Choice vs obligation: motivation shapes the effectiveness of your audit

The motivation(s) for commissioning an audit can determine how effective it will be.

Consider a personal health check-up:

• Sometimes we undergo medical check-ups because we don’t have a choice. We need to - for example for workplace requirements or for insurance.
• At other times, we choose to undergo such check-ups. We want to maintain optimal health and catch any potential issues early.

Often, our approach differs depending on whether we are forced to, or choose to.

The motivations – need vs want – can define how we prioritise them, what our interactions with the medical professional are and how we view the results.

Our engagement and satisfaction levels are generally higher when we choose (than when we are forced).

The same holds for audits.

Podcast icon Listen to the audio (human) version of this article - Episode 2 of Algorithm Integrity Matters

Need (have to, forced to, no choice)

With AI and algorithmic audits in financial services, needing an audit arises from external requirements.

These can include:

• Regulatory Requirements: Legal mandates that enforce audits. For example, those imposed by regulatory bodies to ensure compliance with laws or standards.
• Contractual Obligations: Conditions in contracts with vendors or customers. For example, agreements that require audits to verify the integrity and fairness of algorithms.

When an audit is driven solely by need, it can lead to a transactional approach.

The focus may be on merely fulfilling requirements, rather than leveraging the audit for broader benefits.

This approach might not maximise the potential insights and improvements that the audit can offer.

Want (we choose to, because it is the right thing to do)

Wanting an audit, on the other hand, is often driven by internal motivations.

These can include:

• Enhancing Organisational Credibility and Trust: Voluntarily seeking audits to build trust with stakeholders.
• Improving Internal Processes: Using audits to identify inefficiencies or biases.
• Enhancing your trust, as a leader, in your systems: Audits, when done correctly, delve deep into algorithmic processes. In doing so, you find the weak spots. You now know what you can trust. Importantly, you know what to work on to increase your trust in the systems that you rely on.

When an audit is desired, the audit process becomes more dynamic and beneficial (and a lot more fun).

This makes it more likely to uncover valuable insights and opportunities for improvement.

Need + Want

More effective audits can also arise from a combination of need and want.

When we satisfy a need – for example, regulatory requirements - but simultaneously see the benefit of using the audit for more than mere compliance.

This dual motivation encourages a view of the audit as an opportunity for growth and improvement.

Understanding the difference - needing vs wanting an audit - is crucial

It is difficult to achieve optimal outcomes with an audit that we don’t want.

It's also harder - for you and the auditor.

However, seeing the audit as a beneficial opportunity can be a straightforward shift.

By recognising the value it can bring and actively engaging with the process, you might discover that the experience is more rewarding and insightful.