Association of Local Government Auditors

When I audit, generally I think about the values and interests of four broad groups of stakeholders: the public, elected officials, the agency, and other professional auditors. As you work on the audit, ask yourself about the expectations of these distinct groups. But also realize that value is not just a measure, but also has qualitative aspects.

Connecting with the public

To know us is to love us auditors, right? But we can get only a tenuous and fleeting moment of the public's attention, and that depends upon a communications channel controlled by others.

Getting the public's attention is an uphill struggle because the public can be too encumbered by the auditor stereotype to understand what we really do. In the public's mind, auditors are obsessive/compulsives who should be kept at a distance but are good for tormenting others with prolonged, excruciating inquisitions. Sadly, they often have the same general feelings about reading audit reports.

If they won't read our audit reports then we need to rely upon reporters to get the audit results to the public. (Seriously, if they won't read our audits, do you think they will visit our website?) But watch the news and you'll see that the story is usually about conflict, corruption, or chaos, and a good audit achieves change without bloodshed.

Yet, if the audit matters to them, public interest can overcome its lack of drama. Audits that have a direct impact on services to the public are valued most. That decision starts with the audit planning, not in the writing. When you choose to develop a finding with an effect that the public understands, you'll be most valued.

Does your audit directly address the agency's mission, or is the topic buried deep in the back office functions? Does it show how to save money, improve the quality of services, or make them more timely? The "So What?" should be meaningful to the public. Sorry, but don't expect reporters to clamor to cover findings about segregation of duties. "What if?" just doesn't attract as much interest.

What do elected officials want?

Elected officials want auditors to answer questions and solve problems, which sounds simple enough. Audits may generally satisfy the requests of elected officials, but each of them will discover that sometimes our work doesn't answer their question, or answer it the way they expected. That's the risk of fact-based analysis. Evidence may be unavailable to substantiate the opinions expressed by public officials, or the evidence may even contradict them.

Here are some of the things that elected officials are looking for from auditors:

• explanations of how things work, and how much they cost
• objective answers to contentious issues
• holding malefactors accountable
• solutions to constituent problems
• improvements in efficiency/effectiveness
• risk reduction

For some of you, I may have left major aspects of your work out of this discussion. Sadly, elected officials rarely read their government's audited financial statements, though they appreciate what it brings: the ability to receive federal funding and the ability to borrow. Or if you're an internal auditor, your work may never reach elected officials, so they wouldn't be in a position to appreciate it.

Interests of agencies

For all types of auditors, I believe our greatest value is in making deep and lasting changes to agencies. Our audit efforts can improve accountability and management, which produces value for the agencies but also for the public, elected officials, and our peers. Unfortunately, the measure of lasting improvement is very difficult to link directly with an audit, but that is the difference between the deep and the superficial.

In performance auditing, the audit report is only the tip of the iceberg. The real value is not found in the report but in the process of engaging with agency personnel, asking questions, assembling evidence, and communicating our results in a way that persuades them to make fundamental changes in their activities, perspective, and future decision-making. If we can solve a major problem for them, then everybody wins.

In telling agency personnel how to fix something, it is also important to show them how to become an organization that learns and fixes itself. I described organizational maturity in a previous column ("Risk: Part 2" from Fall 2010); we should be thinking from that longer-term perspective when we approach each audit.

The greatest value an auditor can provide is showing organizations how they can be better. That is not an easy task, but if we expect more from other organizations, we should not be satisfied with an audit that offers only simple fixes to simple problems. Every auditor needs to be asking: what is the biggest problem in this organization that we can help solve? When we take on difficult challenges as auditors, we lead agencies by example, and earn their respect.

Peer auditors

Being a professional means we care what other professionals would say about our work. We all have a stake in quality work. Look what the questionable practices in the private sector did to auditing: Enron and Arthur Anderson and many others instigated Sarbanes-Oxley and new independence standards. Besides the public mortification of error, training, peer reviews, auditing awards are some of the ways that we set professional norms for each other.

I willingly admit that I try to imagine what a handful of auditors would do in everyday as well as challenging situations. There have been occasions when I actually called them to ask their advice. (It's a wonderful experience if you haven't tried it.) The great thing about auditors is that you don't even have to ask for "advice" because wisdom and recommendations are so forthcoming from us all! Thinking ahead is an important characteristic of good auditors and when you are traveling unknown territory, it helps to have the advice of others who may have tramped similar terrain.

Explicit indicators

One of the great things about measures is that they are a common language for many of these audiences. One of the bad things about measures is that don't capture all the factors of good auditing. How do we measure the will to ask blunt questions and speak the unspeakable? How do we measure smart analysis or public credibility?

I believe that metrics (percent of recommendations implemented, financial benefit of recommendations, etc.) enrich the vocabulary and credibility of our narratives about the value of auditing, but are not sufficient in themselves. Some qualitative information is just as critical. If we help an organization mature, we are unlikely to prove it, but it is probably the most valuable result of the audit. When we get requests from agencies to come and audit them, it is a mark of our value, but that does not necessarily make a good measure. The ability to sort out complex issues, the richness of our analytical powers, and the clarity of our explanations  are all valued. Another measure is "buzz": the editorials, the job applicants from people who read about our work and want to join the profession, the  promotion of audits by others, and the respect that auditors and their work receive. You know when it happens and feel encouraged, which can't be measured either.

Lastly, the maturity of your own audit organization is an immeasurable element of the institution of auditing. Can it sustain its performance and become better? Is the organization producing great auditors who can bring innovation and insight into the collective effort in every audit? For all of those stakeholders, though they may only indirectly realize it, this could be the most important value we can achieve.