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KKP1 ( KUIS 11 )

  1. What are three common pitfalls that should be avoided during brainstorming sessions? How can these problems be avoided?

“social loafing,” “groupthink” and “groupshift.”

To solve those problems there are several  ways such as:

Assign homework. The discussion leader should inform participants well in advance of a scheduled meeting that they will discuss fraud risks so each team member can focus on coming up with ideas about how and where the entity is susceptible. Distributing the meeting’s agenda (see the example) will also provide greater context for participants to think about possible fraud risks and will further inform them about what to expect during the brainstorming session. Circulating meeting agendas in advance can be particularly helpful in larger audit engagements with several team members. In contrast, a small firm with only four audit personnel might not need to circulate an agenda before a brainstorming session because it has agreed upon a common agenda to be used across all engagements.

The leader should encourage team members to use the experiences and knowledge obtained during previous audits and recent interactions with the client. Also, he or she should stress that the assignment should not be overly time-consuming; members can be formulating ideas as they perform their day-to-day tasks. Leaders should ask individuals to come to the meeting with a list of their ideas. If leaders believe it would help members who are shy about speaking at meetings, the lists prepared in advance can be discussed or distributed without identifying the preparer.

Establish ground rules. The leader should establish a strong foundation for brainstorming sessions by communicating fundamental ground rules before a session begins: Do not criticize others’ ideas, let each person speak, and try to build on others’ ideas. Audit team members should know what to expect of themselves and others. It is particularly important that all participants feel their input is valued and their voice will be heard. The leader also should make certain that participants understand how the session will proceed and how ideas generated during the meeting will impact the audit.

Some firms schedule stand-alone meetings to conduct the brainstorming sessions. This is most common for large or complex engagements. Other firms allow the brainstorming discussions to be part of a larger initial planning meeting, particularly when the audit engagement is relatively straightforward. When the sessions are part of a larger meeting, the engagement leader should ensure that sufficient time is allocated to this component of the meeting agenda.

Set the tone. At the beginning of a meeting, the leader should genuinely encourage all audit team members, including less experienced staff, to express any idea no matter how unusual it may seem. Because not everyone enters the brainstorming activity with a similar level of knowledge or experience with the client or willingness to share ideas about fraud risk in an open-ended fashion, it is important to establish a comfortable environment. There is no substitute for having the engagement leader stress to the audit team the importance of the brainstorming session, emphasizing that every idea is valued and everyone has something to contribute to the discussion. Demonstrated genuine involvement by the engagement leader will go a long way towards setting the stage for all team members to engage in the activity.

Take a “zero tolerance” stance on criticism. The leader must make it clear that no criticism about any issue presented will be allowed while the group is generating ideas about fraud risks. Imagine the reaction of a new staff person whose manager laughs or rolls her eyes at that individual’s suggestion. Any perception of criticism can quickly shut down a team member’s willingness to participate. Criticism also may negatively affect the efficiency of the brainstorming activity by diverting attention from the risk assessment process to other subjects. With a “zero tolerance for criticism” expectation, the team is less likely to fall prey to the pitfalls noted. Open-mindedness, not conformity, should be the meeting’s goal.

Encourage more not less. Participants should make every effort to generate as many ideas as possible about how and where the entity may be susceptible to fraud and how management might conceal its actions. The greater the number of ideas about potential fraud risks, the more likely the group will accurately identify and assess relevant fraud risks and develop appropriate audit responses to them. If idea generation about fraud risks within a particular business process (for example, inventory management) or account (investments) begins to wane, the leader should shift the discussion to another business process (purchasing) or account (receivables) or rephrase the current question to get the group thinking differently. So, if the group is discussing how receiving personnel might steal inventory and the brainstorming process begins to slow, the session leader might ask participants to think about how purchasing personnel could misappropriate inventory (for example, redirecting inventory orders to unauthorized locations). Reframing issues from different perspectives can be a valuable technique for increasing the number of ideas generated about a particular fraud risk.

Credit the group, not individuals. It is important for the leader to assign credit for ideas generated to the group as a whole rather than to a contributing member. Recognizing group ownership of ideas is more likely to increase the team’s interest and its commitment to its goals than when individuals are rewarded personally.

Manage group size and composition. When determining which members to include in individual brainstorming sessions, team leaders must not only include the ones who will be key to the discussion at hand, but also understand how group size might affect the outcomes. Thus, the number of people participating in sessions may vary across an engagement.

The size of the group affects the structure of the session: Smaller groups (seven or fewer individuals) tend to complete tasks more quickly and reduce the potential for group domination or social loafing; larger groups (twelve or more individuals), on the other hand, are better problem solvers and idea generators because there are more individuals thinking about fraud risks. However, large groups tend to deter certain individuals from participating. Therefore, for some very large engagements, the leader may find it advisable to divide the engagement team into subgroups, perhaps along the client’s business segments, for detailed brainstorming about fraud risks in those segments. Later, representatives from each subgroup can convene to discuss the risks identified at the segment level and to brainstorm about consolidated risks.

For example, when engagement personnel are located in multiple offices, one national firm conducts an initial brainstorming conference call with engagement leaders in various locations working on the client engagement. Subsequent to that conference call, each local engagement leader then conducts brainstorming sessions with his or her engagement personnel. Fraud risk issues identified in local office sessions are discussed in a follow-up conference call involving key engagement leaders from all offices serving the client.

  1. What are three important techniques to improve the effectiveness of a brainstorming session?

Open brainstorming, Round-robin brainstorming, Electronic brainstorming

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