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Increasing the impact of audit

Posted by | Answering your questions | May 21, 2014
What do performance audits have in common with throwing stones?

The Leyte Landing Memorial in the Philippines"I will return", said General Douglas MacArthur, and he did. In October 1944, the world watched as he waded ashore at Leyte to end his personal quest to liberate the Philippines.

MacArthur, Supreme Commander in the Southwest Pacific during WW2, is described as a controversial and enigmatic figure, but there is no doubting that he had impact. From 1942, MacArthur's headquarters were in Brisbane, located at the AMP building.

I’ve visited the small museum in MacArthur’s old office, with his desk still in place. Located on what is now a busy shopping street, how many of the thousands of people who pass here daily realise what life and death decisions were made from a desk overlooking the street? From here, MacArthur successfully controlled a multi-national force of more than half a million American, Dutch, Australian, New Zealand, and British troops.

I was in Brisbane for the Australasian Council of Auditors-General (ACAG) managers' conference. A major theme of the ACAG conference was the impact of audit and how to get the most value from the investment made in it.

If our aim is to make ripples go further, we must either drop bigger stones or drop them in a different way.

Following up on previous audit reports to see what progress agencies have made with improvements is one way to increase impact – one of our earlier blogs touched on this, and we follow up on public entities' progress regularly. Like MacArthur, the auditor will return.

So, what is "impact"? I’ve borrowed the definition from Performance or compliance, courtesy of Jeremy Lonsdale of the UK's National Audit Office @NAOorguk:

.. the direct and indirect effect or influence that an audit office can have on the practices, performance and culture of the audited agency as a result of performance audit work.

Put simply – what changed as a result of our work.

One of the conference delegates compared performance audits to throwing pebbles in a pond, and that analogy resonated with me. An individual performance audit is one pebble dropped in a pond. The impact is naturally strongest where the pebble enters the water – that is, the agency being audited. How then do audit offices ensure that the ripple is felt not only in the agency but in other entities, where the same lessons could be learned without repeating the audit?

If our aim is to make the ripples spread further, we must either drop bigger stones or drop them in a different way so that more ripples are created. In a time of financial constraint, bigger stones – more or larger audits – might not be a viable solution. Therefore, we auditors have to consider changing what we do.

One way to make the ripples spread further and be felt is helping those who can bring about change get the information they need at the right time and in the right way. Reflecting periodically on what business we are in is always worthwhile. Is our business producing reports or helping to effect change?

Reports can be the catalyst for change, but we need to remember that audit reports have a life beyond the office door. Not always easy to do when the pressure is on to be timely and deadlines loom large! In fact, beyond the office door is where the "gold" is buried. We do our work a disservice when we don’t remember this.

Any marketing professional will tell you that only one of the four "P"s of the marketing mix is the product. The other three are all about making the product successful in the market place. So three-quarters of the theoretical framework for marketing doesn’t involve the product.

Do we, as auditors, put enough effort into thinking about our "products" in this way?

Richard Lansdowne
Richard Lansdowne says:
May 27, 2014 01:13 PM
Tom, Thanks. I am just scoping an audit and your post prompted my thinking in some new, interesting directions to help refine scope options. In particular two angles: Firstly, the potential effect various scope options for the audit could have on the each of practice and culture, and through them, performance. And secondly, considering who in the agency were the ones that can achieve change - and what information would most help them. However, we should also keep in mind that performance audits can have an important assurance goal - providing independent advice to Parliament on effectivenss of expenditure. Regards, Richard
Tom Haslam
Tom Haslam says:
May 27, 2014 02:10 PM
Hi Richard, Thank you for your kind and thoughtful comments. I like how you've boiled it down to who and what - that appeals to my sense of simplicity.
Alan Morris
Alan Morris says:
May 31, 2014 03:56 AM
Here at the Wales Audit Office we are also looking at how we can increase the impact of our audit work and how we can better measure that impact. One of the ways in which we currently aim to maximise the impact of our audit work is through our Good Practice Exchange @GoodPracticeWAO and shared learning events.

We identify and gather good practice examples during the course of our audit work and from further afield. We then share that good practice in a number of ways, such as: case studies within reports and on our website; shared learning seminars; and online good practice guidance. One of our priorities is to promote sharing and learning from good practice across the public sector. We believe that public sector organisations can often learn from the experience of other sectors. We therefore aim to get representatives from a cross section of public bodies at our shared learning events.

We also find that working with partner organisations helps to increase the impact of our work. During 2013-14 we worked with 15 partners to deliver 14 shared learning seminars and one webinar, attended by 609 delegates. We also work in partnership with Good Practice Wales , a single access online portal to Welsh Public Services good practice and knowledge.

We also extend the impact and reach of our shared learning events thought the use of social media. This includes using Twitter to share key messages before, during and after seminars and asking speakers and participants to share knowledge and experience through blogs and video clips.

Here in Wales we believe that our good practice activity significantly enhances the impact of our audit work when compared with the ‘traditional’ approach of publishing a report. The audit report still has a very important place, but is now supplemented by a range of other products. Shared learning seminars, good practice guides and toolkits and use of social media mean that the ripples of our audit work spread further and last a lot longer.

Tom Haslam
Tom Haslam says:
Jun 03, 2014 04:22 PM
Alan, thank you for sharing what the WAO does. Many audit offices face similar challenges so sharing in this way helps us all. The WAO’s approach to promoting good practice and learning sounds like a great way to leverage the investment made in audit. I get the impression that there is certainly a lot of good work going on in Wales beyond the office door.
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