Audit process

Using Audits to settle scores

by Vincent Obiro Orute

Do you always feel faint whenever rumours of an impending audit or branch inspection rage through the organization you work for? If your answer to this simple question is a resounding yes, then just know that you are not alone. Today, hundreds of intelligent, smart looking, and productive people especially bank employees feel the same, with cold sweat trickling down their armpits whenever there is a rumour of impending audit or to be more precise branch inspection.

Branch inspections are routine exercises which are always carried out from time to time by people we call in banking lexicon branch inspectors. These people are internal auditors and are based at head - office and their duty is to carry out branch inspections throughout the year as opposed to once a year with external auditors.

Their knowledge of inside operations allows them to go into more depth in their analysis so that problems can be diagnosed early enough and appropriate remedial action taken immediately.

The problem with internal audits is that some branch managers use them as a "Police" action to weed out non performers and those perceived to be in bad books with the management. Today, your branch manager can use every trick in the book to get you out of job and he will be ready to sack you even if the mistake you have done is punishable by a mere memo or a simple verbal warning. The simplest way branch managers weed out non performers and those perceived to be in bad books with the management is through branch inspectors or internal auditors. And the ritual is simple and is all- too familiar.

First, your branch manager drafts a simple internal memo to head office requesting for a full inspection of his or her branch. The memo is accordingly received in head office by the chief inspector of branches with its contents duly noted. Then it is acknowledged by the chief inspectors of branches and the same is dispatched to the branch in question.

By the time the acknowledgement of this memo reaches the branch, the stage will have been set for a full branch inspection and branch inspectors are dispatched to the branch in question to carry out inspection of the branch and report to head office accordingly.

If you happen to be in bad books with the management and you happen to work in departments such as Bills and Foreign Exchange, Current Accounts, Savings Accounts, Accounts, and Advances where there are so many suspense accounts, then just know very well that your days in the bank are numbered.

You will be told to prepare a list of all suspense accounts in your department and submit them to the branch inspectors. Once the branch inspectors received these returns, they will sift through each suspense account with a fine tooth comb with each item appearing in the suspense account being treated on its own individual merit.

And if they happen to find any item that looks suspect, you will be written an internal memo requiring you to justify the presence of such an item in the suspense account. If your explanation is deemed to be unsatisfactory, you will be written a second memo requiring you to show cause why severe disciplinary action should not be preferred against you.

The moment you receive the second memo, just know that your fate in the bank is effectively sealed and all that remains is your eventual dismissal. Why do I say so? It is because branch inspectors will always make recommendations to head office and because you are a marked man, they will always orchestrate a situation that will force the human resource manager’s hand into sacking or dismissing you from job.

Today, the only people who survive from the jaws of branch inspectors are the so called boot-lickers. These are people who act as informers and are very close to the management. Whenever there is an audit or a normal branch inspection their mistakes once identified are always swept under the carpet and they are effectively forgotten .These are the very people who regard any form of criticism however genuine as a conspiracy against the management and because they are close to the management, they will always report you and once you are reported to the management, then you eventually enter into the managements bad books and you will always be unnecessarily treated as being a rebel.

In my humble view, using internal auditors to weed out non performers and those perceived to be in bad books with the management is a total abuse of the audit process.

While the discovery of misdeeds is a purpose of an audit, it should surely not be its only purpose. It should at times be even oriented to validate the honesty and fairness of the organizations financial statements, and this is by far the main purpose of an audit. We should not use audits as instruments to weed out people we have disagreed with. When you do this, you end up defeating the very purpose of an audit process.

In accounting we are told, audit is a process through which one party attempts to determine if another has done something wrong. While you attempt to determine whether others have done something wrong, remember one day other people will also be attempting to determine whether you have done something wrong and this will be the day the boot will squarely be on the other foot.

Last modified: July 08, 2004 . Copyright © 2001 -  2004  Arusha Times.  E-mail: arushatimes@habari.co.tz

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