In hindsight, I suppose we should have anticipated that an article about the career skills and needs of internal auditors would get heightened scrutiny. That is, after all, what internal auditors do: pay close attention to statements others make.
Nevertheless, Compliance Week boldly ventured forth last week with an article on that subject, “Studies Find Internal Audit Lacking in Leadership Skills.” We stirred up quite the storm both with that headline and the article itself. Complaints came in, critics fired away via tweet and blog post, and the internal auditing listserv run by the esteemed Dan Swanson buzzed most of last week picking apart what Compliance Week said and whether we were accurate. Let me address that controversy last week in my column this week.
A typical complaint came from Carol Welch, vice president of corporate audit at Nike. An excerpt of her letter to me:
[Your article] is a gross mischaracterization of the studies cited and a significant disservice to the internal audit profession overall, both in the headline of the article and the sound-bite statements included in the body of the text … I certainly reflected that as we consider the increasing complexity of our business environment, the skill sets we require will need to evolve, develop, change over the coming few years. However, these skill set developments will also be required across the business landscape. It does not imply that skills are significantly lacking currently, nor have forward-thinking audit leadership had their heads down, ticking and tying SOX work for the past six years with their critical thinking skills stagnating as depicted in the article. What an extreme stereotype to perpetuate in a professional publication.
Norman Marks of SAP, one of the best internal audit evangelists out there, sent me a note describing our article as “an inaccurate and unfair slant. It came across as a slam against CAEs as lacking in these skills.” Richard Martin, an internal auditor in Texas who goes by @auditbiker on Twitter, raised the valid point that one of the studies, published by PwC, should be viewed skeptically since PwC has an incentive to sell its services to internal auditors worried that their talent pool may be inadequate. Even Richard Chambers, chief executive of the Institute of Internal Auditors and someone we interviewed for the article, succinctly noted: “I think we can agree that the title of the article left a lot to be desired.”
Well, let it never be said that Compliance Week is afraid to stand out there in the rough winds of public opinion, nor that we don't take criticism constructively.
Clearly the verb “lack” in our headline and introductory paragraph left lots of internal auditors unhappy. The honest answer—which will satisfy nobody outside of the news business—is that we chose that word because it fit the allotted space. Ideally we should have used something like “must focus more” or “must improve” or any number of other phrases that don't carry the same negative connotations as “lack.” We didn't. For the record, I don't believe people should assume that negative connotation; we merely intended to say that auditors should have a certain amount of leadership and other communication skills, and they don't have that amount yet. That is what “lack” means. But I can see how readers might infer those negative connotations anyway, which many did.
That choice of headline then gave rise to the other common complaint, that we were depicting internal auditors as social misfits, who excel at ticking the boxes of internal control audits but fail at the more interpersonal challenge of making internal audit departments matter. This is a more nuanced complaint, and therefore—to test our communication skills, as it were—I want to give a more nuanced answer.
Not for one moment do I believe that chief audit executives lack leadership or communication skills—but that's why they are the chiefs of their teams. They've already demonstrated the knack for managing people, and for navigating the often difficult shoals of corporate operations at a high level. CAEs were the people who participated in these studies, so I understand why they might read an article about internal auditors needing to improve their people skills and instinctively think, “That's not me; I've been working and politicking and exerting influence at this company to help my department for years!”
Still, these studies (one from PwC, the other from the IIA) were clearly meant to capture the state of internal auditors' skills as a whole. That group includes many people who are not chiefs of anything, some because they are new to internal auditing, others because they are not good at being leaders. I've always interpreted phrases such as “people skills” and “understanding the business” to encompass the challenges those people face as well. Does your 27-year-old junior auditor know the pressures a 44-year-old sales executive with two children and a job in jeopardy might face? Does your 56-year-old career IT auditor understand how 22-year-olds in the warehouse use cloud computing applications on their smart-phones?
Perhaps they do. But frankly, I suspect that many lower-level internal auditors do need improvement in the technology and people skills necessary to master those situations. Chief audit executives need technology and people skills, too, but they face very different situations: how to sit in a boardroom with the CIO and the CFO, for example, mapping out strategy for a new enterprise software implementation so it won't increase your risk of fraud. Those people are on the CAE's side; they are his or her equals.
When we talk about a profession as varied as internal audit, however, we're talking about a wide range of people, encountering many different situations that require many different skills—and it's not unreasonable to say the profession as a whole still needs to work at meeting all of those challenges. I regret that Compliance Week didn't make that point as clearly as we could. But the point is one we all should respect, because it isn't going away any time soon.