When I started working for municipalities as a young auditor, my customers told me that in the past they used to hoist the flag to mark an audit day. The audit sector has changed a lot from those days. Today an auditor is regarded rather as the management's partner whose work provides added value to customers. In this blog series, we discuss the changes taking place in audit work and our operating environment from the perspective of our new strategy.
In the best case, an auditor of central government finances serves as the customer’s, i.e. the audited entity’s, partner that develops central government. Auditors are required to possess broad competence and to be interested in different kinds of organisations and their operations. Auditors must stick to facts and the truth in all their work and opinions, and they must work completely independently. The requirement for independence binds the auditor throughout the audit. This means that the auditor must not be or even seem to be dependent on the customer in any way.
Auditors are also required to work objectively. Objectivity is, in fact, one of the values of the National Audit Office of Finland (NAOF). At the NAOF, we look into issues from different perspectives without any preconceptions and treat everyone fairly and equally. An auditor’s work must not be affected by how the customer’s, or the auditee’s, responsible persons behave or what kinds of clothes they wear, or similar external factors. An auditor does not have to tolerate any kind of behaviour, but behaviour or any other external factor must not impact the results of the audit.
The requirement for independence and objectivity ensures that customers and stakeholders are provided with verified information on the auditee. This is how auditors earns their trust.
Auditors conduct audits in many different kinds of organisations. This applies particularly to the National Audit Office compared with the private sector, for example, and auditors’ work in the private sector. In central government, auditors audit accounting offices with often mutually very different objectives.
In their work, the NAOF’s auditors may sometimes also have to deal with auditees whose objectives are contradictory to their own interests or ideologies. Nevertheless, an auditor must never allow their own interests or values to affect their audit and audit report. Conflicts of interests may typically arise at the following audited entities, for example: animal welfare issues at the Finnish Food Authority; vaccination issues at the Finnish Institute for Health and Welfare; major military supply procurements at the Finnish Defence Forces; and immigration-related issues at the Finnish Immigration Service.
Auditors can and should listen to the customer
How can we reconcile the requirement for independence and objectivity with the customer-centric approach? It is often easier to associate customer-centric work with more concrete service sectors. For example, we probably have a clear idea of what a customer-centric restaurant culture could mean. It may be more difficult to understand what customer-centric audit work means.
In my opinion, however, customers provide valuable information on request. Auditors can take customers’ wishes into account when planning meetings, audit schedules, and reporting methods. I am convinced that the customer-centric approach will become even more important in audit work in the future. Active interaction helps us identify the customer needs, and a good customer relationship is also built on dialogue.
We should listen to the customer’s views and expertise not only during an audit but also before the audit plan is drawn up and the audit is launched. Listening to the customer does not risk the requirements for independence and objectivity in our work, as decisions on the audits to be conducted, their contents, and reporting are always made by the auditor together with the NAOF’s steering body.
The NAOF has recently overhauled its strategy and management system. We aim at providing customer-centric products and services and having good customer insight based on interaction. Interaction with those who utilise our audit results helps us understand their individual needs. There is no ‘one size fits all’ solution, but we must listen to each customer separately in each case.
A modern audit no longer reports only on what is wrong but tells what can be improved and how, and how the existing risks can be reduced. Based on our audits, we want to give recommendations that are easy to utilise in operations and decision-making. Our recommendations focus on the essential and promote the development of central government operations and finances.
In my opinion, customer-centric audit is therefore fact, not fiction. The NAOF has always practised it and will focus on it even more in the future. In addition to interaction, listening plays a key role in this approach. Stephen Covey, an American businessman and author, said: “Most people do not listen with the intent to understand; they listen with the intent to reply.” This is something we strive to avoid.