Constructive Auditing and Reduction of Auditing Expenses by דוד אברמוב DAVID AVRAMOV - Illustrated by David Avramov -
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Constructive Auditing and Reduction of Auditing Expenses


Artwork: David Avramov

מייסד ויו"ר תנועת כמוך, כיום נשיא התנועה מייסד הרשת החברתית העולמית לתרומה לקהילה - לאדם לחי ולסביבה יזם Read More
  • Joined Sep 2015
  • Published Books 23



The IIA Office of Internal Auditors



I am honored to send you an article/manifesto I wrote, which I believe will contribute to the transition of the auditing concept into constructive auditing. In my past I was a member of the Israeli Office of Internal Auditors and was privileged to receive internal auditing guidance from the office during my 30+ years of working in this profession. My experience includes the fields of operational auditing, financial auditing and auditing of computerized information systems.

It is my aspiration that the attached article will assist you in preparing new binding guidelines for all who occupy the auditing profession in general, and internal auditing in particular.

I am at your service for any inquiry free of charge.




I wish to inform you that I am also sending this article in Hebrew to the Israeli Office of Internal Auditors and to the Israeli Institute of Internal Auditors (IIA).


I am at your service for any inquiry free of charge.

[email protected]


Constructive Auditing and Reduction of Auditing Expenses

This e-book was written by David Avramov for the purpose of sharing his insights on the subject and the techniques he developed with all who take part in the auditing process, including CEO’s, Auditing Committees of Directors in the public, government and private sector. The book’s objective is to promote constructive auditing without making the auditing unprofessional.

David Avramov had worked in the field of operational auditing, financial auditing and auditing of computerized information systems from 1976 through 2014.




The definition of the internal auditing profession as put forth by the IIA (The Institute of Internal Auditors) is as follows: Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.
A link
to an article regarding the IIA’s international standards for the professional practice of internal auditing, translated to Hebrew by the Israeli IIA.

A link to an article regarding the professional standards and regulations set by the Israeli Office of Internal Auditors.



Examination of these standardization articles leads to the conclusion that they do not address the issue of “Constructive Audit”, which is problematic in my opinion. However, it’s never too late for a change in perspective.

How is the internal auditing perceived by the auditees? It’s true that every individual responds differently, yet most auditees tend to define the audit as destructive and hurtful, even if not directly.

Some background on the subject of “constructive auditing”

Tali Bardugo claims that “enlightenment”, constructive auditing and feedback are all basically the same. It doesn’t matter how you name it, criticism is always difficult to give and receive.

The primary aspect is to know how to receive an audit, for when you receive auditing well, naturally it will become easier for you to give a constructive audit.

Constructive auditing is a “tango” which requires two sets of skills: The ability to be an auditor and the ability to be an auditee.



The full article

Idit Flick claims: Receiving an audit can sometimes create an internal process of self-flagellation, which can cause a bad mood or even depression. This happens as a result of the incapacity to deal with the audit or the degradation it involves.

Do you know anybody that doesn’t get emotionally involved when being audited? Some people can receive slanders and still keep their cool, while others get seriously offended. The difference between these two reactions depends on the person’s interpretation of the audit: as an offensive insult or as a chance to improve.

The full article

Eliad Cohen addresses the subject of constructive and destructive auditing in his article “Constructive Auditing/ Negative and Destructive Auditing – How to give a constructive audit and not a negative audit?”



The full article

Ze’ev Greenwald writes about creating a constructive audit in the family aspect.

The full article

Heli Barak writes about giving constructive auditing to children.

The full article

Tali Bardugo presents certain questions in regard to auditing life partners and children:

  • What is the fine line between a constructive audit and a destructive audit?

  • What are the key elements that (almost) always create a constructive audit?

  • What is the “Sandwich Method” and how are compliments related to auditing?

  • When should you never audit a person?

The full article



Wikipedia’s definition of constructive auditing

The full article

From “Constructive criticism is a communication technique intended to identify and find solutions to problems in a positive way”.


All of these articles teach us that constructive auditing has a number of key features:

  1. It is a process.

  2. It is a form of communication.

  3. It includes valid opinions.

  4. It includes reasoned opinions.

  5. It includes both positive and negative remarks.

  6. It is given in a friendly manner, without threatening or provoking the auditee.



I’ve been privileged to have more than 30 years of experience in operational auditing, financial auditing and auditing of computerized information systems (in the public, government and private sector – at Discount Bank, The Bank for Industrial development, The First International Bank of Israel, AFI Group, The Israel Land Authority, Comsec Consulting and as a freelancer).

I believe that constructive auditing is based on good interpersonal communication that establishes cooperation with the auditee. The concepts and principles of auditing must head in this direction, and so must the auditor who represents them.

This transition involves primarily a change in perspective of both the auditors and the auditees. This point of view does not degrade the importance of professional auditing. On the contrary, it converts the audit into a tool that promotes efficiency and savings on all levels of the audited organization.



By applying the technique of constructive auditing one can generate a reduction of auditing resources without causing damage to the auditing system and the organization’s conduct. Furthermore, if the management of an audited organization would instruct its’ employees and managers to outline their “organization and methods” procedures, mutual auditing between different departments would be enhanced, allowing the saving of resources.

It is my resolute opinion that the constructive auditing approach must be integrated into all training disciplines of internal and external auditing. Furthermore, all organizations must raise their employee’s awareness to the profitability generated by auditing procedures, including internal and external auditing.

Organizations should define the auditing systems in their policies and procedures as constructive, optimizing and educational. Otherwise, the employees and organizations won’t be able to utilize the audit’s benefit to the fullest.



It is my recommendation to include the constructive auditing approach as a contributing factor in the process of sorting applicants for an auditing position. The cooperation between the auditor and the auditee aids both of them in fulfilling their jobs in a professional manner, which is beneficial to the organization that employs them both.

It is my decision to pass my e-book to The Israeli Office of Accountants and The Israeli Office of Internal Auditors and receive feedback.

Afterwards the book will be translated to English and sent to the IIA (The Global Institute of Internal Auditors), for the purpose of initiating the distribution of a new professional guideline about constructive internal auditing and how to practice it.



There is no doubt in my mind that my recommendations will optimize the auditing procedure, help reduce auditing expanses and also induce efficiency and savings in the audited organization.

The following is the e-book which elaborates on my methods for advertising the constructive auditing theory to internal and external auditors.

The link to the e-book

I wish to present another technique for the reduction of auditing expenses which is based on the constructive auditing perspective:

  1. The head internal auditor of an organization sets a meeting with the audit committee of directors, followed by a meeting with the CEO and members of the board. In both meetings the auditor will present the constructive auditing approach which is based on cooperation with the auditees, or in this case, the employees.

  1. 2.The CEO and management will issue an “audit procedure” to all employees, requiring them to cooperate with the internal audit department while defining the audit as constructive and crucial to the promotion of the organization’s goals (such as increasing efficiency profit).

  2. 3.Mandatory participation of all employees in a workshop led by a representative of the internal audit department, which could lead to an understanding of the constructive auditing approach and the advantages it poses for the organization and employees.

  3. 4.Every audit will open with a meeting which the manager in charge will lead and document. The written report will include a table describing the processes soon to take place and the employees in charge of them. Every process will be matched with the corresponding controls, exposure to risk, and the manager’s recommendations for reducing the exposure and added controls.


The auditor will then continue in his work, following his professional standards.

In conclusion, this sort of document reduces auditing expenses by eliminating conferences with auditees. The auditor remains professional while acting as an outsider who notices the flaws.

The auditor is not mandated to quote in his audit report the MOM document he received but can do so if he chooses. The auditees will receive guidelines from the management to prepare update this document for every audit. Furthermore, this document will be sent to the internal auditor once a year while referencing the updated sections. This will insure that the internal audit department is constantly aware of the situation.

The auditing system will receive updates on Exposures that are subject to change at least once a year. The “questionnaire” will aid the internal auditor in formulating his yearly work plan and will enable the management to fix flaws even before the beginning of the audit.



This dynamic process, which is based on the constructive auditing approach, will expand the management’s observations on the application of procedures and guidelines, for the purpose of achieving the organization’s goals.


Thank you for your consideration,

David Avramov, retired internal auditor.



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