The Institute of Internal Auditors presents all things internal audit tech. In this episode, Andrew Gus talks with Alex Che about the importance of emotional intelligence or a queue in the internal audit profession, especially in the context of AI advancements. They discuss how EQ can enhance internal audit effectiveness, the role of empathy and communication, and the impact of cultural differences on eq. From active listening to handling difficult conversations.
This episode unpacks the human side of internal auditing. Hey Alex, thank you so much for joining us today. Can you start with defining emotional intelligence EQ and why it's particularly important for internal auditors? Good question. Thanks for the opportunity. Yeah. First of all, I think AI is automating and making it very easy for all of us to get the information that we need contextually. So for example, you know, my team's work on audits of information security.
It's very easy for my 22-year-old coming into the workforce to be able to learn as much as I know in the next two, three years using ai. The importance at this point in terms of emotional intelligence is to be able to connect the dots. I think, you know, AI can automate the piece that talks about information, but if you've been in the working force for a long time, then you can be able to connect the dots better. So EQ in this case is a emotional component of it.
Once you master your own emotion, you know what you do and how you do it very well, and then you could be able to connect with other people as well. Very nice. So with the rise of AI and auditing, how do you see the role of EQ evolving within the profession? There's a need for us to make sure, at least we dial up EQ as much as possible.
I always tell my team that in the next couple years, there's gonna be a point where we'll do a 10 day audit, you know, place where you click the button and it gives you the whole report. We are very close to that, given the technological advancements that we have. But what happens is that once you have that information, then how do you socialize that information and the output of that information You need to be able to connect the dots.
You know, there are instances where you have something, it seems right, based on the output of a technology, but you always wanna step back a little bit and connect the dots and say, who do I need to talk to? Do I need to talk to John next to me who might know something else on the cybersecurity side that I haven't considered? Would I need to be able to connect the dots on what's happening in the industry to make sure at least it's complete and accurate?
In terms of reporting, it's really, really important for us to dial up eq. So AI is transforming many aspects of internal audit from risk assessment to fraud detection. These 10 day audits like you're talking about, what are some areas where human judgment and EQ remain irreplaceable? The training of AI is really, really important for us to be in the loop. So it's a concept of human in the loop.
You need to make sure, at least at the beginning as you're training the technology that you're present and you're engaged enough to be make sure at least it's answering the right questions. There's also an aspect of making sure that at least it's reasonable in its output that will always be there. It gives you something you wanna make sure it's right. I'll give you an example of maps.
Sometimes I click on something, I'm going to Disney World, we're in Orlando right now, and I know it's left, right, left, but maps is telling me something different. You always have the option of overriding that based on your personal knowledge on something. So, uh, human in the loop will always be, uh, needed along the way, first of all to train and then to continuously train and fine tune the results of what you're looking for.
So how can auditors balance techno expertise with soft skills like empathy, self-awareness, communications in this AI driven environment, Continuous practice? You know, I think continuous practice is just being present. I think from an audit shop perspective, we should also have some sort of soft skills training.
I'll give you an example. In our audit shop where we require folks to do about 40 hours of training, 40 hours of training, 20 of those should be on soft skills negotiation, clear communication, uh, leading with empathy. That should be very, very important as important as the technology side of things. So being intentional and then practicing that intentionality after that. What are some practical ways auditors can use EQ to bridge the gap between the AI insights and stakeholders engagement?
There's always a painful period where you identify issues and you're trying to socialize the issues with the business area, and this is where you need eq. I heard this quote yesterday is that you should always lead in, not with an exclamation mark, but question. So for example, hey, I'm seeing this in the data trends. What are your thoughts about this? As opposed to, Hey, everything is broken. Let's go ahead and fix it. You need to be able to fix this. This was broken six months ago.
So I think leading without emotional intelligence helps a lot. You know, also just putting yourself in the other person's shoes, understanding where they're coming from. It's really, really important. Sometimes auditors have been told they're a little bit more robotic, so just pausing a little bit and just understanding what the other person is feeling at that moment. Reading the room helps a lot, and that comes in with a little bit of mastery of yourself and then mastery of your audience.
So kind of going off that basis of mastering this EQ and this emotional intelligence, how did you in your career go about mastering these concepts? Uh, on a personal level, uh, I played rugby. Growing up, rugby is a team spot. It's all about making sure that at least you are passing the ball and how do you pass the ball? You pass the ball by having conversations and if you, the term that's used, if you wobble, if you wobble, you don't do it right, someone is not gonna pass you the ball.
So there's a lot of communication that happens off the pitch. So part of that was making sure at least you're developing that EQ and seeing the body language. If I pass the ball to someone and they wobble or I wobble, I can see how p****d off they are. Uh, so growing up from a team sports perspective and also raising my own kids, where I coached basketball, I was able to learn, it's all about communication and being engaged with one another. That's how you win.
So transposing all of that into the working world. I've spent time on not just the third line, but I've also spent time on the first line and the second line. What that means is that I'm able to see how the other folks are thinking at a point in time. As a third line function, we have a lot of power. So if I understand what the person coming in, the controller coming in, the thought process, when you have some significant findings, I can say, Hey, let me just take it a little bit easy.
Let me have some small talk at the beginning. Let me understand their perspective first. And that goes a long way. So in my personal life growing up team sports with kids, I was able to make sure at least that was uh, fostered within the team. And then also in my professional career, I've been able to see all sides. And where I sit now as an executive, I can be able to look down and see people who are successful are the people who dial up the EQ more than just dialing up the iq.
IQ will only get you to a certain place. Having some sense of EQ gets you further and even more so. Now, Kind of going along the lines of this eq and we're kind of transitioning a little bit, talking about these findings that you have in these audit reports. Do you find that you and, and kind of going along the line of success career-wise, when you have high eq, do you find that your audit finding communication is more successful when your team imposes better eq?
Generally, yes. But it depends with the audience as well. It's always good to dial up your EQ a hundred percent of the time that you're in there and engaging with them. There are times on the other side, they want facts, so stick to the facts as much as possible, do the best that you can on your side. But the other side sometimes might play hardball, but if you continuously dial up your eq, it helps. But to answer your specific question, yes, EQ always wins.
Do you feel that you get better experience EQ wise with the training or more hands-on experience by being in some of those first line second line roles? Training helps. I also do a lot of observing. I learn people, I learn when people are presenting. I learn people who are actually non auditors, even more, you know, the best people to learn from are salespeople. When you go in and they're leaning in and the way they're asking certain questions, it helps you actually be.
So once you are conscious about what it is, then you can be able to observe and learn from it throughout your life. You can be able to see things that people are doing much better than others. Do you find that some of the AI driven audits when layered in with our, the, the personal element of it, the emotional intelligence of a human being drives a better audit than just the human alone or just the AI alone?
Absolutely. If you layer in aq, you're gonna be very, very successful on this because AI tells you something, then what do you do next? With that, you wanna be able to provide a little bit more context. In this case, what I'm looking for is anomalies in, for example, payable process. Then what does that mean? What's a big picture? You can always get that information from ai. It'll give you the information, but it's gonna be generic.
You have to customize it to your audience the best way that you can. And again, it comes back to if you master yourself and you know yourself well, then when you're engaging with other people, you can be able to engage with them. Right. Is there a specific training program or website, something that you would recommend people to, to go to for emotional intelligence? I think Carnegie Mellon has a couple of them, but just being a continuous learner helps a lot.
I can't think of any at the top of my mind, but Harvard, a business, uh, has a couple of, uh, white papers that they've come up with that really, really help. I also listen to a lot of speakers. Uh, I listen to a podcast Diary of A CEO. It's a British guy. He brings in a lot of people who speak, uh, about EQ and the importance of that. You know, grew up with Oprah, listen to Oprah all the time.
She talks about life. Uh, and one thing that you see consistent is that the people who make it are the people who are intentional about eq. And it's even more important right now. The currency of information is gonna be zero. So you and I, let's say we're going to audit something new. Uh, we can get up to speed to it, you know, in two, three hours you could have a, an audit program. I could have an audit program, but the way you, you and I will win is the connections that you have.
The ability to rise up from where you're sitting and going in and talking to John next to you, uh, or talking to Sally on the other side or making a connection with a conversation that you had a week ago. That helps When it comes to audit issues and working with people, coming up with the remediation plans, do you find it is easier when there is high emotional intelligence involved in the conversations? I wouldn't look at it high emotional intelligence or not.
I think, you know, in any engagement that you get into, you always wanna think about what you can do as a person. It's always a very sensitive subject. When you come up with issues, you don't know how someone is going to to react. Uh, you also don't, if you've ever been audited, you know how it feels and everyone is tense and it's very easy for people to not react the right way. So that might not showcase the best eq, uh, in that case.
Uh, but what you can do on your side is just be the best that you can on your side. Dial up the eq, understand, you know, lead with empathy. Understand where they are at a point in time and that's what's going to solve the problem. Sometimes when people get feel seen and heard, it helps a lot. When I say, Hey, this is, uh, a couple of opportunities to improve our process, that changes. If I say these are findings that we need to fix immediately, that changes the tone.
So the choice of words and also leading with empathy helps a lot. And that's all about eq what you can do on your side. It's amazing. You know, sometimes you get into an engagement in the first two minutes, you just have small talk. I'll talk about my kids, I'll talk about the game, or I'll just smile and take it easy and say, Hey, we're all solving this together. Small words can change the direction of where you're going, uh, in terms of that conversation.
So going back to your question is focusing on yourself and the intentionality of dialing up EQ at every moment you engage helps a lot. Do you find that even like, I know we've been talking about like the backend of the audit kind of more in the reporting process, but taking it back to, to the front side of the audit and the planning.
Do you find that when emotional intelligence is incorporated that you kind of, uh, maybe you're offered more information from people because they feel more connected on a a personal level? Uh, yes. You know, the idea is always to be nice and engage and be present and make sure at least you are listening in to what the stakeholders are letting you know. Uh, at that moment in time, if people feel seen and heard, then they engage. If you don't feel seen and heard, they don't engage.
So it's not a switch on and off, I'm gonna dial up my emotional intelligence. It's just be as nice as you can at the front end. And then, you know, you'll, you'll be able to receive a lot of really good insight. Sometimes they tell you, Hey, there's nothing in here. Sometimes they just let you know, Hey, I think I'm worried about this. But that engagement does not start at the moment in time that you're doing the audit.
Sometimes it might, you know, but you wanna make sure at least it's a continuous engagement that helps you with the relationship building. So when I'm coming in, I'm saying, Hey Mike, I'm here. Uh, and we are looking at this most of the time they'll say, you know what? I know this person and this is what they do. Uh, and they're focused on looking for opportunities as opposed to just finding things. So change of words, change of engagement goes a long way.
We talked about kind of just opening a meeting with maybe a couple questions. I know everyone always talks about like, oh, it's so annoying, all this small talk. But do you think that small talk is essentially the, the gateway to starting that emotional intelligence Word choice is the gateway into emotional intelligence and just strategizing the meeting that you're getting into?
I'll give people, I always tell folks this is that whenever I work for with stakeholders in other countries, I always try to learn a little bit about the culture. If I'm working with people from the Nordic countries, let's say, uh, Germany, uh, Denmark, it's different. The small talk won't cut 'cause you're wasting my time. If I'm working with my stakeholders, let's say in India or in Africa, it's really, really essential for you to have that connection. Even in the US it's the same thing.
If I'm talking to someone in, uh, Tallahassee, you know, compared to someone in Chicago, it's gonna be very different. Or New York it's gonna be very, very different. So just knowing how to come into the conversation with strategy on how to engage helps a lot. Word choice means a lot too. So it sounds like emotional intelligence goes beyond just the words, but also understanding the cultural norms with whom you are working with.
Yes. My team is multi-generational and I love it 'cause I see myself in each one of them. So I'm able to engage with them the way things were. So coming up, things were very formal. So in as much as you want to dial up the informality with eq, some people are never gonna be, they still want the formality, Hey, my name is this and this, this is what the agenda is. Uh, the younger generation might start a little bit different even before they start.
They might be sending a chat message to the person on the other side and in that case they're already engaging. So by the time they come in, Hey, good to see you. Did you go to surfboard over the weekend? You know, how was it? And that's the engagement the way of, of, of being able to engage. So it's also multi-generational, but it's also something that I always say is that it's not one and done in terms of learning. It's continuously learning and engaging with people.
Kind of going along those lines of the multi-generational, I know the talent pipeline for, you know, audit in general, everyone seems to be very concerned about that. Um, from the AI side, I think the consensus is that they'll be fine using ai. Do you feel any concerns with their emotional intelligence side or do you think that they may be beyond some of the other generations that were not used to that kind of, you know, atmosphere in the workplace?
Great question, Andrew. Uh, and I think the way I would answer it is that every generation knows how to engage in their own way. So it might not be my formality where I come in and the first minute I'm dressed up in a certain way, you know, I, I give the millennium smile. Millennium smile is where you have a couple seconds and you smile. Compared to the new age where they shake their phone a little bit, lemme tell you something, you know, I'm sorry, I'm, I'm just going all over the place.
I work for meta, which to do it. So I'm, I'm, I'm, I'm very engrossed in this. And also the new generation, they also learn how to engage with each other different ways. All you have to do is just make sure that at least there's intentionality in learning what is working in terms of currency at a point in time. And the way you do that is by make sure that at least you're encouraging people to master their skills and who they are and how they engage and then know how to engage
with people on the other side. Yeah. So leading a multi-generational team, what components of emotional intelligence do you think are of the utmost importance? Learning from each other and learning from one another? It's really, really important to do that. Our audience stakeholders are also becoming different generation. They're multi-generational.
You might go into an engagement, you find it's, hey, it's a group of engineers, 25 year olds, and they build something that's really impactful and that's why we can, we need to lean in. If they say UNC doesn't have reason, I need to know what that means. 'cause that's really, really important, uh, for me and not get offended. It's a compliment. And I say, oh, but an has a nice watch, you know, nice piece, whatever it is. Engage with people at the right level.
So learning how to engage with each other is really, really important. So we keep talking about like the data and ai, it's gonna empower people to do all these things, but the emotional intelligence piece seems like it's, it's the missing puzzle piece to kind of carry us forward. I think it's a piece we're not paying as much attention to, like we should. Connections are always gonna be there and we'll learn the currency. It's like AI was actually, you know, interesting anecdote.
AI was able to do a graduate level exam and pass I think 98%, which is one of the toughest exams that you ever had. And it's learning and it's getting better and better every day. I think the exam was in statistics, so something very complicated that it wasn't able to do that. But in six months it's been able to learn how to do that. So you can imagine information is gonna be available to all of us.
We all do this. You have a cold, you have a cough, you go to your laptop or, and you already diagnosing yourself. I'm like, oh well I do this, this, this. So this is what it is. And doctors are already facing that. So it's the same thing in a work environment. When I leading a multi-generational team, someone comes in and says, Hey, uh, I want you to look at how to audit this in 15 minutes. Hey Alex, do you wanna look at this? I already have a plan how to audit.
Like I wouldn't doubt them 'cause the information is available to all of us And it's on us to take that emotional intelligence, meet our future teams of our auditees, where they're at to get the results that we actually need in the end. Yes, being a little bit more intentional in incorporating the concept of emotional intelligence is really, really important. Because also what happens is that the machines are telling you, oh, data is telling you something. You don't wanna be robotic.
As you are passing on that information to someone else else, Hey, be a little bit empathetic. Maybe there's something that you don't know that they know. And that's where the emotional intelligence comes in. And going back to your specific question, it is good for us to be intentional about teaching people about technology and its capabilities, but also making sure you're teaching people on the EQ side of things, being intentional about it.
So it seems like the data's gonna be there, but what's actually going to drive the change is us. Yes. And our ability to drive the change will be determined upon our emotional intelligence status. Yes. And, and as a leader, uh, any leader coming, you know, coming up, you need to be able to focus on this because if you're not, then you're not going to be as impactful as you expect. And going back to the whole talent war concept, you know, not too many people wanna be internal auditors.
Apart from being internal auditors and meta internal audit shop where we do cool things, uh, no one wants to do the old school kind of thing. So the only way that you can attract and retain is making sure at least people can be able to engage with one another from a human level Going through the planning process of an audit, you get up to that point where you gotta eventually meet with some people. You gotta go through their process with them. Gotta go through the dreaded walkthroughs.
Uh, how do you feel that emotional intelligence either helps or hinders a walkthrough? Any engagement that you have with someone, uh, especially when they think you're coming in to find something. The traditional audit mindset. So every time you engage with someone, especially as an auditor, you should always be aware that there might be an instance or instances where they're thinking that you might be looking for something to find. You're finding something in, in the processes.
Uh, so it's important for you to have that perspective at the back of your mind and therefore just be a little bit nicer. Kinder as you're engaging, do your homework as you need to, especially before you do walkthroughs. If I send you documentation, read the documentation ahead of time. Again, the idea is to become as frictionless as possible. Especially when you're engaging, uh, with your stakeholders.
Some of them who've been working with you as much as possible, some of them who are new, uh, to engaging with internal audit. Any amount of friction just doesn't work out too well. And therefore, for you to be frictionless, that's where you dial up your emotional intelligence. How nice can you be? How engaged can you be? How can you lead with empathy? How can you listen in a little bit more? How can you understand their process from their perspective versus your perspective?
How can you do a little bit more, more homework and be more strategic in how you engage? Those are things that you are all supposed to, we all supposed to do to engage and make it as frictionless as possible. And then once we engage, you know, we'll engage the right way. Sometimes in the era of ai, what you do is that you can do a little bit of pre-work.
You identify a process flow that's not right, and then you come in and just put it on Zoom or somewhere and you're like, Hey, this is what your process is. No, that's not the right thing to do. Do a little bit of homework. Just find out is it true what you have, uh, before you start sharing with someone else because it can p**s you off. If someone says, this is what your process is, Andrew, you say, Hey, this is not what I do. I do standards and this is a methodical way of getting to standards.
We do a lot of sourcing from all the stakeholders and then we aggregate that information. We vet that information with industry experts before we publish. If I say, oh, your process is just vetting with industry experts and take no, you're like, no, it's a lot more elaborate on that. So doing a little bit of preparation helps a lot.
Sometimes it seems like the audit meetings are going off the rails and no matter what you are doing, the auditee is just, or the stakeholder is just clashing with you left and right and you can't make any traction or any progress in your audit. How can you use emotional intelligence to help get things back on track? Lead with empathy. Always put yourself in their shoes.
And sometimes, and most of the time they're not in a good place in terms of maybe you're disrupting their day-to-day activities. Maybe you're asking more questions than you, you know, typically would. Maybe they answered all the questions to someone else. So I think leading with empathy helps a lot. And friction will always be there to some moment to some. But if there's anything that you're gonna adjust on your side, 'cause that's a piece that you can control, go ahead and focus on that.
Very nice. Well Alex, I wanna thank you for taking the time to join us today. Talking about emotional intelligence. It was fun, you know, uh, hopefully by the end of, you know, 20 25, 20 26, this is gonna be a subject that everyone will be talking about. It's important for us not to just dial up the AI and IQ side of things, but also to make sure at least the EQ is not left behind.
We wanna be able to connect with each other the same way we've always connected each other to make sure at least we have the right amount of impact to continue adding value in anything that we do either professionally or personally. Perfect. Thank you. Small internal audit teams boost your efficiency at the 2025 audit sphere. This one day virtual conference on June 17th offers expert strategies and practical tools just for you. Register now@theiiaa.org.
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