The terms “audit” or “program evaluation” do not immediately evoke a sense of welcome and delight from the subjects of the assignment. Either because of past experiences, newspaper headlines, or urban legend, audit groups are often met with fear, anxiety, dread, or hostility. We can’t change those impressions brought about from “gotcha” auditing—whereby auditors look for the headline findings, hold out conveying results to the end, or dismiss factors of pertinent context or alternative perspectives—such tactics make us all look bad. We can, however, ensure that our audit, evaluation, and consulting groups regardless of focus or structure, conduct our work and deliver our results professionally and civilly, while still proving impactful and useful to our leaders and our auditees.
In general, whether the audit, evaluation, or consulting group, firm, or organization (“consulting group”) is internal or external, public or private, serving government or business and industry, the goals of their efforts are typically similar: to evaluate operations or programs and provide leaders with independent, objective, fact-based assessments coupled with practical, actionable, and insightful recommendations and solutions. We seek to provide clarity and vision into program and business activities, improve or strengthen operations, identify and test controls to reduce enterprise risk, deliver evidence and support to stimulate dialogue and constructive change, and offer solutions and alternatives to assist future decisions.
Successful consulting groups possess similar characteristics: strong leadership and governance; solid foundations in standards and best practices; structured approaches and processes that are not rigid or prescribed; professionally curious, well trained, and objective staff; and a relentless system of quality control.
Tone at the Top Sets the Bar
In some form or fashion, every consulting group has top leadership, be it the Chief Audit Executive (CAE) for an internal audit group; legislative, state, or entity auditor for government external audit groups; or executive leadership for private firms. This leadership must instill, marshal, and ensure the integrity, efficiency, and effectiveness of the audit/evaluation/consulting activities. While we usually pen “tone at the top” when referring to senior executives in terms of corporate ethics and compliance programs, tone at the top cannot be underestimated for the success of the consulting group. Leadership sets the bar, guiding values, and climate for the consulting group and must lead by example.
What is setting the bar for the group? Executive attitude permeates the organization—leadership that consistently demonstrates the highest ethical values, accountability, and reliability will engender those characteristics from the audit team and set these values as the organizational standard. The official tone should demand honesty and accuracy but also encourage participation and openness, listening to and considering all points of view and ideas from many sources. Demonstrating high levels of competence, commitment, inclusion, and audit team support will garner trust and loyalty and encourage staff to grow in their professional capacities, practice diligence, be team players, and deliver high quality work products. In turn, the consultants will practice these values during the audit and result in high quality projects and auditees who feel they have been fairly treated.
Foundations in Standards and Best Practices
Many of these groups practice not only performance or internal audits but also consulting engagements. The U.S. Comptroller General promulgates Government Auditing Standards (GAGAS or Yellow Book) for government sector audit work and differentiates “non-audit” work for purposes of auditor independence and conflict of interest. Conversely, the International Standards for the Professional Practice of Internal Auditing, through the Institute of Internal Auditors, that are followed by many in both public and private sector internal audit shops include parameters and guidance for conducting non-audit and consulting services. Strong consulting groups build their activities around the tenets of these standards, whether required or not. These standards suggest considering the ideas of efficiency, effectiveness, economy, equality, and ethics when establishing the scope and objectives of engagements and set out guidance for designing the work to be performed.
The guidance and practices prescribed in audit standards are valuable in conducting a variety of engagements and provide a framework for defendable and complete work. For example, performance audit fieldwork standards under the Yellow Book include guidelines for areas such as understanding the program or activity, risk and internal control factors, criteria, and evidence. Applying the intent if not the form of this guidance to non-audit activities can provide structure, strength, and convincingness to the ultimate product. Depending upon the scope and nature of the assignment, alternative standards or criteria may we warranted and industry standards or best practices may add the measures and benchmarks that support and provide credibility to work.
Audit and Consulting Teams Need Rules
We do not subscribe to cookie cutter or template approaches to audits and consulting engagements as each engagement in the performance audit and consulting world is unique and infrequently done the same twice. This does not mean however, that audit and consulting groups work without structure or operational guidelines. Audit and consulting entities, public and private, should have charters or comprehensive manuals that set forth work expectations, behavioral policies, and clear operational parameters for conducting each type of work the organization undertakes.
As engagements vary widely, engagement leaders need the flexibility to design tasks to bring the greatest value out of the audit, evaluation, or consulting investment. Operational parameters need not be rigid or prescribed to set forth the framework for conducting assignments from initiation and planning through reporting. They should, however, include guidance requiring leadership involvement, supervision and review, budgets and timelines, milestones and progress, levels and types of evidence, and workpaper components and style. Establishing and following key steps and milestones such as set periodic all team member meetings, task budgets and deadlines, budget to actual analyses will define expectations, manage progress and costs, and keep the team focused on the objectives of the assignment.
Outstanding Staff are Typically Grown not Bought
Okay, admittedly salaries are important to people, but job satisfaction, mutual respect, and continual opportunities goes a long way to building and retaining a competent cadre of consulting staff. It is very difficult to find journey-level staff that can step into this line of work. In fact, our firm and many of our program evaluation-centric clients have had little success in on-boarding staff at the mid-level as few people working outside the performance audit and consulting discipline possess the skills and experience needed to quickly learn a new program or activity, develop evaluative tasks, and assimilate diverse factors into conclusions and recommendations that can be reasonably put into action. Professionally curious entry-level individuals showing strong analytical and writing skills prove the best candidates and can learn how to identify and apply evaluative criteria, conduct listening interviews and know to ask the next and more probing question, recognize the appropriate evidence to support a conclusion, and see the big, often cross-cutting picture, as well as the detail of a specific task.
Growing talented staff requires organizational commitment that entails a mix of formal training, both from external and internal sources, one-on-one mentoring and supervision, and assignments providing a broad range of experience and exposure along with incentives to attain relevant professional certifications and credentials. Such opportunities should be combined with demonstrated core values of integrity, balance and fairness in the work and toward auditees, personal accountability, objectivity, accuracy, and an environment of risk-free questions and participation.
Relentless System of Quality Control
Both internal and Yellow Book audit standards require systems of quality control and prescribe the required elements to comply with those guidelines. While not all organizations choose or are mandated to follow standards, these requirements are valuable tools to instill an attitude and structure for quality assurance. Such rules, set by internal policy or otherwise, should be designed to assure accuracy and rigor and be formally structured, communicated, and consistently followed. Management and staff should embrace these rules as means to assure top-quality products and not simply a safety-net for catching sloppy work. Quality control must begin with the first write-up and be an integral part of every aspect of each engagement, regardless of the type of work performed. An organization’s reputation is hard earned and could be quickly lost when the control system breaks down.
A key aspect of a relentless system of quality control includes the active participation of executives in the project process. The most common weakness we see in consulting groups is the disengagement of the executive teams from the projects, frequently coming in only at the end and asking pertinent and important questions after the work is done. Leveraging executive experience and knowledge throughout the process, such as at key junctures, allows the benefit of their expertise but also provides opportunities for their buy-in to decisions on a real time basis rather than after the work is done.