Adapted from a reprint of an April 1982 Newsletter of the Mississippi Chapter of ASPA
Auditors face many challenges when dealing with audited entities and the point of contacts. And for anyone who has been audited by auditors, it can be pleasure or pain depending on how well you and the auditors get along.
In 1982, the Mississippi Chapter of the ASPA (assuming it meant Association of the State Public Accountants), originally published a hilarious, but truthful guide for accountability avoidance or how to respond to a critical audit. The guide was a list of 10 ways for someone on the receiving end of an audit to respond to the auditors or public. Well, it is the 21st century and I think the guide needed an update or additional ways for those receiving a critical audit report to use in their “defense.” And with the way how things are going in this current environment, an updated guide comes in time for those facing or performing audits. I included the original 10 with updated language to reflect today’s environment.
For those who have been audited, how many of these have you tried on auditors? Do not be shy. And for auditors, how many of these have you experienced or heard about?
- Say the audit report is filled with “gross errors.”
- State that you were “aware of the problems” which were “blown out of proportion” by the auditors who “nitpicked” your agency.
- Imply or say that the audit was a “vendetta” and throw in terms like “witchhunt” or “sour grapes.” Make sure to appear pitiful, picked on, or victimized.
- Make the audit appear to be the problem rather than the critical audit findings.
- Imply incompetence of the audit team with emphasis on effective terms like “idealistic,” “too young,” or “well-meaning but not well-informed.”
- Say you were set up, tricked, or lied to by the audit team. Always, always, always imply that the auditors “told me everything was ‘OK’ before they left.”
- Imply undue auditor criticism of the program’s worthy goals and objectives. Make sure to distract attention away from poor management and deficient accounting practices. Remember “He who attacks the corrupt priest also attacks the church.” Is the tagline.
- Say the federal government approved the practice that the auditor said was poor management or illegal.
- Claim lack of expertise or experience by the auditors. (“It takes an experienced person to evaluate our program’s effectiveness.” “Those of us in the field [pick your favorite] are aware of subtleties that mitigate what would appear to the uninformed as an audit finding.”)
- Claim that the funding agency point of contact did not provide clear instruction and information.
- Name drop politicians or celebrities who can vouch for your program.
- Claim fake news.
- Claim poverty that there is not enough funding to address the findings.
- Play the [name] card to scare the auditors
- Hire overconfident attorneys to stall and drag out the audit.
- Hire overconfident consultants to counter the auditors.
- Decry that politics are hurting the people who need the program.
- Claim undue burdensome to resolve the audit findings.
- Unleash a public relation blitz to discredit the auditors and the audit.
- Buddy up with the auditors to sway their findings.
- Hold the proverbial gun over the beneficiaries’ heads if funds are taken away.
- Cry auditor bias against [insert name].
- “Dial a friend” or politicians to save you from an audit that does harm to the community.
- Complain that the audit was too long and hampered your limited resources and ability meet daily operations.
- Complain that the audit was too short and did not capture the entire nature of your operations.
- Say that the auditors were applying their own interpretation of the regulations to reach a bad conclusion.
- Say that the auditors failed to keep you in the loop on the status of the work and preliminary findings to allow for response.
- Say that the employees (current or former) disclosing information to the auditors were disgruntled and bad performers.
- Get the auditor’s supervisor or even better, upper management, to take your side giving doubt to the audit work and judgement.
- Try to get the auditor fired. Contact the auditor’s supervisors or source of funding. Repeat 1-29 above with appropriate adjustments to suit the situation.
I hope this guide will keep those on the receiving end of an audit prepped and ready for battle. For the auditors, you could use this cheat sheet to anticipate any potential responses.