Behavior matters: The role of emotional intelligence in internal audit
While cognitive biases shape how we interpret information, emotional intelligence (EI) — the ability to understand and manage emotions — influences how we interact with stakeholders and manage our audit work.
Why emotional intelligence matters: In an era of increasing reliance on AI and data-driven insights, the human side of audit remains as critical as ever. Emotional intelligence allows audit to:
- Build trust: Our stakeholders are more likely to accept and trust the findings from auditors who demonstrate empathy and an understanding of their work.
- Navigate resistance: High EI helps auditors anticipate and address defensive reactions, fostering collaboration instead of confrontation.
- Communicate effectively: Auditors with strong EI can tailor their communication to resonate with a diverse audience, ensuring their messages are impactful.
Developing emotional intelligence: Auditors can enhance their EI through:
- Self-awareness exercises: Regular reflection on how emotions influence our decision-making. One of the best ways to do this is to stop and ask yourself, “Why am I feeling this way?” This simple exercise can help you uncover the underlying reasons that are influencing your decisions.
- Active listening training: Practicing listening techniques so we can truly hear and understand what our stakeholders are saying. Try pausing for 3 seconds, then recap their message to confirm understanding before responding. For example, “If I understand correctly, your main concern is…”
- Feedback and mentorship: Seeking constructive input from peers and supervisors to improve interpersonal skills. During interactions with peers and mentors, simply ask for feedback, record it in a journal, and then take action to improve or double down on your strengths.
Charting a clear course: Practical steps for internal auditors
In our complex world full of resource constraints, ever-evolving risks, information overload, and AI advancements, internal audit needs to adopt practical strategies that address the biases we face every day. Below are actionable steps for navigating today’s dynamic audit landscape:
1. Validate AI outputs with professional skepticism: Never has it been more critical for internal audit to double down and continue its training on applying professional judgment and skepticism. Audit should:
- Cross-check outputs: Compare AI results with independent data sources or manual testing.
- Understand algorithms: Collaborate with your organization’s data scientists or AI teams to identify biases in AI training data.
- Maintain oversight: Treat AI as a tool to support decisions, not the sole source of conclusions.
2. Strengthen stakeholder engagement: Establishing and maintaining a solid foundation of collaboration with stakeholders is essential for addressing conflicting narratives and ensuring that audit findings are actionable. Internal audit can:
- Facilitate communication: Establish regular touchpoints to clarify expectations and address discrepancies.
- Leverage expertise: Engage with diverse teams across the organization to gain multiple perspectives on complex issues.
- Frame recommendations constructively: Highlight opportunities for improvement rather than focusing solely on deficiencies.
3. Harness technology to reduce bias and enhance decision-making: Use proven technologies to address cognitive biases and improve audit accuracy. Key technologies include:
- Data analytics platforms: Leverage tools like TeamMate Analytics for Audit to quickly analyze large datasets to identify patterns and anomalies.
- Real-time auditing: Utilize auditing capabilities like TeamMate+ Agile Audit to be more responsive to change, based on the most current data.
- Visualization tools: Use dashboards to simplify complex insights, reducing the risk of miscommunication with stakeholders.
The future of internal audit: A blend of psychology and technology
Like my nephew learning to excel at soccer despite his color blindness, internal audit must excel in a world of blurred lines caused by incomplete information, data overload, contradictory narratives, and AI influence. By understanding bias, behavior, and decision-making, and combining human insights with advanced technology, internal audit can adapt, maintain objectivity, and provide meaningful guidance. With professional skepticism, continuous learning, and collaboration, internal audit can help organizations thrive, even when the lines remain unclear.