effective inquiry starts with knowing how to ask the right questions.
by alan anderson, cpa
transforming audit for the future
to weave relevance into the fabric of your firm culture, your team must shift from just getting the work done, with relevance as an afterthought, to putting the client at the center of the audit. that starts by building a foundation with the four u’s of understanding your client, the industry, the standards and how to audit.
more: are you correctly identifying the relevance intersection? | lack of relevance drives audit commoditization | five crucial attributes for successful audit leadership | traditional audits don’t deserve premium billing | four basic understandings every auditor must master | put the ethics code to work for your clients and your firm | turning audit & accounting into assurance & advisory | wanted: great audit mentors | is audit in crisis because of definitions? | stop sending the wrong message to audit teams | closing the audit expectations gap
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to master these, you first need a natural sense of curiosity. out of curiosity comes inquiry. we’ve all been taught that inquiry is one of the fundamental components of the audit process. but too often, inquiry doesn’t go any further than getting some answers to the questions on a checklist. and too often, those questions are the same ones that get asked at every audit engagement. the client has probably heard them (and answered them) more times than you can imagine.
learn to ask better questions.
instead of relying on checklists for questions, use your curiosity to formulate lines of inquiry that help you understand the business. by asking better questions, you demonstrate to the client that you’ve been thinking about their business and challenges. but most auditors are not having those conversations. we’re not trying to find out what keeps clients up at night, which makes it nearly impossible to deliver on relevance.
effective inquiry starts with knowing how to ask the right questions. when you and your team ask effective questions, you establish a more meaningful connection with your clients. that connection helps you gain their cooperation and trust. you understand what’s relevant to them because you have a deeper knowledge of their business and concerns.
better questions result in better audit evidence because you take the time to go beyond the superficial yes/no answers. with better audit evidence and a deeper understanding of your clients’ dynamics, you reduce the likelihood of making mistakes that could lead to an incorrect audit opinion.
the yes/no questions in typical audit checklists are efficient. getting through them is quick and easy. but they are not the most effective. they do not establish the open and candid relationship needed for accurate communication. effective inquiry begins with asking open-ended “what” and “how” questions. open-ended questions encourage continued conversation and help you get more information. to get started, you may need to think of questions to ask your client before your meeting and fieldwork begins. don’t just go in with a checklist and move through your open items.
behind effective inquiry is also the ability to listen to the answer and to defer judgment. this means being intent on understanding what the client is really saying and what is behind their answer. it is very likely that the client’s answer will raise additional questions.
besides the open-ended questions you have planned, keep an open mind for other questions and thoughts that may come up as you talk. seize those opportunities to ask deeper, probing questions as followups. if you’re not quite sure what to ask, you can ask, “can you tell me more about________?” another great question is, “why did you put it that way?”
don’t be afraid to ask the hard questions. some auditors are afraid that they might annoy the client. but i remember when olivia kirtley was chair of the aicpa. she was the cfo of vermont american corp., and they had a big four firm as an auditor. she said she never had a partner in the firm who would sit with her and talk and have an open-ended brainstorming session during an audit.
and isn’t that a shame?