Voice recorders: an effective way to reduce time documenting controls
by Jean-Louis Vergaert
Experienced internal auditors know their business. They foresee the issues, are familiar with the risks and controls specific to the business processes they audit, have seen best practices in some places, and weak controls in others. Auditors possess a mental map of how a process must work to be efficient and well-controlled.
A fast and efficient auditing tool is interviewing: we can quickly review a process, identify issues, go deep in exceptions, summarize the weaknesses, make effective recommendations, and then move on. Junior auditors must first learn the process through intensive documentation in flow charts, questionnaires, risk matrixes, or walkthroughs. This is a necessary step in the growth to experienced auditor. Unfortunately, ever-increasing documentation requirements from Sarbanes-Oxley, peer reviews, and outside auditors (who are very knowledgeable in financial issues, but by definition are not familiar with the specific business processes of every organization they audit) increase our workload and prevent optimization of the time spent on audits. The time we spend on documentation is time not spent on investigation.
Is there a way to satisfy the documentation requirements without wasting our time on such menial tasks? One tool is voice recording interviews. The principle is simple; we use a digital recorder to record an interview, upload it on our PC, and insert it in our audit database. We no longer need to take notes; if we forget something from the interview, we can easily go back and listen. We don’t have to spend time writing descriptions, filling in questionnaires or risk matrixes, or drafting flow-charts; if the audit is subject to peer review, the reviewer can listen to the interview file and we can sit by their side to answer any questions. Simply stated, we are saving hours and hours of tedious work during our audits.
As always, great tools and new technologies bear risks. Without the correct methodology, auditing based on taped interviews could seriously reduce its quality. We could end up with audits completed in a few days, but without any substance; the overview of an audit based on a long and poorly-performed interview will highlight its non-compliance with basic auditing standards.
The following are rules that I have created to properly use voice-recording. These rules are subject to debate, which I invite:
1) Voice-recording is for experienced auditors only.
Interviews go quickly and require a very detailed mental map of a complete process along with good interviewing skills. Junior auditors are likely to forget key questions and to assume answers instead of challenging them. A good interviewer must control the interviewee but also agree to deviate from the standard questions when necessary. Interviewing is an art which requires practice. An auditor should use taped interviews as auditing evidence only after they master the art.
2) Beware of local legislation and avoid making the interviewee uncomfortable with voice recorders.
I personally start an interview by stating the following: “I would appreciate to record our interview. I want to highlight that I shall use it only for my working files, in accordance with European standards, meaning nothing here will be withheld against you, and I shall not play or give it to your superiors. If there is any weakness I identify, I shall first discuss it with you. If you feel uncomfortable, I shall not record the interview but summarize the key facts by myself.”
3) Use purpose-made digital voice recorders and avoid cheap gadgets.
Good voice recorders must have the following:
-
Special file format with good compression rate; recording in “wav” or “mp3” format uses lot of memory. Dedicated voice formats like “dvf” takes five times less memory.
-
Editing software, which allows easy cut-off of files, combining two files, and play-back listening at slower or accelerated speed.
-
Ease of use: first of all, you must easily start and stop an interview – and notice when you are recording. Deleting or editing files can easily be done through the editing software.
-
Good microphone with high or low signal modes.
-
For the record, I use Sony ICD-P series, which provides satisfactory results.
4) Structure the audit program to keep interviews short, from one to three minutes.
Beyond that length, it becomes impossible to listen and understand the tapes. The audit program must be structured to that purpose, making separate audit steps, each one covering a few key points. Keep that map next to you while doing the interview. Create interview files for each point. When beginning to record a file, state the reference of the audit step.
5) Recognize the limits with some people.
It’s impossible to interview some people; their language skills, or simply communication skills, can be poor. Some people don’t listen to your questions and start talking during hours outside your subject. Others become emotional or overly sensitive. Instead of recording hour-long interview files, simply show the person that you stop recording after a few minutes. Then, every five minutes, record by yourself a summary of the important points, asking the interviewee to confirm that your understanding is correct. And keep the first interview file as evidence to the difficulty you experienced when questioning the individual.
Voice recording is an interesting tool with both high potentials and high risks. It might be tempting for conservative auditors to outwardly reject this technology. But it is important to ask the question: Should you spend your time documenting an interview or exploring interesting leads that may result in finding a major fraud or weakness? At a time where auditors are required to audit more for less, time is a luxury we can no longer afford to waste and any time-saving tool should be considered.
Jean-Louis Vergaert has 15 years audit experience and is the international auditor for United International Pictures, a major movie-distribution company. He travels world-wide to perform financial and operational audits of its offices and third party sub-distributors.
Jean-Louis welcomes all comments at Jean-Louis_Vergaert@uip.com