Elephants in the Audit Room
Elephants in the Audit Room - whatever next?
'Elephant in the room' is an English metaphorical idiom for an obvious truth that is either being ignored or going unaddressed. The idiomatic expression also applies to an obvious problem or risk no one wants to discuss. Wikipedia.
You are an open, honest, skilled professional. As an auditor, you are all about sniffing out fault lines, evaluating risk and exposing the incomplete. You invest in CPD to mitigate against your blind spots and due diligence is a given in all aspects of your life. Who else, but the professional auditor could possibly be any more risk circumspect? But you are also human and when an elephant takes root in your room - the whole point is - you, of all people will know it's there. You may be adept at tackling other people's elephants but what about your own?
The metaphorical elephant lurks, ubiquitous...
You won't all agree but some might say, of the metaphorical elephant:
- In Formula One, it's the recovery of Michael Schumacher;
- In Scottish Independence, its Northern Ireland;
- While in the world of the UK media, it's the absence of adequate plurality of media ownership
And that's before we even start scratching the surface of global socio-politics!
As for audit, well elephants are equally pervasive; just Google 'elephant in the room and auditing' and I think you will be as astonished as I was. Just reflect for a moment on your own world. Think hard about your current job or project and ask yourself what you are, consciously or unconsciously, but rather conveniently, ignoring?
Auditors are human too!
Before you start to feel too bad about your personal elephants, it's worth considering why we do what we do. One way of explaining it is through NLP, which asserts that our five senses are bombarded with around two million bits of incoming information, per second! Thankfully, we have our unconscious to protect our conscious mind from imploding! While the conscious mind can only cope with seven (+/-2) chunks of information at a time, that's around 134 bits, the unconscious mind is operating a series of filters to bring this onslaught down to a manageable level. These internal filters use deletion, distortion and generalization to process the deluge of information that is constantly flooding our brains through our five senses.
Deleting, distorting, generalising
It all sounds a bit dubious for a professional auditor, honed to take an objective stance and employ analytical and evaluation skills, but deleting, distorting and generalising are essential mental processes. Between them, they enable us to sift out the information most relevant to do our jobs and live our lives.
Deletion or selective attention occurs when we discriminately pay attention to certain aspects of our experience over others. In auditing, this might masquerade as materiality; we know from prior experience and honed judgement, where the riskiest areas reside. But deletion is also in play when we are evading that elephant in the room.
Distortion can be deliberate or unconscious and it refers to our interpretation of information. We need to be able to distort past experience to imagine or construct the future; it is essential for planning or to describe our audit objective and it also gives us the ability to look at different perspectives. On the downside though, it can lead to misrepresentation of reality, twisting the truth or the facts to fit our conclusions or assumptions, whether deliberately or unwittingly.
Generalisations allow us to draw broad conclusions from actual experience. We might, for instance, have learnt from practice that certain generic systems or processes can be relied on, so we use generalisation to apply this learning to future situations. But generalisations can be too broad and without active and ongoing challenge can miss nuance and, over time, be based on faulty assumptions.
So how do humans make good auditors?
Well, first we accept our fallibilities as humans; we have limited brain power so we have to rely on our internal processes and filters to cope with the sheer deluge of information. Once we acknowledge this fallibility, we can raise our own awareness as to where our personal processes might be at risk. We can start to actively recognise our own filters and look for ways to mitigate blind spots. Auditing is rarely a solo occupation; as we all delete, distort, and generalize all this incoming data in different ways, team work is vital to raise our awareness of what we might be missing.
But aren't elephants the obvious, if unmentionable? Yes probably, at a subconscious level, they are. But deleting, distorting and generalising are our weaponry at keeping them at bay and out of our conscious awareness. Conscious or unconscious - don't let your elephants go unaddressed. Ask yourself now, what is the awkward, uncomfortable, messy or unpleasant issue that you know is there but you are conveniently over-looking? And remember, elephants don't just stray into the audit room - you might find one in any room of your house!