to listen to the audit committee chair, management, and the external auditors,” she says. That kind of listening will pay massive dividends to the audit team’s ability to serve stakeholders well and communicate valuable insight to the top team, she adds.

Welcome Feedback

“A good indicator of the effectiveness of an audit function and its leadership is how good they are at getting feedback on their performance and having mechanisms in place to act on the results,” says Richard Gossage, managing director at the coaching and communications consultancy Copper Bottom Enterprises in Amersham, U.K. “CAEs should have networks of people such as the audit committee chair, the lead partner of the external audit firm, and others, who they recognize as giving accurate and objective feedback and be rotating around that group regularly.”

In accordance with the Standards, an external quality survey would provide good information on how internal audit’s communication is perceived.

Because the audit report is the function’s judgment on a particular issue communicated to management or the board, feedback on how well the information was gathered and the results communicated should be standard, he says. Quite often, good audit work and analysis can be ruined at the last moment by poorly written reports that fail to convey the relevance of audit findings to the intended audience.

“The fundamental cause of a lot of poor audit reporting is that the audit team can no longer see the forest for the trees,” Gossage says. “The report becomes a justification of the work that’s been done and the knowledge of the auditors, which is the symptom of a failure to understand your audience. Auditors fail to realize that the report is part of the ongoing dialogue with their audience.”

Gossage advises auditors to learn to see their reports as enabling tools for the business — not ends in themselves. That can require a shift in mindset and a willingness to try different types of communication. Being clear about the purpose of each communication and having a firm grasp of stakeholder expectations will make planning and delivering it much more effective, he says.

An Empowering Excercise

Developing sound interpersonal relationships is a difficult but crucial task for internal auditors. It can make the difference between effective and ineffective audits and audit teams. That is not something that should be left to chance — even though it often is. Building trust, demonstrating empathy, listening, seeking feedback within the team and among stakeholders, and acting to improve shortcomings are all important steps along the way. It may not be easy, but, as Gossage says, “it is a surprisingly empowering process.”

Arthur Piper
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About the Author



Arthur PiperArthur Piper<p>​Arthur Piper is a writer who specializes in corporate governance, internal audit, risk management, and technology.</p>


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