Because the field is where one could have a field day. And because it’s hard to fake something out there in the field. The field is where substantiation of evidence is tangible and obvious! The field is the place where all evidence is evidently clear!
Recently, I was asked as to how management decided against conduct of certain specific certification related audit engagements? I tried my best to break it down to the enquirer that the scope of the audit engagements required the plant to be in working condition at the time, the systems to be operational and the operations to be continuing, which was not the case.
But the queries were more about something else rather than understanding the reasons and causes of why the audits and then the certifications had to be suspended. That it wasn’t a decision that was to be taken by the management or that the management was unable do something about it since the audits were required to keep certifications intact but could not be performed owing to suspension of the business model were not understood as reasons.
And this business model argument was another more potent and may I say more ridiculous aspect of the enquirer’s understanding. As part of the arguments, I was ‘enlightened’ that the almost 3-year long suspension of plant operations were just a part of its lifecycle. And a suspension that long was in the enquirer’s reason not a cause for suspension of audits even if there wasn’t anything to audit in the field!
The ridiculous aspect was the absence of the business model that led to the suspension of plant operations. The entity had to transform from a plant based operation and maintenance model (the scope of the audits!) to an investment company model and the income from investments was the only income. Yet, in the enquirer’s ‘competent’ opinion this was no reason for the suspension of audits!
The queries were aimed at soliciting answers to the enquirer’s liking. Answers like, it was due to the previous management’s incompetence, not giving the issue due significance, not deliberating upon it in necessary detail, not escalating it to those charged with governance. The enquirer wasn’t at all interested in understanding the root causes so that these could be addressed, simply because these couldn’t be addressed, as the operations remained suspended.
But those were not the only answers the enquirer was looking for. The enquirer was also on the lookout for a hint on how these audits could be performed even if they could not be performed. Yeah, you got that right. Faking the audits so that certifications could be restored. Of course, when you do it that way, only you know, or the auditors know. But for the world you’re ‘certified’.
Till the time the entity becomes a case study of failures to be taught to management studies aspirants in the future, this certification will certainly hold. The worth of this certification and what will it become in the future is tied to the many entities where it has been doled out in such a manner.
And it’s not that fakers don’t do it professionally. They fake it so that you would be fooled in to believe it is all there. They would mimic or simulate the situation in such a way so as to give an illusion of a working business model and continuing operations and hence the certification!
But certainly, that’s coming from what’s on paper and what’s in the records. All these could be faked and would be evidence enough for a surface floater…. a guy like the enquirer in my case! Those who would believe in this would see the benefit of being in and giving into the illusion of conformance and compliance.
The benefits are aplenty, highlighting certifications, brand prominence, market leadership, management accomplishments, etc. Leading to financial incentives for the management (and auditors of course)! Until the façade blows off and reveals the bitter reality inside; that it was all an illusion.
The certifications, conformances, compliances are all faked. But they do serve their purpose, the money flows purposes at the cost of the entity’s business, its survival and at the cost of the whole ecosystem of vendors, suppliers, customers, regulators who believe in the certifications.
It’s not that the auditors would remain aloof and immune from the fallout. But it would be long enough to be part of the faking schemes at a number of other clients before the auditors are exposed if it is not a big ship that sinks courtesy their efforts. A short-term win-win (easy cash!) for both the fraudulent management and their partner in crime auditors.
The reputation taking the hit is in the long-term and surface floaters can’t think that long, hence the surface floaters! But it needs to be understood, what is most devastating for the ecosystem, the failing entities led by surface floaters or the auditors providing assurance and consulting to the surface floaters aka fakers?
In my opinion, it is always the auditors whose negative contribution to society is the most impactful. Simply because they market themselves as assurers, consultants, advisors, assessors, validators, etc. All trust building roles. But when they decide to sell the trust and confidence reposed in them for the short term money and gains for the fakers, society is severely disadvantaged.
The auditors need to understand that before the reputation of their clients takes a hit, it is their reputation that is at stake. And when their client’s reputation goes down the drain, not only does their reputation goes along, but the reputation of the whole profession takes a toll.
The profession’s reputation as a whole is subject to perceptions of society. It will be society’s perception of our reputation that will precede us because many amongst us will always be willing to sell their reputation. And they will always be easy to find since they would far outnumber the real auditors. And the fakers will find them easily.
The auditors in the field are the ones who substantiate the existence and occurrence. They’re the ones who won’t just rely on records but what’s not on records and is there in the field and vice versa. They’re the ones who won’t rely on what the reports from the system say, unless they’ve satisfied themselves on the multitude of controls around the system.
They’re the ones who won’t rely on what the data trends, patterns and analyses say until they’ve obtained assurance over the controls around data sources, relevance, acquisition, processing and querying methodologies. They’re the ones who won’t rely on inquiries unless of course only for corroborating other tangible evidence.
They’re the ones who won’t rely on internal controls unless they’re satisfied with the control environment! Field is where the fact is absolutely distinct from fiction.
But what about those who govern? The Board?
Do they understand when their surface floating executives are telling the truth and when they aren’t? When their executives are faking trust that the Board has reposed in them?
Only one way to find out, hire field auditors and ensure they’re not subjected to the humiliating torture of dealing with the stupid surface floaters!