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The Exit Club November 6, 2014

Posted by Audit Monkey in The Joy & Pain of Internal Audit, Working Life in Britain.
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As my readers will know, in the audit world we get to visit an awful lot of firms and meet an awful lot of people. What is always striking is the level competence. Often you met alot of incompetent people who are responsibile managing large teams of people. Errors occur, the baton is dropped but still, the incompetent seem to muddle through. They play the office politics and hook and by crook they survive.

This is slightly frustrating as an Auditor, because you’re often better qualified than the people you are auditing but they are often better paid and respected. I often lament that I can not make the transition from Auditor to a nice cosy office job in Finance and get to play with spreadsheets or shout “where’s my P&L?” to my minions.

Moreover, you issue an Audit Report and it details in glorious detail how bad the processes are and by implication, how imcompetent the managers are. Yet, even though the report spells this out, the incompetent managers survive; no sanction is brought to bear and life goes on.

Anyway, I was recently invited by the audit sponsor to review the financial and operational controls of a Business Unit. The sponsor of the audit was alledging all sorts of mismanagement by the Business Head and wanted me to go for the jugular. However, when it comes down to it, you can only go with the audit evidence; if there’s errors, there’s errors. If there’s no errors, there’s no errors. Contrary to popular belief, you can’t make it up. So while there was mismanagement, there wasn’t copious amounts of evidence suggesting the Business Head was incompetent and committed naughties such as fraud. This said, your average fraudster isn’t going to say “Oi! Auditor! Over here, here’s the fraud! We’re just nicking the cash and other business assets”.  The Business Head had embarked on some reckless activity and losses were stacking up but was it a hanging jury, probably not.

However, imagine my surprise when I telephoned the audit sponsor to hear the news that the Business Head had resigned. I was speechless. At long last, on receipt of an Audit Report detailing the overspends, the losses and the lack of control, they’ed walked. There was no faffing about discussing whether the control weaknesses and losses were isolated incidents, whether it was due to lack of staff, the lack of training, lack of the other, they’ed walked. And damn, it felt good.

 

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Comments»

1. ITauditSecurity - November 7, 2014

AM,
One of your better posts! Once in a while, we win one. Keep plugging away.

I hear you on incompetence. Drives me crazy. So many people manage the perception people have of them instead of the work they are responsible for. That’s how they get by. Somehow, they convince people they are not only competent, but excellent.

I’ve found in some companies, management just doesn’t want to manage, so as long as everyone’s happy and no one complains too loudly, those folks survive in spite of their incompetence.

As soon as a manager holds someone acccountable, the director hold that manager accountable, the VP the director, and the EVP the VP. Eveyone gets burned and no one gets a big bonus.

So they look out the window instead and keep smiling.

2. ITauditSecurity - November 8, 2014

What’s with the new image? Are you going into IT audit?
🙂

3. Audit Monkey - November 9, 2014

The buzz I got from this event was incredible. Earlier in my career I had considered law but thought I’d end up working in the CPS [District Attorney] and end up prosecuting some very disagreeable people. However, given the feeling I got from this episode, I wish I’d stuck with it. As for IT audit…

4. allanmisner - November 11, 2014

I’ve met several auditors that have gone through what you did. The reality is the individual who left is not a yes man. He may very well be replaced by a worst manager. The better approach is to win hearts and minds and get the poor performing groups to step up. That’s what I call a win.

5. ITauditSecurity - November 18, 2014

Hey AM,
In case you missed it, I mentioned you on my blog again. You might get a chuckle. Didn’t steal any ideas from you this time…

Either way, if you’re getting a couple extra hits these days, it’s probably coming from my latest post.

Cheers.

6. Audit Monkey - November 22, 2014

allanmisner – on this occasion, the manager who walked was responsible for racking up losses and wasn’t a maverick who was pushing the boundaries to obtain competitive advantage, greater market share, etc.

ITauditSecurity – I’ve seen the post. I will comment in my own inimitable style shortly.

ITauditSecurity - November 28, 2014

Super.. Can’t wait.


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