Posts Tagged “auditing standards”

It’s become a truism that the ‘new normal’ as the world emerges from Covid-19 lockdown will not, and cannot, be like the old normal. But what does this mean for internal auditors? What skills will be most in demand and what can you do about it if you do not feel that you have enough of these at the moment? Audit International have all these answers and more.
As in other areas of the wider economy, many of the skills that are going up in value and demand (and those that are going down) reflect longer term trends that have been exacerbated by the crisis. A strong suite of technical auditing skills now puts more emphasis on so-called ‘soft’ skills and less on some traditionally prized abilities to sift and process information, although independent judgment, logical reasoning and analysis will always be important.

IT auditing is becoming an increasingly specialist preserve that is beyond the scope of most internal auditors, however many employers now expect all internal auditors to have a strong grasp of the basics of data analytics and of what analytics programmes can do for audits and assurance. This IT-savvy must go hand in hand with a wide imagination about the potential uses of the technology and how it can be employed more effectively.
What is new, however, is that ‘soft’ skills and IT experience are no longer nice-to-haves. Whereas a few months ago, there was a shortage of internal auditors in many sectors, now employers are likely to be able to pick and choose. The post-Covid landscape is likely to be bleak for many sectors and internal auditors will not be immune. There will be redundancies and people will need to look more broadly at their CVs, personal skills development and, possibly, at the options available to them in a wider range of sectors.

Russell Bunker, director at Barclay Simpson, says that the highest demand is currently for “experienced internal auditors operating at the delivery level”. Fewer organisations are hiring senior audit managers or trainees, he says. However, he added that a number of fixed-term or interim job opportunities are emerging and there are new jobs appearing as a consequence of an increase in co-sourced internal audit work. Some of these trends may be short-lived, of course, and may reflect temporary bans on permanent hiring.

So, what are the key skills internal auditors will need to thrive in the short and longer term?
1. Communication is key
Emotional intelligence may not have always been top of the list for internal auditors, but it’s hardly a new requirement. Internal auditors have to be great communicators – if you cannot talk to people – and, just as importantly, listen to them – you can neither learn from them nor persuade and influence them.
As computers take on ever more of the analysis side of auditing, we need humans who understand how people operate in real life, what makes them tick? Internal auditors need to pick up the nuances to spot when things may be wrong behind the scenes. They need to use the right language to relate to the people they need to get on their side or to persuade people to change the way things are done and to understand the need to better governance. And they need to be able to convey important messages simply and effectively. This is not always about being ‘nice’ – it’s about being effective. Some of these messages may be tough and they need to be understood and acted on.
It’s also about being able to demonstrate the behaviour that you preach. Actions really can speak louder than words.

2. Business acumen
This has always been important, but is becoming ever more so. Internal auditors see the whole of the business from the inside, but they also need to be able to look beyond it, and beyond their sector and region, if they are to appreciate emerging risks and the bigger picture. They need to understand what keeps their CEO awake at night – and, even more importantly, what should be keeping him or her awake at night.
Increasingly, they are being expected to know a lot about the potential impacts of everything from macro economics to climate change and the complexities of supply chains. Sourcing and reviewing the most up to date and reliable information is vital, but you also need the acumen to know how this could affect your business and to spot the risks and opportunities. Those who do not display this knowledge will not gain the respect internal audit needs from senior management to be effective.

3. Flexible and agile
Speed is of the essence. How can you offer assurance more effectively, more rapidly and more effectively? This is the holy grail of internal audit and will become even more so in the post-Covid landscape. Technology can help, but it takes people to think about how they can use it better. Those with the imagination and the drive to improve, adapt and change will be most valuable to, and valued by, management.

4. Personal relationships and networking
Use your personal relationships and find out what peers, colleagues, friends and family are doing. Be curious and ask questions. This is partly about being well-informed and partly about good communications. There are loads of ways to keep in touch so use them – from social media to Facetime to old-fashioned phone calls. You never know what may come in useful in future but the broader the net, the more you are likely to benefit.

5. Proactive – use your imagination
Imagination and curiosity are now so important that they deserve a mention on their own. Again, they are not new skills for internal auditors, but they have never been more important. You don’t need a formal mentor to tell you to think about where you want your career or your audit team to be in six months’ time. But it can help to take some time out of your normal routine to practise thinking more imaginatively. Many things in the near future will need to change and someone will need to identify potential changes and the ways to achieve them.
Equally, imagination is an important part of effective communication. What are your auditees doing and why? What are they going through? What do you want them to be doing in future – and how can you help them to get there?

6. Sell, sell, sell
It’s been said that everyone is selling something – and if they say they’re not, they’re lying. Selling has a bad reputation in the UK. It’s seen as duplicitous and bad-mannered. However, sales skills are just as vital for good ends as for bad. Internal auditors are going to have to compete for attention even harder and many will have difficult messages to convey in the near future. If you want management, auditees and colleagues to listen to you and respond to your messages, you will need adequate sales skills.
And, if you’re in a sector that has been badly affected by the pandemic, you may need to brush up your CV and prepare to sell your own skills more aggressively. If you have what it takes to help organisations weather this crisis, don’t sell yourself short.

“Audit International are specialists in the recruitment of Auditors and various Corporate Governance Professionals including Internal Audit, Cyber Security, Compliance, IT Audit, Data Analytics etc across Europe and the US.

If you would like to reach out to discuss your current requirements, please feel free to reach us via any of the following:
Calling
– Switzerland 0041 4350 830 59 or
– US 001 917 508 5615
E-mail:
– info@audit-international.com”

Internal audit functions need to be adaptable, technologically savvy, and future-focused.

This week Audit International are taking a look at how we can ensure the future of Internal Audit.
As COVID-19 spread across the world, it changed the entire landscape of life on both personal and professional levels. The changes it brought about have lingered and become the new normal, not only for the past three years but for the future.
While most organizations have implemented new short-term priorities to combat its effects, the internal audit function also needs to become future-oriented. As it supports operational effectiveness in an increasingly dynamic risk landscape, internal audit must consider the pandemic’s long-term impacts — with new risks arising from remote work and other pandemic changes, and old risks such as cybersecurity becoming an essential priority rather than simply a buzzword on the risk register.
While internal auditing’s focus on assurance of business process risks and controls remains an integral part of its role, the profession needs to be equally agile and adaptable as risks multiply and evolve — just like the Covid-19 virus.

The following actions are but a part of the changes and evolution that internal audit functions and leaders need to undertake, but they are a good start.
1. Identify changing work environments and tailor the internal audit approach to deliver value within them. Starting with the basics, notions such as segregation of duties and asset safeguards need to be revaluated for their suitability to the new work environments. The nature of work processes, especially under a remote work environment, or even an office-based environment that is increasingly reliant on digital collaboration tools, is fundamentally changing. Physical oversight and simple written signature approvals as controls will no longer be effective (and let’s be realistic, they are severely outdated and time consuming). Audits and auditors will need to employ a much higher level of rigor and detail in their reviews. Information technology applications need to be a basic skill for the traditional auditor, not a unique skillset of the sole IT auditor on the team, and information security risks need to be considered in absolutely every audit and process, not just IT audits.
2. Leverage emerging audit technologies. With auditors being involved in virtually every function of the business, and with every function in the business being interconnected through digital collaboration tools, the audit function, which is also a part of the organization (a fact that is often forgotten), also needs to be part of the organization’s digital ecosystem. Audit cannot preach digitization and evolution of the organization while remaining stagnant in paper trails by their own rights. Leveraging the increased access to data all over the company, and utilizing the many advanced data analytics functions embedded with them should be a basic tenant of the audit function. This is a blessing in disguise, as while initially implementing it might be a change and a challenge, it will allow audit functions to increase sample sizes, or even test whole populations, allowing the audit function to provide management with an unprecedented level of assurance (but let’s remember to stay within the realm of reasonable assurance as audits are not infallible).
3. Adopt an agile audit approach. It truly is a nice notion to be able to audit everything all the time. Time constraints are one of the biggest challenges to the audit function in providing coverage across the organization and balancing costs and benefits. With speed of doing business increasing at an exponential base, the speed of the audit function needs to evolve to keep pace. However, it is important to remember that this speed needs to be balanced with the rigor expected of the audit function. Luckily, the increasing use of technology also enables audit to be almost ever-present. Continuous audit programs and integrated red flags within information technology systems allow audit work to be more present rather than historically focused, largely enhancing the value auditors can contribute to their organization. Agile methodologies are not about employing traditional audit methods and producing “half baked” audit results; they are about leveraging emerging technologies such as automation and artificial intelligence within data systems to enhance operations and maximize shareholder wealth.

While this is by no means a comprehensive list, an audit function that is adaptable, technologically savvy, and present- and future-focused is definitely on the right track, steering ahead to the future. These tenants are the some of the essential foundations of the future of internal audit.
“Audit International are specialists in the recruitment of Auditors and various Corporate Governance Professionals including Internal Audit, Cyber Security, Compliance, IT Audit, Data Analytics etc across Europe and the US.

If you would like to reach out to discuss your current requirements, please feel free to reach us via any of the following:

Calling
– Switzerland 0041 4350 830 59 or
– US 001 917 508 5615

E-mail:
– info@audit-international.com”

Technology is clearly affecting how audits are performed today and how they would be conducted in the future. In the past, there was generally an anticipated error rate when an auditor used to rely on statistical sampling technique on a batch of invoices. However, now having remote access to all of a client’s data has allowed the implementation of new, improved data and analytics (D&A) procedures that can verify every single transaction, ensuring that any error is a major error.
The pandemic has not only changes the way of auditing but also accelerated technological investment in continuous auditing. As a result, auditors also have become analysts. This shift allows auditors to give more significant insights into organizational processes, as they are now aware of the entire process life cycle and the related technologies. To be effective, an audit must help managers and business directors achieve their strategic objectives. Future audits must meet this challenge, or auditing itself could become obsolete.

The future auditor needs to be equipped with specific skill sets to take a multidisciplinary approach. The challenges the auditor has to meet include:
• Ability of management to make appropriate decisions during times of stress
• any cultural concerns arising from employees ability to adapt and respond to the crisis
• Financial resilience and liquidity
• Dependencies on suppliers and third parties
• Disadvantaged customers
• Effectiveness of business continuity plans
• Adequacy of IT systems.

There are three important areas in which technology will alter the face of auditing:
1. Cognitive Analysis
Cognitive analysis, or AI, has the ability to shift through massive amounts of data and perform digital analyses in ways that are difficult for teams of auditors. Artificial intelligence, which leverages algorithms to identify and understand patterns and anomalies within data sets, can help internal auditors more efficiently identify areas of risk and execute many other tasks at warp speed.
2. Machine Learning
While machine learning typically seeks to extrapolate broad patterns. Whereas auditing focuses on analyzing historical events, machine learning solutions tend to predict future events. Lastly, most auditors lack the necessary education or coding skill set to proficiently experiment with machine learning in their work.
3. IRA and RPA
RPA (Robotics Process Automation) entails a bot or software application that can be programmed to perform basic human tasks that are typically rote or manual in nature. Robotics Process Automation has been one of the biggest buzzwords in the financial and tech industries. Robotic Process Automation is the creation of bots that can interact with data just like a human would, but bots have an advantage. Since bots are software, these can operate continuously without making mistakes like people

Conclusion :
The future of audit is no longer hypothetical. The future is here, and change is being accelerated by the COVID-19 pandemic, which is providing the impetus for more advanced technologies and innovations that will benefit the future of audit.

“Audit International are specialists in the recruitment of Auditors and various Corporate Governance Professionals including Internal Audit, Cyber Security, Compliance, IT Audit, Data Analytics etc across Europe and the US.

If you would like to reach out to discuss your current requirements, please feel free to reach us via any of the following:

Calling
o Switzerland 0041 4350 830 59 or
o US 001 917 508 5615

E-mail:
o info@audit-international.com”

Here at Audit International, we have always been on the lookout for clever ways to describe internal audit’s role in an organization.

Elevator speeches are fine when you have 60 seconds to describe the value your profession brings to an uninformed bystander. However, an elevator speech doesn’t hold a candle to a well-crafted sound bite that will leave a lasting impression.
One of our favorites used to be “internal audit is the brakes that allows the organization to drive faster.” The reasoning behind this analogy is that brakes are a critical component in a vehicle. To be sure, they are used to prohibit a vehicle from moving. But more importantly, brakes are crucial to maintaining control of a vehicle. Of course, well-resourced, independent internal audit functions add little value if they impede an organization’s ability to take risks and achieve results. But they add value when, like brakes on a car, they empower management and the board with information to slow down or stop if critical risks lie ahead.
Over the years, Audit International have come to view the “internal audit-as-brakes” analogy to be a bit outdated. It envisions internal audit as being primarily control-focused. Today, internal audit provides much greater value than merely a set of brakes. After all, a vehicle with an outstanding braking system can still end up in the wrong place. Brakes are great for stopping or slowing down. However, they do little to help change course. Internal audit in the 2020’s must be help create – not just protect value!
We believe a more powerful analogy is that internal audit is a critical component of an organization’s navigation system. Consider the value of a modern navigation system. Once the departing and arriving locations are entered, a navigation system provides timely and crucial feedback on the progress of the journey. The friendly voice provides turn-by-turn advice on reaching the destination. It recognizes when a turn has been missed, and quickly alerts the driver to “make a legal U-turn.” It can be programmed to recommend routes that are faster, less congested, or avoid tolls. Some alert the driver when the speed limit is being exceeded, or the vehicle is being taken on unsafe roads.
Much like the navigation system in a vehicle, internal audit shows its powerful value by:
• Providing assurance that the organization is progressing on the course charted by management and the board.
• Providing recommended corrective actions when the organization is off course (please make a legal U-turn).
• Identifying risks in advance (much like a navigation system warns of an accident or road congestion ahead).
• Alerting management and the board of compliance risks/failures (think excessive speed).
• Providing assurance that the organization has “arrived at its destination.”
To succeed, organizations in the 21st century must manage risks – both internal and external, whether related to finance, operations, strategy, technology, regulations, or reputation. While organizations are raising the bar on effective risk management, executives face extraordinary headwinds spawned by a turbulent environment in which risks materialize virtually overnight. In the past five years, we’ve faced the most extraordinary global pandemic in more than a century, more global financial turmoil, cybersecurity breaches that even target our infrastructure, corporate failures, and more. In the immediate future, we are facing the prospect of severe supply chain disruptions, inflationary pressures not seen in 40 years, and likely more nasty surprises from COVID-19. Relying on a good braking system will be inadequate to navigate the hills and valleys that lie ahead. Instead, organizations need strong navigation systems with well-resourced and independent internal audit functions fully integrated to succeed.
Granted, Audit Internationals updated analogy may be oversimplified. Strong internal audit functions add value in a multitude of ways, and we are never more critical that management and the board in navigating risks that our organizations face. However, I find it is useful to think through analogies such as this one so that I can better articulate internal audit’s role in ways that everyone can understand.
We welcome your thoughts.

“Audit International are specialists in the recruitment of Auditors and various Corporate Governance Professionals including Internal Audit, Cyber Security, Compliance, IT Audit, Data Analytics etc across Europe and the US.
If you would like to reach out to discuss your current requirements, please feel free to reach us via any of the following:
Calling
• Switzerland 0041 4350 830 59 or
• US 001 917 508 5615
E-mail:
• info@audit-international.com”

The Characteristics of Highly Successful Internal Auditors
Nobody knows it better than us here at Audit International that Internal auditors are a rare breed. To perform well in their jobs, they must have a set of skills and characteristics that are typically uncommon in one person. For example, they need to be analytical with laser-like focus, while also being “people-persons” with great communication skills. They need to be rule-followers, while also having the creativity and curiosity to blaze new trails. No one ever said it was easy, but becoming a top internal auditor takes dedication, hard work, and, as Liam Neeson said in the movie Taken: “a particular set of skills.”
We recently set out to identify the skills and characteristics good internal auditors must possess to perform well in their jobs. We found that some, like curiosity and integrity, are typically characteristics that are just part of our personality or not. Others, like technological know-how and communication abilities can be learned and honed through professional development and training courses. Others lie somewhere in the middle.
This is by no means an exhaustive list. There are many other skills and attributes not listed here, such as knowledge of the business, project management capabilities, and relationship building that are important to thriving as an internal auditor. Yet these are the qualifications chief audit executives, senior managers, and board members cite most often as the key abilities they are looking for in good internal auditors.
Regardless of how we acquire them, and in no particular order, here are the top six characteristics internal auditors should possess:
1) Great Communication Skills
It’s no secret that internal auditors need to be excellent communicators to execute their jobs well, however, that requirement has only increased as the COVID-19 pandemic closed offices and employees were forced to work from their homes. Now internal auditors must often conduct audits remotely, interviewing process owners and others through phone calls and video conferencing. It’s one thing to assess body language, tone, and facial expressions from across a desk or conference table, but quite another to read those important non-verbal cues during a Zoom call or over some other digital communication platform.
It doesn’t stop there. Internal auditors have many constituencies to serve. From their audit customers to senior management and the board, they must be able to navigate many relationships within the organization and sometimes bridge seemingly conflicting views on what’s important to the company. That takes great communication skills and any internal auditor that doesn’t possess them will likely falter in their roles.
2) Unyielding Curiosity
Good internal auditors ask why? Great internal auditors keep asking “why?” Like a child who follows up one question of “why?” with “OK, but why?” top internal auditors keep asking questions until they fully understand the issues at hand. They are not easily swayed with a pat answer or put off the trail with an explanation that doesn’t quite add up. Their natural curiosity keeps them pushing until they find the answers and explanations that satisfies them—in other words, when there are no more “why” questions to ask.
Such intellectual curiosity doesn’t just serve good internal auditors well in the pursuit of fraud and wrongdoing, either. It helps them fully understand how controls, processes, and business units work, so they can make recommendations to improve them.
3) Technological Savvy
Increasingly, the job of the internal auditor relies on technological tools, such as data analytics, cloud-based application platforms, and data visualization. Indeed, the internal auditor of the future will likely also need to be an expert—or at least proficient—in such areas as artificial intelligence, machine learning, and technologies still out on the horizon. For this reason, internal auditors who don’t embrace new technologies and learn enough about them to at least begin to experiment with new ways of doing things will be left behind. While it’s important to embrace the more recent technologies that internal audit is increasingly coming to rely on to execute its duties, a digital revolution is taking place in just about every facet of the organization. To complete audits of nearly any process or function will require a working knowledge of increasingly complex technologies. It’s true too, that the top risks in any organization typically involve areas like cybersecurity, data governance, and information security, all of which require internal auditors to be tech savvy..
4) Ability to Work Independently and on a Team
It might seem contradictory to say that internal auditors must be able to work on their own, but then also be good team players, but it’s true, and the remote work scenarios brought on by the pandemic have only made it truer. Internal audit has always required a good bit of independent work, but the amount has increased with remote audits and auditors working from home. The ability to work independently relies on such underlying skills as self-motivation, self-management, and accountability. Without daily meeting in the conference room and the chief audit executive looking over their shoulders, internal auditors must be resourceful and reliable to keep projects humming along. That doesn’t mean they no longer have to be able to work well with others. More recent work models, particularly agile audit, require lots of interaction and coordination. This harkens back to the importance of communication abilities, but good internal auditors are also team players.
5) Drive to Be Life-long Learners
I once asked a chief audit executive: What is the single most important thing you look for when you are hiring a new member of your internal audit team? Without hesitation, he said: “I look for someone who is always looking to learn new things.” He explained that internal auditors must be generalists and specialists at the same time. Their jobs will take them to many places and expose them to new knowledge all the time..
The fact that internal auditors get exposure to lots of different aspects and units of the business is certainly one of the benefits of the job, but it comes with challenges. They must be able to constantly digest new information and learn new parts of the business. No two audits are ever the same and without the desire to learn something new, it will be difficult for an internal auditor to approach each new assignment with the sponge-like ability to absorb new knowledge and come up to speed quickly on a process or function.
6) Integrity and Courage
Perhaps above all else, integrity and courage must be at the core traits of a high-performing internal auditor. There will be times when internal auditors are asked to look the other way or ignore some faulty control or management wrongdoing, and they must simply be able to resist the urge. It’s never easy to confront someone who isn’t doing the right thing and bring it to light, but it’s a trait that top internal auditors all possess.
One more thought on integrity and courage: We often think of these things in terms of big crises and scandals, where the internal auditor stands up to an accounting fraud that is taking place in the organization or a CEO who is up to no good. Yet it more often integrity and courage will be called up for small things, where someone is looking to cut a corner or isn’t treating others with respect. This is when integrity, along with a good moral compass can help an internal auditor push past a roadblock and get an audit back on track.
Just Add Hard Work
So, call them what you may: characteristics, skills, qualifications, or abilities, but working on these six things will go a long way toward excelling as an internal auditor. Of course, they aren’t enough in themselves to ensure a quick rise through the ranks of the internal audit team. That requires hard work and dedication to the job. But they will certainly put you on the right track.
“Audit International are specialists in the recruitment of Auditors and various Corporate Governance Professionals including Internal Audit, Cyber Security, Compliance, IT Audit, Data Analytics etc across Europe and the US.
If you would like to reach out to discuss your current requirements, please feel free to reach us via any of the following:
Calling
• Switzerland 0041 4350 830 59 or
• US 001 917 508 5615
E-mail:
• info@audit-international.com”

Today, Audit International are hoping to clear up a few of the most common Internal audit myths. Let us know if there are any we have overlooked, and we bet we can debunk those ones too.

Myth: There is little creativity in internal auditing
This couldn’t be further from the truth. Internal auditors are called on to do a hard job, that much is true. That job can be operationally challenging, “dry” in content (which is subjective), and seemingly “behind the scenes”. However, as Workiva states, IAs are increasingly using brand power and social media to better communicate what they do and its centrality to business operations.
• “For instance, a team I used to work on rebranded from “Internal Audit” to “Risk Advisory and Assurance.” It helped answer questions about what we do and provided clarity to the types of services we provided”.
If internal audits are seen to be working in the shadows, the time is now to dispel those rumours of bean-counting and step into the fore!

Myth: IAs are the business police
Stinnett Associates describes how they go about amending this viewpoint perfectly, by urging internal auditors to focus on “process improvement” as the real essence and philosophy of the role, rather than letting stakeholders confer amongst themselves that IAs are only in it to stifle business, innovation, creative thought or operational independence.
Owning this new narrative is super important: IAs are integral to business success, and vital elements in non-auditors doing even better in their roles thanks to IA’s fastidious attention to regulatory and ethical performance.

Myth: Aren’t internal auditors just accountants by another name?
While accounting provides some critical skills needed to be a successful internal auditor, the industry draws from a wide range of backgrounds and skills, from tech and IT to engineering.
The real skills needed – diligence, a high regard for quality services, fastidiousness, great communication and creative thinking – means that people from a wide variety of backgrounds with training can enjoy a career in internal audit.

Myth: Internal audits are the same as external audits
No, they are not the same. While some parts of the day-to-day job of an internal and external auditor are parallel – both evaluate controls, report to seniors, and work with audit programmes – the outcomes and flexibility of internal auditing drastically differs.
As Moss Adams in their presentation titled Busting the Myths Surrounding Internal Audit states, “(IA) focuses on future events by evaluating controls to help the organisation accomplish its goals and objectives” rather than just meeting “materiality thresholds”.
By offering a service more “broad in scope” than external auditors, IAs provide direct, measurable business outcomes and improvements.

Myth: Internal audit is a lonely job
While “independence” of an IA’s role is a prerequisite, the truth of the matter is internal auditors straddle every department in an enterprise.
As mentioned above, the job is focused entirely on improvements, working closely with internal controls (which is a separate but often conflated field) to mitigate fraud and perfect business outcomes. This means that IA professionals get to work with their own team and every department in a company.

“Audit International are specialists in the recruitment of Auditors and various Corporate Governance Professionals including Internal Audit, Cyber Security, Compliance, IT Audit, Data Analytics etc across Europe and the US.

If you would like to reach out to discuss your current requirements, please feel free to reach us via any of the following:
Calling
• Switzerland 0041 4350 830 59 or
• US 001 917 508 5615
E-mail:
• info@audit-international.com”

This week Audit International are taking a very tongue-in-cheek look at how Internal Auditors can be the most liked person in the office, and who everyone wants to talk to around the water cooler. Read on for some insightful tips.

Outside of boxing or MMA, internal auditing has to be one of the most contentious careers around. You would never hear a department stating, “Let’s invite the internal auditors to our next staff meeting.” But I don’t think they are destined to be the policing bad guys that everyone hates to see coming. I believe that there are truly opportunities for internal auditors to become partners with audit clients.
As a matter of fact, I have heard of recent experiences that have further increased my belief in the auditor’s ability to be a trusted partner, even a sought after consultant. My source has been at their current organization almost ten years. They get along very well with audit clients, even the ones that have had bad audits results. They have open, honest relationships where they all care about the organization and its success.
My source has always been a very good technical auditor, but their current organization taught them a lot about the human side of the workplace. Many of the people they work with have become almost like an extended family. Recently, another organization approached them about being their Executive Director of Internal Auditing. This was an opportunity that they just could not refuse. Now as they reflect on the previous role, the things that they most miss are the people.
As they walked around spreading the word of leaving, they found out that the feeling was mutual. The kind words and warm hugs nearly brought them to tears and as everyone told them how big of a loss that leaving was to the company, they could not help but remind them, “You do understand, I am an auditor.”
Realistically I don’t think that other departments are supposed to like auditors, but most of them truly valued the time together. Those who didn’t like my source, at least respected them and the craft.
But then they began to wonder, what had they done to gain the trust and respect of the audit clients. So they asked a few. And I’d like to share with you the general themes I heard repeated.
Honesty is Honourable. Over the years, there were some heated discussions surrounding certain people, places and processes. Throughout it all the truth was still gently told. And this is one thing clients said they liked. Even when the news was bad. Empathy Creates Engagement. They had never considered themselves as overly empathetic at work. They believed there was always a strict line not to be crossed between work and personal. The last 10 years have taught them that there is a line and that sometimes it is okay (or even necessary) to tip toe up to it, step on, and even cross it occasionally. Your fellow co-workers are human. And these humans have hearts that sometimes need to be tended to. Kindness is Contagious. I like people. I like to see people smiling. I like to smile and laugh and joke. In the past, people would conceal this side at work. I thought work meant being serious all the time. Now I realize, if we cannot laugh at the place we spend a majority of our time, something is wrong. This applies to your colleagues too, even if you are on the audit team – it is OKAY to have a joke. And no one deserves to be treated mean when they make mistakes. Even if they are not cut out for a job, they still deserve common courtesy and decency. If we treat our audit clients with kindness, they are more receptive to the audit process. Conclusions My source has been an auditor for a long time. They say they have occasionally failed and sometimes succeeded. Through it all, they have had decent relationships with most audit clients. Technical auditing skills are extremely important, but to truly be successful you must hone in on the human side of the profession. My sources wonderful clients have taught them that honesty is honourable, empathy creates engagement, and kindness is contagious. So the one piece of advice I can offer is this; When communicating with any clients – be honest, be caring and be kind.

Audit contracts are changing hands rapidly since the FRC and Competition Commission published their separate recommendations to enforce more frequent tendering of FTSE 350 audits. But recently KPMG managed to hang onto the Standard Chartered audit contract after it went out to tender in August of last year. Read more in our previous blog BIG 4 firm KPMG retains Standard Chartered audit

KPMG have been the banks auditor for 40 years and the big 4 firm earned around £9m last year from the audit.

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The European Parliament’s legal affairs committee have approved a draft agreement for EU audit reform in the hope that it will open up the EU audit services market beyond the dominant Big Four firms.

The EUs legal affairs committee voted in favour of the measures agreed in December. Read more in our previous blog Preliminarily agreement reached on the EU audit reform . These measures will force large-listed companies to change the firms that audit their accounts on a regular basis.

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The EU member states have preliminarily agreed the EU audit reform but this will mean auditors will be banned from offering certain non-audit services to their clients.

EU member states preliminarily agreed the EU audit reform on Tuesday. Read more about this in our previous blog Preliminarily agreement reached on the EU audit reform

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