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Unpopular with the teams

31 Dec 08

Auditors don’t have to perform in front of thousands of hostile supporters, but Brian Glennie finds that they often resemble referees as they struggle to persuade people who believe they are deeply biased to stick to the rules

by Brian Glennie

It’s a funny old game, auditing. A game of two halves, you might even say – one minute you’re over the moon, the next sick as a parrot.

Okay, you may not have to put up with thousands of people questioning your parentage every Saturday afternoon, and you don’t have to attend cliché classes, but there are some uncanny similarities between the role of auditor and that of another increasingly maligned professional group, the football referee.

When Team Audit plays, it often finds itself embroiled in a strange, love/hate relationship. The funny thing is that the team that regards itself as the opposition is supposed to be on your side – your client’s finance team.

And while supporters of football clubs across Scotland have expressed their concern at what they see as the falling standard of top-flight officials in this country, professional auditors have also come in for some stick.

So let’s look at some similarities. Referees pass a written test and are left to it. Just like auditors, the focus of their role is the interpretation and application of the rules and this is continually refined through professional development. However, just like good referees, good auditors understand that the relationship with the business and people in it is crucial to leaving the right kind of lasting impression. In their book Leading Edge Internal Auditing, Jeffrey Ridley and Andrew Chambers list key attributes of world class auditing, including:

• Being close to the business;

• Providing solutions;

• Being change agents; and

• Customer focus.

In other words to be truly effective, auditors need to have excellent people skills and they need to use these skills to build a constructive relationship with the client and ultimately to influence the way that the client thinks and behaves. Improving and developing communications and people skills should be as vital to an auditor as technical skills.

Similarly the best referees are those who communicate best with players and officials, who exercise strong people skills and who “manage” their way through the high pressure situation of a game.

There is a need for auditors and referees to stay abreast of ever changing rules and to deal with clients/players and managers who have a more basic understanding of the laws. This leads to misunderstanding which can eventually lead to conflict. Again, football referees are often left frustrated at the lack of understanding of the rules of the game exhibited by players, managers and, of course, the army of media pundits.

In the same way that football clubs view football referees, clients often see the auditor role as one that challenges “the way we do things around here”, exposes their ignorance and costs them money. Football teams, like businesses can also take the view that the authority figure does not care about the business as much as they do.

In the current economic crisis, some MPs, plus some national newspaper columnists, have demanded that something be done about bank auditing and the auditors. There is the opportunity for a lot of finger-pointing to take place.

There is also an image problem – just as football referees are a necessary evil who spoil a decent game of football, auditors have to deal with the perception that they get in the way of business and provide little real value to it.

We live in an increasingly litigious society and fear of litigation, coupled with new corporate reporting legislation, is cranking up pressure on auditors to get it right. Auditors could be open to legal action from all sides in the event of a major audit failure, if the Auditing Practices Board decides to remove the Bannerman statement, which auditors have used to discourage third parties from relying on the audit, and so pursuing legal claims.

Like referees, auditors are required to lead a process, so maybe there is also some value in comparing leadership qualities on the pitch with those in business. Indeed there are some fundamental similarities. For example, both have to deal with different (and often competing) views by making important decisions. Both try to do this through the use of a framework of rules, and both are ultimately given the scope to wield power and exert authority as part of their role.

A look at the list of 34 Grade 1 referees in Scotland provides some clues to the leadership style of the whistleblowers. Two-thirds of the referees are what could be described as “technical specialists” – they work in areas such as finance, as well as in the legal and public services. To be successful in these areas, people have to be fundamentally motivated by the need to get it right, to correctly apply the rules of the game. Typically, they work to very high standards, have an eye for detail and can often somewhat perfectionist.

So far so good, this sounds like the DNA of the ideal referee. The interesting stuff starts when we look at the downside of being a technical specialist. Perfectionism can become control freakery, high standards can become pedantry, and the person can be perceived as cold and aloof. They are not comfortable with conflict and can resort to using the power of their position to get things done.

Sound familiar?

Of course, there have been exceptional exponents of the referees’ art. Pierluigi Collina was recently asked how he managed to always maintain his authority with players when refereeing. Collina, who was consistently described as the best referee in the world before he retired, replied: “You have to be accepted on the field of play not because you are the referee, but because people trust in you, the players trust in you. It is a matter of credibility and trust much more than authority.”

Our own refereeing legend Tom “Tiny” Wharton, was a Grade 1 referee for 20 years before becoming chairman of the Scottish Football Association referee supervisors’ committee in 1990, a position he had held for 14 years. Such was his standing with FIFA that the game’s governing body awarded him its order of merit in gold in 1992.

When describing him in an obituary, Bob Crampsey highlighted that two of his great attributes were the ability to defuse potentially difficult situations and his strong belief in a common sense application of the rules.

What Collina and Wharton knew instinctively was that although applying the rules of the game was paramount, how this was done was often the determining factor between success and failure. The business world is starting to understand this too. A recent trend has been the development of leadership qualities and behavioral skills for those who have responsibility for other people, with successful businesses moving beyond simply providing training in the technical aspects of the role.

Maybe the SFA could look to doing likewise for the men at the business end of our great game.

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