Audits Don’t Fail Companies. Avoidance Does.
When something goes wrong in an organisation, an audit is often blamed after the fact.
The audit was too rigid.
The auditors did not understand the business.
The process created friction.
These explanations are convenient, but they are rarely accurate.
In my experience, audits do not fail companies. Avoidance does.
Avoidance of uncomfortable conversations.
Avoidance of early signals.
Avoidance of issues that feel manageable until they are not.
Audit simply exposes what avoidance has been quietly protecting.
What Audit Is Actually Designed to Do
At its core, an audit is not a test of perfection rather a test of alignment.
Do systems reflect reality?
Do controls match risk?
Do behaviours support what policies claim?
When audit findings surface, they are often framed as technical gaps. Missing documentation. Weak controls. Inconsistent processes. But those gaps usually point to something deeper.
They point to decisions that were postponed.
Conversations that were softened.
Risks that were known but tolerated because there was no capacity to address them at the time.
Audit does not create these conditions. It reveals them.
The Leadership Role in Avoidance
Avoidance rarely looks like negligence. More often, it looks like pragmatism.
“We will deal with it next quarter.”
“That risk is low for now.”
“There is no appetite to change this.”
These statements are not irrational. They are often made under pressure, with limited time and competing priorities. Leaders make trade-offs every day.
The issue arises when temporary decisions quietly become permanent. When workarounds replace fixes. When discomfort is deferred long enough to feel normal.
Over time, this creates a fragile environment. On the surface, things function. Underneath, risk accumulates.
Audit enters at the moment when avoidance can no longer hide.
Why Avoidance Feels Safer Than It Is
Avoidance feels safe because it preserves momentum. It keeps people focused on delivery. It avoids friction in the short term.
Addressing issues early does the opposite. It slows things down. It creates tension. It forces prioritisation.
For leaders, especially in regulated or audited environments, this creates a dilemma. Do you interrupt progress to address a risk that has not yet materialised, or do you keep moving and hope controls hold?
The cost of avoidance is rarely immediate. That is what makes it dangerous.
By the time an audit surfaces the issue, it often appears larger than it actually is. Because it was allowed to exist without scrutiny.
What Strong Leaders Do Differently
Strong leaders do not eliminate risk. They surface it early.
They use audits as a feedback loop. They understand that scrutiny is not a threat to authority. It is a test of alignment.
These leaders are willing to have conversations before an audit requires them. They ask uncomfortable questions when answers still feel manageable.
Where are we relying on people instead of process?
Which controls exist on paper but not in practice?
What are we tolerating because it feels inconvenient to address?
By addressing these questions early, leaders reduce the intensity of audit findings later. More importantly, they build trust. With auditors. With boards. With their teams.
Transparency, when offered early, creates credibility. When forced later, it creates defensiveness.
The Cultural Cost of Avoidance
Avoidance does not stay contained at the leadership level. It signals culture.
When teams see issues consistently deferred, they learn what matters and what does not. Over time, this shapes behaviour.
People stop raising concerns early because they assume nothing will change. Workarounds become standard practice. Control weaknesses are accepted as part of “how things work here.”
Audit then becomes adversarial because the organisation has not practised openness.
This is why the most difficult audits are rarely about technical competence. They are about trust.
A Practical Shift Leaders Can Make
Reducing avoidance does not require perfection, rather a shift in posture is very much needed.
Instead of asking, “Can we get away with this for now?” ask, “What would it cost us if this became normal?”
Instead of asking, “Is this an audit issue?” ask, “Is this an alignment issue?”
These questions move the conversation away from compliance and toward leadership responsibility.
One practical step is to identify one issue currently being deferred and bring it into the open, to name it clearly. Visibility alone reduces risk.
In audit, transparency changes the conversation. Leaders who acknowledge gaps early are seen as credible, not careless.
Why This Matters Beyond Audit
Avoidance affects more than audit outcomes. It affects decision quality, organisational confidence, and leadership credibility.
Leaders who consistently avoid difficult issues eventually lose the benefit of doubt. Conversely, leaders who surface problems early earn trust, even when the news is uncomfortable.
Audit simply reflects this dynamic. It is not the cause but a mirror.
Closing
Audits do not fail companies. They reveal where avoidance has quietly taken root.
The most effective leaders understand this and respond accordingly. They treat audit as an opportunity to realign.
If you are heading into an audit, or reflecting on a recent one, the most valuable question may not be about controls or findings.
It may be this: what have we been avoiding, and why?
That answer often determines whether an audit becomes a burden or a tool.
That's all for this week.
See you on Tuesday!
– Jonathan M.
P.S. One thing I’ve noticed over time is that the hardest issues are rarely hidden - they’re just easy to live with for a while. Audits tend to surface the things everyone sensed but didn’t quite stop to address. If that feels familiar, it might be worth a simple conversation about what’s been sitting in the background and what would change if it were acknowledged sooner rather than later. Reach out to me - I’ll guide you.
Disclaimer: This newsletter is general information only and is not financial advice. Always do your own research and consult a professional about your circumstances.
