Conflict Management during audit

Conflict is defined as a clash between individuals arising out of a difference in thought process, attitudes, understanding, interests, requirements and even sometimes perceptions. Disagreements among individuals lead to conflicts and fights. An audit is a process if not handled well will turn the audit room into a battle ground as often difference of opinions, requirements, understandings are experienced between the auditor and the auditee. Hence, conflict management during audit is a tricky but important aspect that an auditor shall develop.

As it is said that “Prevention is better than cure”. Similarly best way to resolve a conflict is to take steps to prevent conflict occurrence. Conflict may happen between auditor and auditee, but possibility of conflict between the audit team cannot be ruled out.

Conflict normally stem from lack of communication, misunderstanding, misinterpretation, lack of experience, close mindedness etc.

Misunderstandings are the most common cause of conflict during an audit. Sources of misunderstanding are poor communication, poor listening, and auditor or auditee bias. A good auditor always lookout for signs of misunderstanding which includes non-cooperative attitude of auditee, repeated questions about audit scope and agenda, inconspicuous absence of the management, provision of inadequate or incorrect records for review etc.

He must understand the concerns of the auditee well and if required he shall repeat or clarify the information that was not fully understood before proceeding. A good auditor shall also be a good listener, i.e. they must not only hear what is being said but also recognize an undertone or an underlying message which is contradictory to what actually is being said. To avoid misunderstanding an auditor shall always try to use simpler words and rephrase the questions if required. An auditor shall also avoid the terminologies that have confusing meanings and industry jagrons. In spite of this, the auditor must look for signals if the auditee is uncooperative or does not act in good faith.

Unnecessary and unreasonable demands are often a source of conflict during the audit. This becomes especially true when the auditee is intimidated by the audit team and, as a result, is unwilling to say anything ahead of time. These kinds of issues can manifest themselves later in the form of uncooperativeness, avoidance, belligerence, or even sabotage.

Hiding or withholding an information may lead to conflict. Sometimes it is seen that the auditors try to withhold important information about the audit’s status or results and surprise the auditee at or after the exit meeting. This leads to a breach of trust between an auditor and an auditee.

Expectations from an auditor:

It has been observed that during audits the overall atmosphere is sometimes so tense, that the tempers do flare. During audits the auditor must remain open-minded and flexible. They should avoid criticizing as all people do not take criticism too well which may lead to tense situations. An auditor must understand that during an audit they are not only disrupting their daily routine work but are also kind of commenting on the person’s capability, knowledge and skills directly or indirectly.

An auditor shall understand the customs and practices of the auditee organization and shall plan their audit schedule accordingly. Any surprise requests during an audit shall be avoided.

Auditors shall share the findings and concerns with the auditee on a regular basis during informal daily meetings or during actual audit performance. Auditors shall be transparent with the auditee about the nature of the information being recorded. Being up front with auditees also puts them at ease and address their concerns about the audit process, hence, reducing the likelihood of conflict.

What if Conflict happens?

As mentioned above, avoiding conflict is the best remedy, however, even after taking utmost care, conflicts do happen. Handling conflict requires experience, interpersonal skills, technique and training. In case of any conflict, the best policy is to immediately cool down the things by temporarily stopping the audit. This well help to avoid unnecessary involvement in the conflict, exaggeration of the matter and losing control of the audit process. The ultimate result of losing control is the premature termination of the audit or the auditee not allowing the auditor to proceed. Either of the two outcomes will be a loose – loose situation for both the auditor as well as auditee.

Once the situation cooldown, the auditor can have one on one interaction with the auditee and other aggrieved parties to understand their grievances and the source of the misunderstanding. The auditor must listen to the grievance with an open-mind and shall not loose temper even if he has been pointed as the reason of the conflict. The auditor must be flexible enough to make necessary changes in the audit methodology if required.

An auditor does not have the option of avoiding or trying to smooth over an issue with an auditee. Nor should an auditor attack individual or attempt to use his or her position to overpower them. Forcing a conflict escalates it and increases the chance of recurrence later in the audit with the same person. Sometimes successful resolution of conflict is agreement that there is disagreement.

Other Difficult Situations:

Apart from auditor – auditee conflicts, there are many other difficult situations which are counterproductive to the auditing process. For example, an auditee may be antagonistic or coercive. Many a times an auditee makes the interviewing ineffective by either talking too much or by not talking at all. In any difficult situation, the auditor should remain polite but firm, maintaining self-control and complete control of the audit. Tactful management of the difficult situations is an art which is learnt by experience. Few of the ways are highlighted as below:

Defusing Antagonistic Situations

Antagonistic situation may arise dur to various reasons such as perceiving the auditor criticism as a personal attack or his work capabilities by the auditee. When auditees get defensive, the auditor should separate them or suggest a break to defuse the situation. The auditor should continue the conversation at a later time, when everyone is calm. An auditor shall also be very particular about his choice of words when being critical as it will make the auditee hostile.

Combating Time- Wasting Techniques

An auditor is the Captain of the Audit and shall not led the auditee take control of the proceedings. He shall immediately recognize the time-wasting tactics viz. lengthy presentation at the opening meeting, an extended plant tour, organizing meals at far off restaurants, delay in providing documentation, finding a topic to engage the auditor in non-related issues such as environment, climate change, politics etc. An auditor on identification of such delaying tactis, shall immediately raise a red flag and should halt these activities or limit the time spent on them. Proper planning and sharing the schedule and list of documentation required with the auditee beforehand is always helpful. Read more about time management skills during audit here.

Various time wasting problems and their probable solutions are as follows:

In upcoming articles, we shall be discussing in detail about communication including interviewing techniques and presentations.

Stay tuned!

Reference: ISO19011:2018