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The Conditions in Which You Think​​

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Last Friday, I threw out a few simple (but tricky) questions/puzzles to show just how easy it is for all of us to fall into the trap of thinking too quickly — that is, how we rely on fast thinking at the expense of the more accurate results slow thinking will give us.

Those terms, fast and slow thinking, come from the book Thinking, Fast and Slow by Daniel Kahneman (as were the examples). And one of the points was that, while there is nothing wrong with fast thinking (without it, every decision, every action, everything we do would be bogged down in meaningless analysis) we have to be cognizant of when we are using fast thinking at the expense of coming up with answers that are more correct.

I then made the point that it is easy for internal auditors to fall into the trap of fast thinking when audit fatigue begins to take its toll. The perfect example is during interviews. Active listening takes hard work. And a lot of interviews in a row means a lot of hard work in a row. And, when fatigue and redundancy take their toll, we begin to lose focus and fall back on fast and "lazy" thinking.

You don't think it can happen to us? Trust me, it happens to everyone, and in situations with a greater impact than most anything we face in internal audit.

In his book, Kahneman cites a disturbing study reported in the Proceedings of the National Academy of Sciences.

The unwitting participants in the study were eight parole judges in Israel. They spend entire days reviewing applications for parole. The cases are presented in random order, and the judges spend little time on each one, an average of 6 minutes. (The default decision is denial of parole; only 35% of requests are approved. The exact time of each decision is recorded, and the times of the judges' three food breaks — morning break, lunch, and afternoon break — during the day are recorded as well.) The authors of the study plotted the proportion of approved requests against the time since the last food break. The proportion spikes after each meal, when about 65% of requests are granted. During the two hours or so until the judges' next feeding, the approval rate drops steadily, to about zero just before the meal. As you might expect, this is an unwelcome result and the authors carefully checked many alternative explanations. The best possible account of the data provides bad news: tired and hungry judges tend to fall back on the easier default position of denying requests for parole. Both fatigue and hunger probably play a role.

Think again about the work you are doing. What is your schedule like? Are you taking the breaks you need? How is your work affected by the time of day, the situations, the emotional constraints? How good an interviewer are you when you haven't had lunch? Are you able to be engaged — are you purposely thinking? Or, are you just falling into a default mode — expecting and acting on the quick easy answers that match your preconceived notions? And, even if you cannot change situations (take a break, wait until after lunch, etc.) do you recognize your shortcomings and actively internalize the need to concentrate — to not fall into default, lazy thinking?

Of course, all of this is just as true for every step in the internal audit process. (Seriously, how good a report can you write at the end of the day when all you can think about is traffic, dinner, and the new Dr. Who?)

And this is where another important part of the internal audit process kicks in. I am not a great fan of all the reviews that we require of all the workpapers (including the review of the reviewer who reviewed the review.) But this is where a reviewer — one who is thinking about more than just the workpapers; one who is thinking about what was occurring when the work was being completed — can provide true value. The reviewer should be asking, "When was this work completed?," "What stresses was the auditor under when making these decisions?," and "Do any of those warrant a closer review to ensure that quick, easy answers were accepted when something with a little more depth was required?"

Again, the important part is not to eradicate fast thinking. As noted, fast thinking allows us to get through the day and through a lot of the more tedious aspects of internal audit processes. No, the important point is merely to recognize when fast or "lazy" thinking is occurring and determine when something more is needed.

And one other important note about all this. We are talking about something fundamental to one of the skills CAEs universally desire from internal auditors — critical thinking. And, as shown in the preceding, the answer to getting good, quality,​ critical thinking is actually kind of easy. Just stop…and think.

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