“Thomas Cook used its auditors to justify £5m bonus”
“Audit firm EY, which signed off on Thomas Cook’s financial health before its collapse, also wrote a report used to award its former boss a £5m bonus” (Howard Mustoe, Dan Box & Alys Harte, BBC)
“These are smart people, but how could they get this so entirely wrong?” said Professor Cooper as the FRC launches an investigation.
“Quite easily”, according to Ian Hynes, CEO of Intersol Global, a company that specialises in training and qualifying auditors to ‘Manage Difficult Audit Conversations’ who added “Regrettably The Thomas Cook debacle is the latest of many, including Tesco, Carillion, Patisserie Valerie, and they share one common denominator, a lack of investigation and investigative interviewing knowledge and understanding on the part of the auditor and inability to ‘challenge’ effectively”.
Intersol Global have been training auditors in the principles of reliable fact-finding investigation and having effective audit conversations for over 5 years, training triggered by the increasing number of DPAs facing global banking as a direct result of poor (if not non-existent) non-technical skills training.
“Auditors are highly skilled technically but the universal feedback after our non-technical skills training is that auditors wished they’d had the training at the outset of their careers not towards the end, that it was essential and should be part of the onboarding process”.
This feedback was the drive to develop a qualification specifically for the audit profession recognising that audit skills and processes embrace some core investigation principles, key cognitive areas of decision-making that guide or impact data gathering. These key cognitive areas are vital in guiding the direction of the investigatory (audit) work and directing the auditor to investigate an issue further.
Furthermore, analysis revealed that auditors lacked the confidence to manage difficult meetings and conversations, and on the flip-side auditee’s primary frustration was the number of meetings and repeated questioning, usually as a result of poor planning and practice.
In consequence Intersol Global were commissioned to deliver audit training that,
- demonstrated to regulators that audit was strengthening their functions and that they served as an effective control
- implemented consistent methodology and professional practice
- supported a new competency framework defined specifically for the global internal audit function that meant they needed to implement training that would support auditors to develop and enhance those competencies
The successful (and ongoing rollout) secured several benefits including:
- achieving the 3 primary objectives listed
- reduction in costs
- improved brand reputation
- increased staff confidence and competence
- a reduction in meetings to achieve the same objectives
- improved staff satisfaction and retention
- osmosis of good practice across other business functions
“To quote Professor Cooper. Yes, auditors are ‘very smart people’, often incredibly gifted, technically skilled and with a thirst for knowledge, but they rarely, if ever, receive any training or support to conduct those difficult fact-finding conversations and appropriately ‘challenge’ the business. It is the mission of the team at Intersol Global to support the audit profession to make the level 3 award in ‘Managing Difficult Audit Conversations’ a must have’ not just a ‘nice to have’ so that the sort of disasters highlighted and associated consequences are reduced”.
If you want to know more about the qualification and awards developed for the audit profession please contact the team at Intersol Global at firstname.lastname@example.org
Full article courtesy of the BBC here: