The Eight Es

By Dr. Hernan Murdock ,VP – Content and Programming at ACI Learning.


Auditors focus on a variety of subjects during their work and it is helpful to leverage acronyms, mnemonics and frameworks to make sure that important coverage areas are not forgotten. The Es represent a series of eight topic areas that are very useful especially when performing operational audits.

Some readers may recognize the first three, which I refer to as The Primary Three, because they form the basis for value-for-money audits. Over the years I expanded the list to eight because I found that other important success factors were missing.  The eight Es are as follows:



This refers to the cost incurred while obtaining the inputs the organization, program or process needs to perform its activities.

Two important questions to ask are:
Is the organization paying a fair price for the inputs obtained?
and Is the organization getting the best value for money?

Economy is important because waste, in any way, is against the interests of the organization’s stakeholders. Overpaying can occur when paying rent, buying inventory, fixed assets, supplies, and even when borrowing funds or paying for electricity, water, and waste disposal.

Overpaying reduces the organization’s profitability and lowers the
amount of financial resources available for other important uses.



This relates to the ratio of production (i.e. outputs) in relation to costs or inputs. Efficiency can be measured in terms of money, time, or energy. Everyone working within, or on behalf of, an organization has a responsibility to maximize the value and use of available resources.

Like the lack of economy, inefficiency reduces the organization’s
profitability as it consumes more resources than necessary.



It refers to the degree to which a program or process is successful achieving its goals and objectives. It focuses on whether the area being reviewed is successful or not. An inability to achieve relevant goals and objectives puts into question the follow-through on the responsibility of the organization as an agent of stakeholders, and the achievement of objectives as the reason resources were committed and used in the first place. The absence of clearly defined goals and objectives is an issue too.



It is defined as the moral principles that govern a person’s behavior. It also applies to organizations to the extent that the individuals managing, leading, and working within or for the organization make decisions that contain moral elements.

Internal auditors are tasked with assessing and making appropriate recommendations to improve the organization’s governance processes and for promoting appropriate ethics and values (Standard 2110).

Ethics are a fundamental ingredient in well-functioning
organizations and ethical breakdowns can be very costly a
exemplified in the scandal at Carillion, Wirecard, Wells Fargo,
Volkswagen, Theranos, Enron,WorldCom, and Parmalat, among others.

Internal auditors cannot examine business transactions, documents and records in a vacuum because an unethical employee could falsify company records or engage in other inappropriate actions harming the company, colleagues, vendors, investors, customers, and the public.



Concern for the environment has been on the rise for decades. Organizations today must adhere to environmental rules, laws, and regulations such as clean air, clean water, and many others. Furthermore, the public has become less tolerant of organizations that pollute. Managers cannot ignore the importance of environmental stewardship and must act like responsible corporate citizens.

Volkswagen was embroiled in a very damaging scandalwhen software
was detected under-reporting the true emission levels of 11 million
diesel-vehicles. The company agreed to pay a $2.8 billion criminal
fine in the United States and set a provision of $23.9 billion to
address the damages associated with the recall.

Other impacts include the resignation of the company’s CEO and other senior executives, and a substantial drop in stock price after the incident became public. The impact on future sales of diesel-powered vehicles, and more specifically, the reduction in VW market share is still unknown.



This applies to the idea of treating everyone fairly. While many instinctively relate this concept to compliance with fair labor laws (e.g., hiring, pay, termination), the concept is much broader. Organizations should examine their practices to verify that they adhere to the principles of equity when promoting employees, when dealing with customers, when selecting and working with suppliers, and in their interactions with the communities where they operate.

United Airlines experienced a great deal of pushback when it removed
a paying customer from an airplane because the airline needed seats
to move flight crew members from one city to another The unfairness
of the practice, and the way this was done,reverberated in social media
damaging the company’s reputation and costing millions of dollars.



This concept relates to the performance of work with high quality. Every internal audit should include in its review process an examination of the degree to which the work performed is of high quality, and all interactions are characterized by an element of superior customer service toward others. This concept should be applied to all organizations, their programs, and processes.

Poor workmanship, lack of reliability, and similar poor features carry a risk to the organization often reflected in higher-than-necessary returns, warranty claims, complaints, customer turnover, and poor
reputation. Low quality and poor workmanship are frowned upon in developed and developing countries alike, and has become a key differentiator in many industries.



This relates to the emotional attachment and involvement that highly engaged employees show when working and interacting with others. When employees are not emotionally invested in the organization and their work, they do not work beyond the minimum requirements, they do not go the extra mile and they make few attempts to delight the customer.

Their lack of emotional interest is often evident
in a lack of pride in the work done, and generally
lead to apathy or high turnover. 


The eight Es are a very useful framework when applied as themes
during the development of audit and consulting programs or
subsequently during fieldwork and reporting.

Include the eight Es when developing interview questions,
when providing status updates to the client,
when conducting exit meetings and even when writing audit reports.

The eight Es provide a simple, yet very powerful tool to make sure that these essential topics for organizational success are addressed during engagements.  Business leaders and manager focus on these themes, and their organizations thrive or fail based on their ability to operate according to these principles. Internal auditors should too.

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