25. Why Most Audit Issues Are Leadership Issues in Disguise
When an audit issue appears, the instinctive response is to look for a technical fix.
Update the policy.
Add a control.
Strengthen documentation.
These actions are often necessary. But they are rarely sufficient.
After years of observing audit outcomes across different organisations, one pattern has become hard to ignore. Many audit issues are not system failures at all. They are leadership signals that have been misclassified as technical problems.
What Audit Findings Really Point To
Most audit findings are framed in operational language. Weak controls. Inconsistent application. Insufficient oversight. On paper, these look like process gaps.
In practice, they usually point to something else.
Decisions that were delayed because no one wanted to own them.
Priorities that were unclear when pressure increased.
Risks that were tolerated because addressing them felt inconvenient at the time.
Audit captures the symptom. Leadership behaviour is often the cause.
This does not mean leaders are careless or disengaged. More often, it means they were operating under sustained pressure and made rational trade-offs without revisiting them later.
The issue arises when those trade-offs quietly become permanent.
The Leadership Behaviours Behind Common Findings
Consider how often audit findings include phrases like “inconsistent application” or “lack of evidence.”
Inconsistency usually reflects unclear expectations.
Lack of evidence often reflects rushed decisions or under-resourced teams.
Weak oversight frequently reflects leaders being spread too thin to engage at the right level.
These are nothing but leadership capacity issues.
When leaders do not have time to reinforce priorities, teams fill in the gaps. When escalation feels discouraged, issues stay hidden. When decision-making authority is unclear, people default to workarounds.
Audit simply documents the outcome of those dynamics.
Why Leaders Resist This Interpretation
It is more comfortable to treat audit issues as technical. Technical problems feel solvable. They can be delegated, remediated, and closed.
Leadership issues feel personal. They require reflection and adjustment. They ask uncomfortable questions about capacity, communication, and trade-offs.
There is also a concern that acknowledging leadership contribution to audit findings undermines authority. In reality, it does the opposite.
Leaders who recognise behavioural drivers behind audit issues are seen as credible. They demonstrate awareness and accountability rather than defensiveness.
Audit committees and regulators notice this distinction quickly.
The Cost of Fixing Symptoms Instead of Causes
When audit findings are treated purely as technical defects, remediation tends to be superficial.
More controls are added without removing old ones.
Policies become longer without becoming clearer.
Responsibility is diffused rather than clarified.
The finding may close. The issue remains.
Months later, a similar finding appears in a different area. Leaders are frustrated. Teams are fatigued. The audit feels repetitive and unproductive.
This cycle is caused by avoiding the leadership conversation the finding was pointing toward.
A Different Way to Read Audit Feedback
Effective leaders read audit reports differently.
Instead of asking, “What control failed?” they ask, “What behaviour allowed this to happen?”
Instead of asking, “How do we prevent this technically?” they ask, “What expectations were unclear or unenforced?”
This shift changes the remediation approach entirely.
Sometimes the answer is clearer delegation.
Sometimes it has fewer priorities.
Sometimes it is leaders being more present in critical decisions rather than adding oversight layers.
These changes rarely appear in remediation trackers. But they reduce repeat findings more effectively than additional controls.
What Audit Committees Pay Attention To
Audit committees rarely focus only on findings. They pay close attention to how leaders respond.
Are explanations defensive or reflective?
Do leaders acknowledge trade-offs or deny them?
Is remediation framed as a checklist or as a learning process?
Committees understand that perfect systems do not exist. What they look for is judgment.
Leaders who can articulate why something happened, not just how it will be fixed, build confidence. Those who rely solely on technical language often trigger more scrutiny.
A Practical Reflection for Leaders
After any audit, consider asking three questions that go beyond the report.
What leadership decisions contributed to this issue, directly or indirectly?
Where did pressure or capacity constraints influence behaviour?
What needs to change in how we lead, not just how we control?
These questions are about learning.
In organisations where leaders ask them consistently, audit findings become less repetitive and less adversarial. Audit shifts from inspection to insight.
Why This Matters for Long-Term Governance
Strong governance is built on sound leadership judgment applied consistently.
When leaders recognise their role in audit outcomes, they move from managing findings to managing risk. They reduce noise. They build trust. They create systems that support people rather than constrain them.
Audit then becomes what it is meant to be. A mirror. Not a verdict.
Closing
Most audit issues are not failures of policy or process. They are signals about leadership decisions made under pressure.
Leaders who learn to read those signals accurately gain an advantage. They fix fewer things, but they fix the right ones.
If you are reviewing audit findings this year, the most valuable question may not be how to close them quickly.
It may be what they are quietly telling you about how leadership is actually happening.
That's all for this week.
See you on Tuesday!
– Jonathan
P.S Many audit findings aren’t really about controls or policies - they’re reflections of decisions made under pressure. If this perspective feels familiar, it may be worth a brief conversation about what your recent findings are quietly pointing to in how leadership is actually showing up. 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.
