Soft skills such as effective communication, persuasion, collaboration, and critical thinking are essential competencies of internal auditors. Armed with these competencies, internal auditors can better respond to the demands of the profession, strengthen business relationships, and contribute to audit engagement effectiveness. While soft skills are always needed, they may be even more crucial during times of uncertainty and change. In fact, the COVID-19 pandemic has accentuated the importance of soft skills and why internal auditors should use them to solidify their role as trusted advisors in organizations.
Worldwide, internal auditors have had to adjust to an increasingly challenging business environment, with the global pandemic significantly impacting the way they perform their duties. In particular, remote auditing has changed internal audit engagement dynamics because it limits face-to-face contact and physical observations. As a result, collaboration and effective communication with audit stakeholders is more complicated, requiring flexibility, teamwork, and empathy on the part of internal auditors.
As the pandemic continues, employee agility, operational resilience, technological innovation, and (in some cases) continued remote operations will be essential for survival, requiring professionals to adapt. It will require enhanced skills and strategic thinking.
For internal auditors, soft skills are highly relevant to the job — and to becoming a trusted partner, especially in times of uncertainty. Whether these skills come more naturally or require more practice, it is possible for auditors to strengthen such skills to better respond to crisis situations. With experience, practitioners can learn to adopt best practices for effective communication, persuasion, collaboration, and critical thinking that positively influence audit engagements.
Audit With Empathy
Audit clients may show higher levels of stress, anxiety, and frustration due to the loss of key personnel, business interruptions, and the impact of closed borders during the pandemic. Many colleagues also have experienced varying degrees of trauma and loss, both in the workplace and in their personal lives. Internal auditors should understand that clients may feel that this is the worst possible time for an audit.
When conducting an audit or an advisory review, internal auditors should reassure audit clients that they will make every reasonable effort not to interrupt the operations by working to reduce requirements for stakeholder involvement. Internal auditors should emphasize that they are there as a safety net during the crisis, and that their role is to add value rather than identify mistakes or find fault. Throughout the engagement, internal auditors should perform their work with empathy and consider the audit client's current situation.
My Research on Soft Skills in Internal Audit
The relationship between soft skills and effective internal audit client engagements is corroborated by a study I conducted in Macao for my Master of Business Administration dissertation at Oxford Brookes University. My research, which took place in 2020, reveals that the soft skills of internal auditors may need to evolve to reinforce internal audit as a trusted partner in times of crisis.
In the study, internal audit experts across sectors suggest that the pandemic has impacted their relationships with audit clients. For instance, the study participants say audit clients are now more focused on their departmental priorities and are dealing with increased pressures. At the same time, they are more sensitive and afraid of the consequences of reportable audit findings, and internal auditors struggle to find ways to collaborate and demonstrate their relevance. In fact, audit clients seem less accepting of internal audit when compared to the past and exhibit a more defensive attitude. Consequently, audit clients may be less willing to share critical information relevant to the audit and less willing to accept audit recommendations.
My research has uncovered a range of best practices to enhance soft skills such as effective communication, persuasion, collaboration, and critical thinking — competencies that would help internal auditors be more effective advisors in times of uncertainty.
Communicate Effectively During a Crisis
In times of uncertainty, communication needs to be simple, concise, proactive, continuous, and timely. This promotes alignment with the business and the changing operating environment, and allows audit stakeholders to make timely decisions and improvements to their business units. Further, soliciting regular feedback from all stakeholders, especially remote ones, is essential to ease their stress and address their concerns during the crisis.
To deliver a compelling message, it's also important to adjust the communication style based on the client's cultural background. Situations of uncertainty created by a crisis can be perceived differently across contexts and cultures. For example, individuals who feel threatened by the unknown may show less flexibility to make changes when faced with unpredictable situations because of their cultural background and inherent social values.
Further, auditors should always listen to undertone. With listening skills, it is often not about what the audit client says; it is about what is not said. Listening to the client's tone and speed of speaking could help auditors extract critical information, for example.
Effective persuasion relies on the internal auditor's ability to convey a compelling and concise message, supported by audit facts. Practitioners should use persuasion to present audit issues as opportunities for improvement and better operational efficiency, and never as mistakes or fault. Persuasion skills could also be used to bridge gaps and achieve consensus between internal auditors and clients.
Methods and lines of communication should be varied to promote flexibility and efficacy in auditing. For example, audit teams may need to substitute face-to-face meetings with email and video conferences if workers are remote. However, when face-to-face contact is limited, it may affect the dynamic of audit engagements. That is because internal auditors may miss important nonverbal cues that they would have noticed in a face-to-face meeting.
Stay Relevant and Collaborate Meaningfully
During a crisis, collaboration can seem more challenging because audit clients worry about the outcome of the audit report, costs, their own jobs, and the business — all while struggling to keep up with many other priorities. Internal auditors need to make a greater effort to engage with audit stakeholders, continuing to develop strong relationships with clients around trust, credibility, efficiency, and transparency. Persuasion is critical to effective communication, particularly when auditors are negotiating recommendations for better governance, but persuasion may not be possible without trust.
Because there is an increased need during a crisis to provide management with operational, regulatory, and performance enhancement audit reviews to help with decision-making and governance, internal audit should collaborate with management to identify gaps in controls. Internal auditors should continuously provide independent assurance and advice on the operations and the effectiveness of risk monitoring during and after the crisis. Another way to collaborate is to offer business leaders benchmarking statistics and comparative analyses to boost confidence in decision-making during the crisis.
Turbulent times call for flexibility and teamwork. With so many processes and systems in flux, it won't always make sense to stick to audit plans and schedules that were developed months earlier. And it won't always make sense to use traditional audit techniques that look for errors in past transactions.
Instead, internal auditors should take a step back and reevaluate their audit focus and its relevance to the crisis. They should evaluate priorities and offer shorter and more collaborative audit engagements to enable rapid corrective actions, while focusing on what is essential to the organization's survival. For example, compliance with governmental and regulatory requirements should be a top priority.
Successful collaboration relies on internal audit's ability to understand the challenges and needs at the organization level. Collaboration needs to be relevant to add real value to audit stakeholders — therefore, internal audit should be evaluating the organization's priorities and identifying its most significant risks.
|World Economic Forum Report Tracks High Demand for Soft Skills|
The global pandemic has placed new demands on the competencies of internal auditors, not the least of which are skills relating to adaptability and communication. These competencies were already on the radar of employers and managers leading up to the pandemic. In the World Economic Forum's Future of Jobs Report 2020, the skills for which demand is increasing the most among business leaders include areas that largely deal with soft skills, such as:
- Critical thinking and analysis.
- Problem solving.
- Working with people.
- Management and communication of activities.
The IIA's Internal Audit Competency Framework, updated in 2020, is meant to help internal auditors and audit functions assess their strengths and weaknesses in competencies related to the profession. The framework is broken into four knowledge areas, including environment, leadership and communication, performance, and professionalism, with three competency levels that progress from general awareness, to applied knowledge, to expert practitioner.
Boost Critical Thinking
Critical thinking is essential to identifying the most significant risks threatening an organization and to finding opportunities to maintain effective governance during a crisis. This involves evaluating a situation from different angles and questioning assumptions that might appear to be normal. Changes in the business environment, operations, regulations, and the economy demand that internal auditors employ an inquisitive mindset, challenging all types of new information, while never taking things at face value.
Internal auditors who demonstrate excellent critical thinking skills will have a sense of purpose and a genuine interest in asking the "why" questions to continuously search for knowledge. They also may have an ability to analyze people's emotions, enabling them to ask appropriate questions and read body language and other nonverbal cues. In fact, the emotional acuity of internal auditors is invaluable during the audit process; if practitioners can't understand the emotions of their audit clients, they can't get their point across.
Good critical thinking contributes to audit engagement effectiveness, together with confidence, courage, and the ability to articulate information — while looking at situations in an unbiased manner to avoid making assumptions or distorting facts. This mindset helps auditors avoid mechanical, reactionary, or meaningless results or actions.
Learn From the Pandemic
There are many lessons internal audit professionals can learn from the pandemic to move forward as trusted advisors within their organizations. Times of uncertainty call for a sense of urgency and a focus on developing audit competencies and skills. New work approaches can provide meaningful support to audit clients, management, board members, and audit committees — and ultimately, help internal auditors to stay relevant during the crisis.
In difficult times, being a trusted advisor means more than simply giving management an opinion — it means identifying the challenges facing organizations, providing active collaboration and assistance, ensuring compliance, and monitoring risk exposure. It also means internal auditors must use soft skills to gain trust, provide reassurance, communicate frequently and effectively, and read between the lines.
The best results come from critical thinkers who can deliver on both the technical and emotional spectrums — where being analytical forms the basis of the thought process, yet a persuasive appeal helps successfully deliver the message.