People don’t like it when you point out their mistakes. Admitting something is wrong is painful for many people, creating a condition known as “psychological dissonance.”
Psychological dissonance occurs when someone is forced to reconcile two contradictory ideas. For example, a person who believes they are good at their job might bristle at evidence that points out a problem with their work product. In their minds, they are a good worker. Good workers do things correctly. By saying they made a mistake, the implication is that they are not a good worker.
Pointing out the error isn’t seen as constructive criticism. It’s a personal attack on their self-identity as a good worker.
This explains why so many people don’t like internal auditors. Auditors exist to question authority. They look for truth and ask hard questions, and people don’t always like the answers.
This dislike is misplaced. Internal auditors are not the enemy. They are amazingly helpful partners with a financial organization’s best interests at heart. Their goal is not to knock you down but to make you stronger.
Ask yourself: if you were going to take a school exam, would you like the opportunity to take a practice test?
Of course, you would! It would give you the opportunity to see how well you knew the material and what, if anything, you needed to study more before the actual exam.
Would you be mad at the practice test when you got an answer wrong? No. You might be annoyed at yourself for getting it wrong, but you wouldn’t blame the test. You’d appreciate knowing you made a mistake so you can correct it going forward.
Related: Credibility in an Era of Misinformation: Why Audit Is More Important Than Ever
An auditor is just like a practice test. It helps you find weaknesses, so you can improve. It helps your organization become a better version of itself, one that is strong, resilient, and able to stand up to regulatory scrutiny.
Don’t be frustrated when an internal auditor uncovers problems. Be thankful! It may not be the news you were hoping for, but it’s the news you need to hear. It blasts away assumptions and wishful thinking to reveal reality. And it helps support a culture that truly values feedback, which makes an institution stronger.
Ignoring internal auditors or not giving them the autonomy and resources to do their job well is a huge mistake that can result in massive fines and unsafe and unsound banking practices.
Here are three recent examples:
Related: 5 Must-Have Elements of an Effective Audit Program
In each of these instances, financial organizations either had bad data from poor internal audit programs or ignored good audit data. If they could go back in time, I suspect these organizations would have paid more attention to their internal audit function and the data it provides.