Dealing with Difficult Auditees
Qualifier – This does not mean that every audit will have
difficult auditees!!!
Difficult auditees just make audits more challenging.
Audience Poll
Has anyone ever dealt with a difficult auditee?
Who is the most difficult auditee?
Board Members? Chancellors? Presidents?
Vice Presidents? Directors? Faculty?
What about long term staff?
Former auditors?
Healthcare institutions…What about doctors or
other medical personnel?
Some potential characteristics of
difficult auditees
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Argumentative
Delay providing documents
Non responsive (email, voicemail)
Providing incorrect documentation or information
Make themselves unavailable for meetings
This audit is outside of the scope of your authority
Recommendations are outside of the scope of this audit
Auditee attempts to distract the auditor from focusing on a
specific area of the audit
• You are looking to get me fired
• Audits create extra workload
Some potential characteristics of
difficult auditees
• The timing of the audit is at the “worst time ever”
• Auditee answers a question with a question. Or provides very
short answers like Yes or No.
• Auditee attempts to overload you with information and
documentation.
• Personality clash (just don’t like auditors)
• Power clash (Administrators that believe they are “above it all”)
• Hard feelings and resentment due to prior audits and prior
audit recommendations.
• Intimidation
• Withhold information/documentation
• Yelling at you
Quotes
• "Hopefully the audit goes well b/c I can't
afford to lose my job"
• "Okay, who's job are you going to eliminate"
• "Is there a way to delay the audit until after I
receive my bonus?"
• “Why are you auditing us? We have never
had any problems in the past”
• “When will this be over, I really don’t have
time for this”
Some Reasons for Difficult Auditees
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Fear of change
Fear of “getting caught”
Fear of losing control
Fear of “looking bad” to superiors
Feel that the audit is a personal attack
Have an attitude that Auditors love finding things.
If they don’t find anything, they are not happy.
(We’re not happy, until you’re not happy)
Some Reasons for Difficult Auditees
• Audit is a waste of time and money.
• Auditor’s take up too much of management’s
time during the audit.
• Background noise. The auditee has issues
going on outside of the workplace.
• Allowing the auditee to continue the behavior
by not addressing it.
Sometimes We Create the Monster
• Setting unrealistic deadlines for audit
documentation and audit responses.
• Asking for information more than once.
• Have a “know it all” auditude.
• Being the “hammer”. (i.e. Auditing by the pound)
• Making recommendations without getting all the
facts and without obtaining management input.
• Allowing the auditee to continue the behavior by
not addressing it.
What can we do?
• Clearly explain the audit process from point to point in the
entrance meeting.
• Move the auditee to addressing the facts and focus on the
processes that are broken.
• Maintain your composure.
• Don’t get defensive, argumentative, emotional.
• Listen more than you talk; they have the information you need.
• Listen, don’t react. Understand where the auditee is coming from
before defending your own position.
• Always be respectful even if they are not.
• Communicate. Get issues into the open quickly. Avoid festering
and escalation.
• If you ever feel in danger, end the meeting immediately.
What can we do?
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Interpersonal skills are paramount.
Be positive
Be appreciative and respectful of the auditees time.
Be prepared ask open questions. Where auditees give
“yes/no” answers then frame your questions to start
with:
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How do you …..
Tell me …..
What does this …
Where can I find …..
Can you show me …
What can we do?
• Auditee says: Why did I get picked, why can’t you go audit someone else?
Explain the purpose of audit is to make their operation better,
not to put them in a negative spotlight. Could also discuss the
risk assessment process and how areas are selected for audit.
• Auditee says: You can’t perform the audit, or you can’t see those
documents, they are confidential”
Auditor access should be defined in the audit charter, if you don’t
have one or if its not in there, draft a charter with the scope of
authority included and get it approved by your board.
• Auditee says: So what will you be looking at/for?
Explain the overall audit objective that was included in the audit
notification.
What can we do?
• Auditor/Auditee Relationships matter. They
are built upon mutual respect, courtesy,
patience, and flexibility.
• Face time. Don’t treat every audit as a “desk
audit”
• Obtain feedback on every audit. Follow-up on
negative feedback and address it promptly.
• Remember…You can’t please everybody!
Traits of successful auditors
1. ethical, i.e. fair, truthful, sincere, honest and discreet.
2. open-minded, i.e. willing to consider alternative ideas or points of
view.
3. diplomatic, i.e. tactful in dealing with people.
4. versatile, i.e. adjusts readily to different situations.
5. tenacious, i.e. persistent, focused on achieving objectives.
6. decisive, i.e. reaches timely conclusions based on logical reasoning
and analysis.
7. self-reliant, i.e. acts and functions independently while interacting
effectively with others.
8. observant, i.e. actively aware of physical surroundings and
activities.
9. perceptive, i.e. instinctively aware of and able to understand
situations.
The 4 P’s of Dealing with a Difficult
Auditee
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Professionalism
Patience
Persistence
Personalization
Bring on the Panelist!
Toni Stephens
Toni Stephens, CPA, CIA, CRMA, is the UT Dallas
Institutional Chief Audit Executive for UT
System. She received her accounting degree
from Texas A&M University. Toni has almost
30 years of both internal and external audit
experience, including working for the Texas
State Auditor’s Office.
Charlie Hrncir
C.R. "Charlie" Hrncir has over thirty years of management and
supervisory experience as an internal and external auditor of
government institutions in Texas. Responsibilities include providing
leadership in helping manage the internal audit department for The
Texas A&M University System and managing audits with over 100
auditors in multiple locations across Texas while employed by the
Texas State Auditor’s Office. Possess a Bachelor of Business
Administration degree in Accounting from Texas A&M University.
Charlie is a Certified Public Accountant and a graduate of the
Governor's Executive Development Program. He has held
leadership positions with the local chapters of CPAs in Austin, and
Brazos County and chaired a conference committee for the Texas
State Society of CPAs. He has also served on the Board of Governors
for the Brazos Valley Chapter of the IIA and is a past president and
member of the board of TACUA.
Russ Hoskins
Russ Hoskens is the Director of the Internal Auditing
Department at the University of Houston System.
He has over 30 years of experience in internal
auditing, including 22 years of experience in
higher education. He is a Certified Public
Accountant, a Certified Internal Auditor, a
Certified Fraud Examiner, and a Certified
Information Systems Auditor. In addition, he
received a MBA degree from Louisiana State
University with a concentration in Internal
Auditing in 1992 and is a Past-President of
TACUA.
Steve McGee
Steve holds a BBA in Accounting from Southwest Texas
State University and he is a CPA, CIA, and CFE. He has
been auditing for over 33 years, including 10 years in
the healthcare industry and 23+ years in Texas state
government. Steve’s state experience includes working
at the Texas State Auditor’s Office, Stephen F. Austin
State University, and Texas State University. Steve is
and has been a member of the Institute of Internal
Auditors and the Association of Certified Fraud
Examiners. He has previously served on the TACUA
board, holding each officer position and was the
President of TACUA in 2000.
Panel Discussion!