The term “audit masquerade” has emerged from the financial sector to describe the phenomenon where audits become choreographed performances of good news (or at the very least, not bad news) to mask the true picture of an organisation’s performance. This practice undermines the benefit that can be gained from a truly independent audit process, and poses a risk to the organisation as it gives a false sense of security as to the real state of play in safety performance.
The masquerade can be prompted by a range of factors including Managers’ and Supervisors’ desire to be seen putting their best foot forward and not receive any ‘red marks’ on the audit report. This desire can become pressurised when the audit outcomes are tied to KPIs, performance evaluations, and even financial incentives. This Management focus can often foster an organisational culture of defensiveness, as embodied within a ‘not me’ response and a reflexive push-back when issues of concern are raised in an audit.
Another facet of the masquerade is the subtle ‘creative accounting practices’ when it comes to incident data and workplace risks; that is, applying exclusions to specific incidents to achieve a better frequency rate, or downplaying the seriousness of a safety risk so that it doesn’t trigger Senior Management notification. Again, these are often connected to the pressure to achieve a KPI.
The repercussions of the audit masquerade impact on the workplace and the workforce as they come to believe their own spin, sitting comfortably within the outcome of the choreographed performance. But this ‘warm and fuzzy’ approach creates a false sense of security which belies the fact that in reality, there are hazards in the workplace that are unchecked, systems and processes that are not working, and risk exposures that are emerging. Additionally, corrective/preventative actions and potential funding to address the real health and safety issues and risks don’t get identified as being required.
At the heart of the masquerade lies a failure to recognise the importance of the independent auditing process. Audits are ideal opportunities to address system gaps and failures BEFORE these result in a person getting injured, or worse. True leaders welcome an independent assessment of their system’s functionality. They want to know the real picture.
The practices that contribute to the audit masquerade represent a major risk to an organisation, as it subverts and perverts the reality of workplace safety performance (and this risk is not commonly identified on risk registers). Only through concerted efforts to reinforce best practice auditing processes and the fostering of a culture of integrity, transparency and accountability can the truth emerge, and the organisation get full value out of the independent audit process.
Please contact QRMC for more information or assistance.
