AUDITOR THINKING SKILLS

Rudolph C. Hirzel - CQA,CQE, CQMgr

General Manager, IdeaWorks
68905 Cass Street
Edwardsburg, MI 49112
ideaworks@teamsolvers.com

SUMMARY

As students, we learn the mastery of our professions through the study of the methodologies and tools that define
successful performance. However, in the process of learning, most of us fail to consider how we are honing our minds to
think about a given subject. More importantly, we fail to realize that it is our thinking skills that provide the basis for real
long-term improvement. The methods and tools we learn to use as auditors are no different. And their affect on how we
perform audits is just as profound. There are four fundamental thought processes that influence our auditing abilities. These
include induction, deduction, inference, and intuition. Starting with a shared understanding of how audits are performed,
attendees will learn through interactive exercises how these four thinking skills are utilized during each step in the audit
process. Upon completion, session attendees will have developed a solid foundation for further enhancing and improving
both their audit performance and their skills as auditors.

INTRODUCTION

What is auditor thinking? How do thinking skills influence the ways we choose to audit? Most of us have learned how
to perform audits by learning and utilizing a generally accepted set of tools and methods. However, the real capability of an
auditor is not measured by the tools she or he uses, it is determined by what they do during audit conduct. How is collected
information and data interpreted? How does the interpretation influence the next steps the auditor takes? Answering these
questions constitutes auditor thinking, and in a broader sense, can be argued to be the most important skills the auditor has. If
auditor thinking is flawed or faulty, decisions made during the audit may cause time to be wasted chasing non-relevant leads
or may cause the auditor to overlook important findings. This is not to say that the tools and methods are unimportant. In
fact, just the opposite is true because tools and methods support and enhance the auditor’s thinking skills. For instance, the
Checklist helps the auditor build a mental image of what to expect during the audit. And it’s this mental image that helps her
or him identify areas of concern. In fact, findings and nonconformances merely represent areas where observation and/or
information either match or don’t match the mental image in the auditor’s head. Another example of a tool that was clearly
developed to support a thinking skill is in the area of causal determination. This thought process involves sorting through
several pieces of data to determine potential causes for a given effect. The Cause-Effect Diagram (or fishbone) supports this
thought process beautifully. Can we perform causal analysis without the tool? Certainly. Can we use the tool without
knowing the thinking skill involved? Probably not.

UNDERSTANDING WHAT AUDITORS DO

The process of auditing is discussed extensively within the Certified Quality Auditor Body of Knowledge and other
sources such the Auditor’s Handbook. Even so, there still exists some discussion about whether the process includes follow-
up or not. With that said, it is included in this session in order to provide a more complete coverage of audit activities. In
summary, the five steps of the process that will be discussed, in relation to auditor thinking skills, are as follows:

1) Planning
2) Preparation
3) Conduct
4) Reporting
5) Follow-up

THE FOUR THINKING SKILLS

As stated in the summary, there are four fundamental thought processes that form the basis of auditor thinking. Each of
these will be discussed during the presentation with specific examples and exercises provided to explore and learn how these
processes influence audit performance. The following paragraphs include the definition for each of these to assist with
understanding them.
 Induction, “an instance of reasoning from a part to a whole, from particulars to generals, or from the individual to the
universal,” is a thinking process that draws general conclusions from specific information or facts. Inductive thinking
attempts to arrive at a single broad generalization that includes and explains many specific observations in the area of
interest. It is the way that scientific theories are created or, in the context of auditing, general conclusions about a system’s or
process’ performance are derived. Induction has also been referred to as systems thinking or synthesis since it attempts to
look at the big picture rather than focusing on individual components and parts like analysis does.

Deduction, on the other hand, is “the deriving of a conclusion by reasoning or inference by evidence,” and is often
thought of as the opposite of induction because it reasons from the general to the specific. In deduction, thinking proceeds
from existing theories and general concepts to specific facts or solutions. In science and mathematics, it is oriented at
arriving at the correct answer or answers that develop from a theory, and in design, it is the arriving at useful solutions.
Deduction is used in auditing when the auditor collects data or when she or he interviews auditees to prove or disprove a
suspected area of nonconformance. Deduction is a little broader than deduce which is, “to infer (something) about a
particular case from a general principle that holds of all such cases.” However, the two terms are often used interchangeably.

Inference is a general term that includes deduction. It is “the act of passing from one or more propositions, statements,
or judgments considered as true to another, the truth of which is believed to follow from that of the former.” In plainer
English, it is the drawing of a conclusion based on facts or premises. It is used in courtrooms to establish guilt by showing
how circumstances and conclusions in one case lead to the same conclusions in a similar case. It is used in auditing to
establish the basis for finding significance. And it is the thinking skill that helps us determine whether we should investigate
an area further because we recognize circumstances that previously resulted in nonconformances.

Intuition is probably the least understood, and most undervalued, of the thinking skills discussed here. It is defined as,
“a form of knowing that is akin to instinct or a divining empathy, and that gives direct insight into reality as it is in itself and
absolutely.” It is what tells an auditor that a problem exists even though the facts are not evident. And it takes place in our
subconscious when our minds see an incongruity with our mental images. Some may argue that intuition isn’t really a
thinking process at all, however, any experienced auditor will tell you that it is an invaluable skill to have.

Of course, understanding these thinking skills in themselves is not enough. We must also be able to relate them to the
audit methods and tools we choose to use. Session attendees will have a chance to explore these relationships in detail
through focused exercises and interactive discussion.

CONCLUSION

We know that thinking skills play an important part in the auditing process. In fact, as we explore the methods and tools
used to perform audits, we start to understand that they were developed primarily from a need to focus or enhance thinking
skills. So if the auditor wants to improve their performance, she or he needs to consider the underlying thinking skills that
support the methods and tools they use. Currently, there are many challenges facing auditors. As our economy becomes
even more global, as we gain access to vast arrays of information, as our organizations evolve to meet the expectations of
both internal and external customers, we, as auditors, will be continually searching for ways to adapt and evolve what we do.
At the heart of this change, will be the fundamental thinking processes we use. The first step to improving our performance
is to understand these processes. And the most effective way to improve the methods and tools is to base improvements on
better serving the thinking skills they were originally designed to support. In conclusion, the best way to enhance our
learning and abilities is to spend a little time thinking about thinking.

If you want to learn more about the application of these thinking skills to the audit process, join me for a highly
interactive session!