Audit performance depends on clear processes, sufficient resources, and well-defined expectations that allow staff to carry out tasks. Addressing root causes such as ambiguous direction, inadequate feedback, or skill gaps supports consistent audit quality and reduces operational bottlenecks.
Key Insights
- Audit performance issues often arise from cumbersome procedures, conflicting priorities, or bureaucratic requirements that slow down workflow efficiency.
- Lack of clear direction, timely feedback, or adequate resources can lead to recurring errors, inconsistent documentation, or incomplete audit work.
- Human factors such as insufficient technical skills or low motivation may cause performance gaps that require training, coaching, or reassessment of job fit.
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When an audit engagement starts to slip, it is tempting to assume the problem is the person doing the work. In practice, most performance issues have root causes embedded in the system around the performer. The six elements below provide a structured way to diagnose what is really getting in the way by looking first at the work itself (tasks), then the expectations (direction), support (resources), incentives (consequences), and communication (feedback), before finally evaluating whether the issue truly sits with the individual (the performer). Used together with a Fishbone diagram, this framework helps supervisors pinpoint the right fix instead of treating symptoms.
Element 1: Tasks
The tasks element covers the processes, procedures, technology, and methods that staff are expected to use to do their work. Performance problems in this category typically arise when the work itself is poorly designed rather than when the individual is at fault.
Common examples include:
- Procedures that are too cumbersome or outdated
- Aspects of the job that conflict with or interfere with each other
- Excessive paperwork or bureaucratic requirements that consume time without adding audit value
Solutions in this area generally involve streamlining workflows and modernizing tools. Key approaches include:
- Streamlining and simplifying: Reducing redundant approval steps and updating outdated audit programs.
- Technology and systems: Replacing manual spreadsheet-based tracking with automated, integrated GRC (governance, risk, and compliance) platforms that provide better data visibility.
- Methodology: Shifting from checklist-driven approaches to risk-based auditing that reduces information overload and keeps the focus on what matters most.
Element 2: Direction
The direction element addresses whether staff have been given clear goals, performance standards, instructions, and timeframes. Even capable auditors produce inconsistent or inadequate work when they do not understand what is expected of them or how their work fits into the broader audit objectives.
Common examples include:
- Vague or absent instructions for a specific procedure
- Staff not being told how their piece of the work connects to the rest of the engagement
- No clear criteria communicated for what successful performance looks like
Root cause example: An auditor fails to identify a significant unrecorded liability during a field audit because they were instructed only to vouch vendor invoices, without being told to review post-balance-sheet cash disbursements. The root cause was a lack of detailed instructions, which caused necessary procedures to be skipped entirely.
Element 3: Resources
The resources element covers the tools, information, budget, time, staff, and inputs from other units that auditors need to do their work effectively. When these are inadequate, the result is bottlenecks that compromise audit quality, cause missed issues, or lead to incomplete documentation.
Common examples include:
- Insufficient travel funds for field work
- Delayed receipt of required inputs from other departments or client personnel
- Lack of specialized equipment or systems needed for certain audit procedures
Root cause example: An audit fails to identify significant inventory misstatements because there was no budget for specialized staff or equipment. The team was forced to rely on high-level analytical testing rather than physical verification, which was insufficient to detect the problem.
Element 4: Consequences
The consequences element focuses on how the performer perceives the rewards and penalties connected to their actions. It is not enough for consequences to exist; they must be perceived as fair and logical by the people experiencing them. When high performance is effectively punished and low performance goes without consequence, the organization creates a powerful disincentive for quality work.
Common examples include:
- Completing work quickly results in being assigned more or harder work immediately
- High performers are rewarded with heavier workloads while lower performers face no accountability
- Good performance goes unrecognized, leading to burnout or disengagement
Root cause example: A supervisor notices that skilled senior auditors are taking noticeably longer to complete file reviews than in prior years, creating project bottlenecks. Investigation reveals that in the past, completing reviews quickly led to those individuals being immediately assigned higher volumes of complex work, while slower colleagues faced no consequences. The senior auditors consciously slowed their pace to protect themselves from burnout. The root cause was not a skill gap but a consequence structure that punished efficiency.
Element 5: Feedback
The feedback element addresses the information performers receive about how they are doing. When feedback is too general, delayed, or delivered non-constructively, it fails to guide behavior change and allows errors to repeat. Identifying feedback gaps helps supervisors address the actual root cause of recurring problems rather than simply noting the symptoms.
Common examples include:
- Feedback that is vague and does not identify specific behaviors to change
- Feedback provided so late that the performer cannot connect it to the work in question
- Feedback delivered in a way that puts the performer on the defensive rather than opening a productive conversation
Root cause example: An auditor consistently documents testing steps incorrectly across multiple files. The root cause is that the supervisor only provides detailed reviews at the very end of the engagement, weeks after the work was performed. Because the auditor received no immediate feedback during the first week, they repeated the same documentation error in every subsequent file, assuming their initial approach was correct. Earlier feedback would have corrected the issue before it compounded.
Element 6: The Performer
The performer element focuses on the individual's own knowledge, skills, abilities, personal traits, attitudes, and circumstances. Sometimes a performance problem truly does originate with the person rather than with the system around them. However, it is important to rule out the other five elements first, since most performance problems have systemic rather than individual root causes.
Common examples include:
- An employee who lacks the specific technical skills required for the assigned work
- An employee dealing with a chronic health issue that affects consistency
- An employee whose personal situation is affecting their focus or reliability
- An employee who is capable but is simply not putting forth sufficient effort
Root cause example: An auditor consistently fails to identify critical control weaknesses during field work. Investigation reveals the employee lacks the technical knowledge of new regulatory standards required for the audit and does not know what red flags to look for. In this case, providing more advanced software or extending deadlines would not solve the problem. Only targeted training or coaching addresses the actual deficiency.
The Fishbone Diagram: A Tool for Root Cause Analysis
The Ishikawa diagram, commonly known as the Fishbone diagram, is a visual tool for systematically identifying the root causes of a performance problem. Developed by Japanese engineer Kaoru Ishikawa in the 1960s, the diagram organizes potential causes into the categories covered by the six performance system elements: tasks, direction, resources, consequences, feedback, and performer.
For example, under the tasks category, the diagram might branch into technology, procedures, processes, and methods. Under direction, it might show timeframes, expectations, guidance, objectives, and management input. By mapping potential causes visually, the diagram helps supervisors avoid jumping to conclusions and ensures all angles of a performance problem are considered before a solution is selected.
Two Categories of People Problems
Audit supervision challenges involving staff generally fall into one of two categories:
- Job performance problems: These involve the quality or quantity of work being produced. They are typically addressed through the performance appraisal and reward system. If those avenues are exhausted without improvement, disciplinary action may follow.
- Conduct problems: These involve personal behavior at work, such as violations of organizational rules, regulations, or policies. They are generally addressed through corrective discipline aimed at stopping the behavior and preventing recurrence.
Understanding which category a problem falls into is an important first step, because the appropriate response differs significantly between the two. Applying a disciplinary approach to what is actually a performance gap or treating a conduct issue as merely a training need will both lead to ineffective outcomes.
