July 19, 2012 5:45 AM
Interesting tidbit (and relevant for internal audit) from an article in the latest Economist on how taking time to make decisions results in getting the ethics right:
Slowing down makes us more ethical. When confronted with a clear choice between right and wrong, people are five times more likely to do the right thing if they have time to think about it than if they are forced to make a snap decision. Organizations with a “fast pulse” (such as banks) are more likely to suffer from ethical problems than those that move more slowly… The authors suggest that companies should make greater use of “cooling-off periods” or introduce several levels of approval for important decisions.
Several levels of approval for important decisions sounds like a fantastic idea to me. What I find is that too many decisions are made or approvals given orally in meetings, with scant evidence to support their existence later, in case of an audit. Surely introducing more rigor around this aspect of approvals would further improve ethical behaviour!
Delay even works in fields where time might seem to be of the essence. Doctors and pilots can profit from following a checklist, even when doing things they have done many times before. A list slows them down and makes them more methodical, as Atul Gawande describes in “The Checklist Manifesto”.
Now you’re beginning to see why this article prompted me to write a blog post for the first time in umpteen weeks! Not just levels of approval, but checklists too? Be still my beating heart!
Auditors have been employing checklists to improve quality for eons. It’s great to see articles like this extolling their virtues to all people and for all tasks.
Originally posted on Neil McIntyre's Blog
I’m a CA in Toronto working in internal audit for a national retailer. I used to work for BDO, a mid-tier accounting firm. I blog about how technology is changing the fields of accounting, audit, and tax, and how innovative professionals are harnessing emerging technology to do better work.
Posted by Sue Ansell at July 19, 2012 5:45 AM