The Human Side of Audit and Risk with Crowe’s Richard Evans

Samad Masood: Welcome to The Professionals, where we discuss how to survive and thrive as a professional services execu-tive. I'm Samad Masood from the Infosys Knowledge Institute, and today I'm here with Richard Evans. He's the Head of Risk and Assurance based in London at Crowe, one of the top 10 professional services networks glob-ally. Welcome, Richard. Thanks for joining us.

Richard Evans: No, no problem. Thanks. Glad to be here as well.

Samad Masood: Richard, tell us about your career today in professional services and what you've been doing?

Richard Evans: Sure. I've been working in professional services for around 25 years. First part of that, I joined Deloitte through their graduate program. I was actually one of their first internal auditors to join the firm as that service line was set up. I worked in various incarnations of Deloitte within different elements of the company, predominantly within internal audit risk. I then at one point set up a counter fraud business and ran a team of professional in-vestigators, before moving back into internal audit, specializing at the time around the education and ele-ments of the corporate sector.

I joined Crowe just over seven years ago, essentially to set up the risk services for the firm. And now I lead a team who conduct a range of internal audit risk, compliance work. I would say my work itself is still pretty hands-on in terms of a number of areas and I tend to do more specialist assurance, third party risk and investi-gations and misconduct work as well. I'd still like to undertake a range of projects myself.

Samad Masood: I have to say, Richard, you look very young. You didn't mention, I think, how long you've been at Deloitte. How much time has that spanned?

Richard Evans: I mean it’s flattering, but maybe I'm covering it well. I was at Deloitte for nearly 20 years across a period of time, and I joined Crowe in 2017. And I've been at Crowe for just over seven years.

Samad Masood: What was the moment in your career that you would say when you look back at that, what really was the big moment that made you the professional services exec you are today?

Richard Evans: There's lots of different points that I can think of lots of touching points as I went through things, and I went through different stages. And in many ways, when I was at Deloitte, it was only really after I'd been there for such a long period, but I thought actually, I really have been in this firm for quite a while because I tended to move in terms of role and team and service line and groups of people.

When I really first started at Crowe, I'd had a long-term client business. I was used to my phone ringing; I was used to my diary being completely full. And when I started at Crowe, and you obviously can't ring any of your old clients, you don't have all of that workflow. And suddenly I'm sitting at a desk thinking, "I've gone from this huge environment where I'm sitting at a desk, there's a couple of people in and around me, but I'm the only per-son in the firm who does what I do."

There were three or four people in and around me and it was really almost taking a step back, alight. I've done my induction; I've signed off my different things. What do I do now? I've walked into this, I've got my mobile, I've got a couple of the social media elements, but what am I going to go and do? I've got to come build this up. And it was almost really starting the whole thing from scratch. I used to have multiple programs. I had everything at my fingertips from everything we built up over a period of time, literally starting with a couple of clients with, there was, I think there were four people in the team. It's almost starting a brand-new career.

Samad Masood: It's scary. Exciting, but quite scary really, and really takes you out of your comfort zone I suppose.

Richard Evans: I think so. I think for me it was almost like, "Can I, do it?" There was a question of do I believe I could build a business again? Do I believe I could do it? I'd almost do it my way, the way I saw things. The thing I almost wanted to do straight away was almost like if I could pick up a couple of pieces of work, I could start to build some relationships. The partners were really good actually in terms of it making introductions. Actually, I im-mediately felt part of the firm.

And one thing that struck me, I was like, "Right, I'm a partner now, so what would a partner do? Where would I go?" Rather, instead of asking, it was like, "We're just going to go and do it." It's quite a change when you sud-denly go from quite a very structured environment to going, "Well, actually, if I want to go and do something, I'll just go do it." We'll go build some partnerships. We've invested into some technology, we tried things. And not everything worked, but it was very much like, "Right, we're going to just go and do things. And it's almost like, let's ask for forgiveness, not for permission. Let's go win some work. Let's go do some stuff. Let's go recruit some people. We'll skill them up."

To be honest, whilst initially it was almost quite scary, but at some point, you've got to be like, well, do you trust yourself and trust your judgment and back yourself? And I think that's the thing that I pushed on. I think that's the thing that's driven the team. And actually, since I've joined, really our unplanned attrition is well under 10%. And I think that's because people can see what we're trying to do. I think that's been hugely positive. But it was, that first period was probably the point where I was just looking there going, it's literally just me, a laptop and a computer. I've got nothing around me. And it was really like then, well, if I'm going to go and do it, I need to go and do it. No one's going to do it for you.

Samad Masood: What were the things you took from that experience, which you wouldn't have learned if you hadn't done it?

Richard Evans: When people joined, I talked to people about the differences, and I'm pretty honest. I think with Deloitte, the thing I probably didn't fully appreciate was the machine. And by that, I mean all of the systems, the infrastruc-ture, and in many ways at Crowe we are the machine. We invested heavily. The firm's doubled in size since I've been here. But actually, it's almost like if you're going to do some thought pieces, do some insight, you're going to develop a new methodology, you're going to develop a new approach, you're going to think about how we manage a risk to an engagement. It's actually yourself.

And you could either really like that or really enjoy it. Or some people might be like, "Actually, that really isn't for me." And I think that's definitely one element. I would say the other thing is in a Big 4 environment, I'd say you're never very far away from finding a unique specialist. And I think everyone can become quiet, that's what they do. They work in this particular sector, they do this type of work, they do it really well.

But here actually the big difference is the cross-skilling. And there were a couple of places where when we pitched the work and they said, "Look, to be honest, we like everything you've said, but we're going to go..." No one ever gets fired for buying IBM, et cetera, but it's actually, it's a risk. They were like, "What are you guys go-ing to do?" Which is different because it's a risk to hire someone that actually doesn't have 500 people sitting across the team.

Samad Masood: Or just the big brand name that everyone knows. Yeah, yeah.

Richard Evans: Yeah, no. But over time, I think we've grown the brand. The firm has changed as well. It's like it was all very es-tablished audit business and there was a definite commitment from the leadership from the exec to say, "We want risk as one of our key service lines within one of our top four areas." I think that backing really helped. I think you've got to trust people, the fact that they may fail, and it may not work. But I think actually the fact that there was a clear backing meant we could go and do it.

There were definitely some aspects, but I think the benefit for me is the capacity for innovation. We work with the Andretti Formula E team, and we developed a partnership around that. We do element professional ser-vices for them, and we learn lessons and we work together. And I think actually being able to try something like that and build it up from the ground up is so positive because actually it's like, "Let's go and do some work in sport. Let's see what we can do and take it from there."

I think that is a difference. I think culturally that things are not that far away. We try and make sure that it still has enough of a feel of a mid-tier firm, of a smaller firm. We don't want to lose that ethos. But I suppose when I joined the firm itself, it had probably seven to eight hundred people. Now it's 1,500 plus. It's how do you main-tain the culture and the values when you're investing in infrastructure, when things are changing? And it's al-most how do you keep growing but still keep the things that actually make you quite unique?

Samad Masood: I mean, it's interesting in the professional services industry because everyone is reliant really on their own in-dividual skills and clients are buying into people. And yet when you look at the Big 4 and the large established firms, they really have built a machine, as you say. And there's a cultural element to that, but there's also a lot of the support. And it's interesting to think about how you maintain your individual USP, but also your individual drive. How do you maintain that individual passion, that excitement, the sort of innovation and the energy that you had coming into Crowe as you grow?

Richard Evans: Look, I think you have to continuously refresh yourself. And I think the thing that's been most beneficial for me is actually I'm still very involved in work. I got involved in a very quickly, very large change program. Suddenly I was then involved and suddenly it gave the firm a view that actually we can do this different type of work. But actually, I think it was a really interesting project. I'd never been involved in it before. A finance system had been implemented; the case study had gone as badly as it could go.

And we went in and basically worked with the finance team to completely change everything and put every-thing back on a really good footing. Now that was a six-month program, but doing something like that, actually it wasn't something I'd directly done before, but I had to adapt to think, "Well, what am I going to do?" And I think in many ways that's how we've developed. And I think I get a lot of the energy from; I do find the work in-teresting. I mean I have a really short attention span. I couldn't do the same job time after time. It really isn't for me. I think you've got to want to do different areas. You've got to be wanting to be involved in different chal-lenges.

I think when I try and recruit people to the team, that's exactly what we're looking for all the time. We're looking for people who are going to engage well within this. We might hire some people with specialist experience like on the technology on the cyber side. But in reality, what I need are a group of people who are willing to come in and really develop and build in different areas, I think the enthusiasm for stuff comes in when it's just having the challenge in that I'm currently scoping out a very significant third-party assurance piece. Which is some-thing we've not directly done anything like this before, but actually we've got the skills to adapt to do it, and then to really help someone with it.

You have to maintain; I think a level of enthusiasm. You've also got to want to work with people. I think we have really good relationships with clients, we've built things up over time, people were there with us on. And I think you've got to really enjoy the challenge. I mean, the other thing I'd say, I was in the States last week with the Crowe US partners working together on something. And I'd say they've all been in professional services for a similar amount of time, probably a bit longer. The thing that struck me there was also how much they enjoyed it.

We were all pitching for a new thing together and everyone was like, "This is really good. It's really exciting. We're working together. We haven't done these direct sorts of things before." And I think if you've got people like that, that it naturally infuses you. Look, it's hard work. You've got to put some hours in, but it's hugely re-warding in terms of how you can set the tone, how you can do things that you've not done before.

Samad Masood: Do you think that short attention span is a critical component to be successful in professional services regard-less of the field? Or do you think that that's just a certain type of consultant?

Richard Evans: Definitely a certain type I would say. I mean, we've got professional services, you have a considerable audit is still the driver of much of the firms. But there you need someone who's much more considered, much more detail orientated. Actually, I think that works really well. I equally have a blend of people in the team. I have some people who actually want to work on longer term projects. But myself, it's a fact but actually the role that I occupy means it's much better that I can dip in and out of things and really focus intensely on one thing and then jump into the next and think about the next challenge.

No, no, I'd say it's a real cross-section across the firm. I think we need, when we do different character studies and personality studies, then you can see the balance. And I think we definitely don't want everyone to be like myself because you need some people who you can just really be in there, will do, will deliver. No, I think there's a good mix. And I think the other thing we're getting much better at is recognizing different types. We don't expect everyone to be the same.

I think we sometimes need to move away from a concept of the hero partner director type, jump in and solve everything. Actually, in reality, what you need is really a blend of people doing different things around you. I've got one director who's much more of a consultancy type, big picture individual. I've got another who's much more focused around who can deliver significant programs of work. And their approaches are quite different but in reality, it works really well because we have different clients, we have different assignments. It's got to be much more of a blend of different people and your personality types.

Samad Masood: Where do you see your work changing and the industry changing? And what advice would you give to people entering this industry about how to focus and how to think in the current climate?

Richard Evans: Look, I think there is a series of things. I think obviously technology and the role technology plays in what we do has been huge, huge change from when I first started. The work we do around cyber, how people see cyber mis-information, disinformation, risk. Again, I think that for us that the misinformation, disinformation type risk is-sue is something which we expect to do more and more of coming forward.

I think there's also the element of AI, and I think there's a real... There are substantive opportunities around this. I mean we are exploring different areas for how things can help generate. And some of it is how AI can take the kind of experience and knowledge I've got from 25 years of doing this, how we can put that sort of knowledge at the fingertips of someone first entering the profession. That's a huge opportunity, data, technolo-gy, understanding. But actually, still at the heart of it, in terms of the risk side, in terms of what I do, its still people focused.

You've got to be able to talk to people. I think you get back to the Latin, to audit means to listen. And that's ac-tually one of the critical things that you've got to be able to understand people. We can take all the technology and all the AI in the world, but at some point, you've still got to convince someone that why they should change. Or when you're going in to work out why something has gone wrong, its often people related. And we do things like root cause analysis. We drilled it down, we took 100 significant control failures, only three of them related to technology. And actually, a lot of it, over 40% was around culture, was around leadership, was around train-ing from the top, things around handover, people.

Actually, the people element is so key. Our teams often now tend to work from the office rather than on the client side. And actually, I think they really miss that. There's such a benefit from getting out, walking the floors, talking to people, but it's very different how you do it. I think we need to think about how we equip people for the skills of that. But overall, there are still fundamental elements of what we do that haven't actually changed. We've got to go and see if something's going wrong, whereas we're looking for system process. There are so many different ways we do it.

I could also see the way the industry is changing is around the technology, particularly the wider audit of at-tacks, the AI, there's lots of things that you could do in different ways. It's more how do you equip people to un-derstand and interpret that data, that tool to understand what it's telling you. How do you know that it's giving you the right information? I think there's probably some short-term shifts.

Samad Masood: Professional services as a whole. It's a very people-oriented business. And if I was to put an unfair stereotype on it, I would've thought audit and risk was the least people friendly segment. But I think you've done a great job of explaining it is really about people and how humans are dealing with processes, how they're reacting, how they're leading. I think that's really great to hear. But when you think about AI and understanding those new risks, are we all having to develop a more technical understanding? And maybe I don't mean just the technolo-gy, but I suppose more technical around how data is used, how ethics work, this kind of stuff. It seems quite complicated really.

Richard Evans: I think we're still getting to the point of understanding how we manage the risk of it. For me, there's also, and there's been some interesting points and we're doing some work around for it to on third party risk or due dili-gence. Even on recruitment actually as well. How do you know someone isn't using AI to produce the answers that you need for your supplier questionnaires?

For example, we did, and I raised this in a meeting, the client actually went back and said, "Actually, the re-sponses we had were so perfect that we're really concerned." It's not necessarily a change in the way audit works, but it's a different way of thinking about it. In reality, it's almost what it's doing is you're changing the nature of the risk and the potential scale of the risk.

We're doing some work around that, around understanding, I think on the technical application, it's actually how do you know when you are running it that is what you're expecting it to do? I think that's where you run the risk if people don't understand it. I think it's too easy to throw out some phrases and everyone's like, "Okay, that sounds very complicated." But in reality, I think often, if you hide behind complexity, then actually that means you don't really understand it. I think the firms will have to really tackle this challenge.

Samad Masood: And I think things are moving so fast in a year or so if we had this conversation, I'm sure we'll be a lot more ad-vanced in understanding those. Like you say, shining light on it exposes it and makes it a bit easier to under-stand. And there's a lot going on and a lot of new things, but a lot of traditional approaches that you need to keep in mind. And I will forever now see auditors and risk advisors as very human people and people oriented rather than just looking at the numbers.

Richard Evans: That's good.

Samad Masood: Thank you, Richard. Thanks for your time.

Richard Evans: No problem. Thanks.

Samad Masood: Thanks for listening to this episode of The Professionals. It was produced by Yulia De Bari and Christine Cal-houn. Dode Bigley is our audio engineer. If you want to hear more episodes, please like and subscribe. See you next time.