Posts Tagged “internal auditor vacancies”
A few weeks ago, Audit International met with a self-described “introverted” business leader. This business leader confided to us that introverted individuals have a harder time climbing the corporate ladder. The individual went further in claiming that recent research shows that it is worst for women, as introverted women are seen as less assertive and lacking in leadership traits.
Conversely, the business leader pointed out that recent research also shows that introverted individuals actually make better leaders, but because they are not as assertive as their extroverted counterparts, they are not equally represented in leadership positions. That took a minute for us to reflect on. It was one of the most thought-provoking discussions we’ve had in recent weeks.
Curious by the proposition and wanting to see what statistics we could get on the topic ourselves, we set out to create several online polls. Initially, we just asked a simple question:
Do you consider yourself an introvert or an extrovert? Here are three things we learned from asking that and some follow-up questions:
People Do Not Like Binary Options on Personality Traits
In two separate polls across different platforms, we received similar feedback:
“No room for those who don’t fall into these binary groups?” was one of the first responses.
“Some people vary based on their environment,” and “I believe there should be space in between the two,” were two responses that quickly followed.
“Do you have a definition of introverts and extroverts?” was the last question.
Even when we tried to foolishly define the terms we were met with a big, “it depends.”
Lastly, we received the one-word response that took my approach in a different direction: “ambivert.”
The Power of the Ambivert
A full 70 to 80 percent of internal audit professionals considered themselves introverts when only given two choices on the introvert vs. extrovert spectrum. However, in follow-up polls, when the ambivert option was introduced, the results were different. Vastly different. Nearly half of the introverts from the initial polls now classified themselves as ambiverts. Ambiverts were now, in two separate polls, the largest group.
So, what does that mean?
Maybe we’re being foolish again, but here is our theory: Introverted ambiverts are those who usually keep to themselves and don’t brag about their accomplishments, but when the stars align and the spotlight is on them, they shine.
When Audit International first started in the internal audit profession, we worked with two introverted gentlemen. They generally kept to themselves in the day-to-day audit process. But, when they led projects, they had absolute killer instincts.
In that group, they audited the Latin America region, so depending on the country visited they would switch from English to Spanish or Portuguese and back to English with pure finesse. Audit clients would be at ease with their approach and communication style. Anyone who had only known them for that period would swear they were extroverted individuals. But they were not. They were ambiverts.
And that is the power of the ambivert: Killer instincts when it matters.
Extroverts Are Disproportionately Represented in Leadership Positions
Back to the business leader’s proposition that introverted individuals get the short end of the stick when it comes to leadership positions. Was that the case? Based on my poll results, yes.
Extroverts represented approximately one-fourth of the sample population of internal audit professionals. However, they represent one-third of those professionals in leadership positions. Introverts, excluding those with ambivert traits, represented over a third of the sample population of internal audit professionals, but only 10 percent of those in leadership positions. These statistics can be even more accentuated when it comes to female leaders.
A burning question then came to mind. Do extroverts make better leaders? Would that be the reason they are overrepresented in those positions?
Audit International set out to attempt to answer that by asking the community about their experience with their previous leaders. Were their best leaders introverts or extroverts? For this last poll, we purposefully left the ambivert option out.
The results? Extroverts were slightly at an advantage, 53 percent versus 47 percent. In other words, the “best” leader being an introvert or extrovert had close to the same likelihood as the flip of a coin.
How come we don’t have more introverted leaders if they are just as good as extrovert ones?
We don’t have any statistics there but, in my opinion, it’s likely because extroverts are seen as better communicators, and being a good communicator is a sought-out trait in effective leaders.
Should Introverts Lose all Hope?
No. Introverts in some circumstances may have an advantage over extroverts. Another reason is that in [internal audit], passion for the role is important to the impact that you can have on the organization. An introvert has to put a bit more effort into the work than an extrovert does, and I’ve seen several times where this translated to the level of commitment and effectiveness to the role.”
It might even be concluded that an introvert displays more active listening skills and empathy, which is also essential in leadership roles.
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
When SOX was first enacted in 2002, its goal was to increase the overall transparency of financial reporting while, at the same time, develop a more reliable system of checks and balances. It was understood that compliance was both a legal obligation and good business practice.
Affecting both public and private U.S. companies, as well as those non-U.S. companies with a U.S. presence, SOX is focused on corporate governance and financial disclosure. It requires that all financial reports include Internal Controls Reporting and demonstrate that a company’s financial data is complete and accurate, with an adequate number of controls established to safeguard it. It also encourages the disclosure of corporate fraud by protecting whistleblower employees of publicly traded companies or their subsidiaries who report illegal activities.
The continued evolution of ESG on the other hand, includes a variety of factors that are often used to evaluate a company’s commitment to sustainable operations. The environmental factors in ESG offer insight into an organization’s environmental impact, including its carbon footprint, climate change initiatives, waste management policies, natural resource conservation, pollution, or efforts to decrease deforestation.
The social component of ESG examines an organization’s treatment of stakeholders (workforce, customers, providers and suppliers, government, regulators, or the local or global community) on issues such as diversity, equity, and inclusion practices, wages and salaries, and sales practices.
Lastly, the ‘G’ in ESG focuses on the governance factors and how to assess whether a company’s internal processes are able to ensure the organization, and its employees, act with professionalism and integrity.
While SOX is primarily focused on financial information — working with finance professionals and accountants — ESG is more concerned with non-financial data and metrics. It shouldn’t come as any surprise when organizations faced with these evolving and new ESG reporting requirements ask themselves.
The role of internal audit, Starting small and look at the bigger picture:
In the years that followed the introduction of SOX, the effect that it had on the internal audit profession was clearly a double-edged sword. On the one hand, internal auditors were quickly recognized as the experts needed to step into this space and provide the guidance that so many organizations needed. This resulted in growth across both the internal audit profession, as well as the various functions internal auditors were able to provide assurances for. It’s fair to say that internal audit membership more than doubled during the first few years of SOX implementation.
However, due to the urgency and level of uncertainty that SOX presented, leaning heavily on internal auditors also resulted in their spending greater amounts of time focused exclusively on SOX priorities, and significantly less time focused on those risk-based audits that organizations depend on. From an internal audit perspective it was a massive undertaking, and one that led to organizations developing SOX-specific internal audit teams.
Over the course of the last 20 years, and as a direct result of SOX, internal audit’s role around internal controls for financial reporting has become well established. Many of those same auditing skills and practices can (and should) be applied to ESG. However, an all-too-common question that’s on everyone’s mind is — “Who is responsible for ESG?”
ESG should be viewed as a top-down initiative, particularly from an organizational perspective regarding mandates, targets, and how goals are being established, monitored, and reported on. Each area or department of an organization should be aware of and responsible for their ESG initiatives. However, internal audit has an opportunity to become trusted advisors and take on more of an influential role when it comes to those first step.
How can internal audit provide the greatest value?
Organizations should reflect on the experiences they had in the early days of SOX and focus on identifying and understanding what the key controls of ESG will be. Where SOX was focused exclusively on financial reporting, ESG falls into that category of “everything else”. It comes down to the accuracy and reliability of the information. But how does an organization go about achieving that? The same way financial reporting was achieved with SOX.
Organizations have become comfortable with their financial reporting. They have been measured according to their financial results for a very long time. ESG in audit is different. It’s broader. It covers more ground and organizations will need to take some time to comprehend how to effectively turn the foundations of ESG into meaningful reports. Although it may be more complicated, the underlying processes that have been used for Sarbanes-Oxley for the last 20 years can be leaned on as a starting point when addressing ESG and identifying a methodology for assurance.
ESG presents a tremendous opportunity for internal audit to make an impact within their organizations. Because it is still evolving, and new guidelines and mandates are being released every day, a good strategy for internal audit would be to start small and identify those ESG factors that can be quickly included into your existing audit plan. Whether that’s reducing overall energy consumption throughout your office or working more closely with Human Resources to ensure new-hire practices are following appropriate guidelines, acknowledging the industry your organization resides in, understanding its risk landscape, and identifying a best-practices framework will give you the direction you need to successfully navigate ESG.
If there is one takeaway from the lessons learned when SOX was first implemented, it’s that those in the internal audit profession should avoid taking the “wait and see” approach with ESG. ESG is here and is gaining exposure and traction every day. The social ramifications of ESG alone should be enough for organizations to sit up and take notice. Understanding how to audit ESG — knowing your organization’s metrics and targeted reporting requirements, what to audit against and include in the final audit report — will better position you for success as a trusted advisor within your organization. Fill those essential Subject Matter Expert gaps early on with Audit International, identify and engage with key stakeholders, and avoid the reactionary trappings and costly mistakes of waiting too long and scrambling for solutions.
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
Our journey discussing the benefits of auditing organizational culture is coming to an end. Audit International began this series by introducing initial cultural auditing concepts in the first article. Then, in the second article, we continued by more closely examining the first half of the top ten tips that were outlined. In this, the final article of the series, we wrap up with the second half of that list and conclude our analysis.
Auditing culture-
Auditing culture requires involving a wide range of stakeholders and will require you to consider alignment of the desired culture to the actual activities of many people. As we have seen, the leadership in the organizations and the people within the business are clearly very important. To get a true sense of culture you will also need to consider organizational partners and outside service suppliers.
If culture is the way things are done more informally, then this impacts everything in your entire organization’s wider sphere. In this context, procurement may be an important stakeholder to engage with in any cultural audit to better understand their selection methodologies, allowing you to form a view, for example, on how they consider cultural fit in the selection of any third-party suppliers. It also goes beyond the selection of suppliers to how we treat them once they are in place. Does the organization treat them fairly, or is the focus on cost at the expense of other, more important matters?
Ensure that you consider both design and operating effectiveness –
Auditing work should be examining both design and operating effectiveness. Cultural reviews are no different but have the tendency to focus on design at the cost of operating effectiveness. As with all audit work, you would typically begin with a risk and control assessment which can be developed in line with the cultural levers you have identified. Typically, an auditor would then request documents, allowing some desktop analysis ahead of the interviews. Interviews with management can focus on whether they understand the desired culture and can clearly articulate this, while also identifying which levers they see as being particularly important for ensuring the culture is real and lived on the front line. Interviews should also probe the extent to which management role model the desired culture every day and ensure their teams’ activities are in line with the culture.
However, understanding operating effectiveness requires a wider approach and talking to a wider range of employees. Focus groups or surveys can be effective to gather data from employees and may provide more diverse views. If focus groups are operated, they will require additional skill, with the lead needing to manage the group so that a fair range of positive and negative views are heard.
Despite the limitations of cultural measures these too should be requested for each of the levers to understand the extent to which the organization has cultural measures and whether the results are acted upon. Measures that you may wish to consider typically involve people management activity, such as employee turnover, exit interview data, grievances raised by employees, whistleblowing information, and absence data. Other areas should also be explored, such as customer complaints data. However, collecting these may present a challenge. If culture is important in the organization, then it will be available and likely reviewed. If not, there is the potential your first audit finding on the need for management to have appropriate measures in place to track whether the desired culture is being delivered in practice.
In Audit International’s experience, there is no, single best way of conducting cultural audits. Rather, you need to form a view of what is right for your organization. One aspect you will need to consider is whether you conduct specific cultural reviews in your audit plan, have it as a component in all audits that you conduct, or draw out cultural consideration into an off-plan piece of work. I’ve seen all aspects of all three of the options successfully implemented.
Don’t go for a grand plan –
It is important that you consider how you introduce cultural auditing into your program of work. It’s a sensitive topic, and management will often be wary of audit getting too involved. Your internal audit colleagues may also be nervous about whether an area like culture can, in fact, be meaningfully audited. The best advice being — don’t go for a grand plan, but rather start small, test, and learn as you go. This includes building support from the Board and executive leadership by demonstrating, as you go, the insights gained from the cultural examination you have completed and the possibilities to go further with increased resources and business buy-in to this challenging area.
This lends itself to the suggestion to start with a pilot, or a proof of concept, where you identify an area of the business to work with and look to introduce the concept of auditing culture at this point. This should be an area where you know you have a senior auditee who is an advocate of internal audit and willing to work with you to make the pilot a success. Audit International have found that success breeds more success and considerable momentum can be delivered in this manner. Early on, it is also good to share examples of your work and the value it is bringing. I call this the “test, share, and impress approach.”
Collaborate with your business colleagues –
It is also very important to work with the business. The tip here being: Collaborate with your business colleagues – independence is a mindset. Audit International have spent time with many auditors who have been reluctant to collaborate in any deep manner with the business, citing the audit charter and the need for full independence from first-and-second-line activity. We agree, our independence as internal auditors is very important. We need to be objective in all we do to avoid threatening this. However, Audit International don’t believe independence means that we cannot work closely with the business where it makes sense to do so.
One such area, for example, is the identification of the cultural levers discussed earlier – an organization-wide conversation on this is helpful in building appropriate understanding and support for the examination you wish to conduct. Also important is the identification and quick access to relevant data for your cultural work, both at an organization-wide level, but also in divisional units of your business. There is likely to be shared interest in this area, particularly with your HR function. Given this shared interest, it makes sense for all those interested in cultural understanding to come together to share ideas and data for the benefit of the business. For example, this may mean developing a shared data area that all can access. Identify across your business who is interested in this space and join with them to share, learn, and progress.
Upskill all auditors at all levels –
Finally, ensure that the program of work you want to introduce is a sustainable approach to auditing culture. Find a way to get your people behind this approach. At heart, we are a people business and any push to audit this challenging area on a sustainable and systematic basis will depend on the skills and knowledge of your teams.
This leads to the final tip to upskill all auditors at all levels. As we identified earlier, your impact is likely to be much higher if your teams integrate consideration of cultural levers and impacts throughout your audit work and not just in any standalone audit you may do. Understanding the nuances of culture is not simply reserved for HR and psychologists but is a core competency for all auditors. This should be reflected in the recruitment and development approach for your team.
This is likely to mean that if you are going to make cultural assessment a core part of your internal audit work you will need to provide training to the audit team. This will need to cover the organizational cultural levers that you have identified, the data that can help you understand these levers, and the interviewing techniques that will need to be employed to get to actual, as well as espoused, culture. Be honest with yourself and acknowledge where you don’t have the skills that are needed. You will likely need to draw on other sources of expertise, including business and external consultancy support. These can allow you to supplement both the capacity and capability of your team.
And, of course, think carefully about how you organize to deliver this challenging area of work. Our current view is that a multidisciplinary (sometimes called Hybrid) approach is most successful. This is all about how you set up your operating model to deliver your cultural audit work. Some larger functions have established dedicated, well-resourced teams to examine culture in their organization and have staffed this with a blend of expertise, including behavioral psychologists. This group of specialists work alongside and coach front-line auditors who are then encouraged to consider cultural levers in all their audit work as we discussed earlier. Clearly, this is more relevant for larger organizations, but even in smaller functions, you may choose to appoint a cultural lead (or champion) with the responsibility to support and drive the integration of cultural aspects into all your audit work.
Conclusion –
There is no silver bullet for the successful development and implementation of a cultural audit program. Hopefully, the tips that Audit International provided throughout this series of articles will be a useful catalyst for your work in this space as you consider the conditions needed for you to achieve momentum around the idea of auditing culture in your organization.
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”
With one in five people pledging to pursue career goals and ambitions in their New Year Resolutions, Audit International have researched career experts advice on achieving these in 2023.
New Year, new (career) you! More than 20% of people toasted the start of 2023 with some form of New Year’s resolution and one in five of those pledged to pursue new career goals.
But with January now over, many of those good intentions may have already fallen by the wayside. If that sounds familiar, you’re not alone. In fact, people will typically ditch their ‘New Year New Me’ resolutions by the second week in January.
If that strikes a chord, don’t despair. Audit International has taken some insights from careers experts on their top tips on getting your career back on track.
Re-evaluate your current career choices :
For those with an established job, or who have taken time out of work to start and raise a family, it can be daunting to consider a new industry or completely change career path. However, it’s never too late to take your role in a different direction or re-enter education.
“If you’re looking to change careers in 2023, it’s important to evaluate your previous experience up until now. Consider which parts of your current or past job roles have brought you the most satisfaction or fulfilment, as this can help guide your new career path,”.
Adopt a continuous learning mindset :
Passing all of your exams is an amazing achievement, but that’s when the real learning starts. “Don’t assume you know everything now. Listen and ask questions and make notes and look things up. Every day is a school day!”
Work on your soft skills :
To get ahead in your career it’s also important that you develop soft skills that complement your technical prowess. “As part of your role, you will be expected to provide advice to clients and companies on any number of specific issues they may be experiencing, so developing strong soft skills including clear and concise communication, empathy, and the ability to make decisions to help resolve conflict will be key to your continued success.”
Develop a killer network:
Natural networking is everything. LinkedIn bombing everyone you think might be useful to you is annoying and will rarely achieve anything. Show an interest in everyone you meet and connect in a more genuine way. Try not to just focus on people you think are ‘important’.
Be authentic :
As an accountant, you are well-organised, a skilled number-cruncher and have a keen eye for detail. But as your career progresses and you become a team leader, you will need to focus more on management and people skills. If you get promoted to a management role without any formal training, it can be easy to act like the type of manager you’ve seen in the past. “People buy people, so be yourself, not the manager you think you should be”.
Focus on developing relationships :
Accountancy is a task-oriented job and it’s easy to get lost in the daily grind of completing tasks and hitting deadlines. But the real value you add as a manager is building relationships with staff and being an enabler and facilitator for the team. That means getting to know your colleagues on a personal level and understanding their strengths and capabilities.
Keep your eyes open for growth opportunities :
Don’t get bogged down in short-term deadlines and tasks. “These need to be done for sure, but you should also look more widely to find new areas of growth and challenges that can help you advance in your career”. That could mean studying for a qualification, taking on new responsibilities, or joining a cross-functional team. “Always look for ways to build your skills and contacts and your career will progress nicely.”
Don’t limit yourself to one area :
One of the best ways to elevate your career is by making sure you don’t limit yourself to just one part of the accountancy industry. “Gaining experience in a variety of roles – especially during the first few years of your career, as you decide the areas in which you thrive and most enjoy – will build your confidence and will provide you with essential skills that help boost your long-term career prospects”.
Connect with a mentor :
Regardless of where you are in your accountancy career, having the advice of someone more experienced than you can be invaluable. If you are unable to secure a mentor through work, it is also worth approaching people that you work with who could help you, or you could even look at joining an association that could pair you with someone.
Don’t put too much pressure on yourself :
It’s always good to be ambitious when it comes to your career and education, but avoid putting too much pressure on yourself when it comes to achieving all of your goals or training courses by the end of 2023. “Comparing yourself to others or putting pressure on yourself can lead to you feeling overwhelmed or burnt out. Take as much time as you need and find flexible options that work for you, especially if there are other important childcare or work commitments to take into consideration.”
Be ready to flex. Having a long-term career plan is great. However, things change and you will get frustrated if you can’t adapt or sometimes go with the flow.
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”
There is currently a misalignment in the world of Internal Audit. As Richard Chambers and AuditBoard’s 2023 Focus on the Future Report reveals, there are key areas where significant gaps exist between risk levels and planned efforts. The ability to attract and retain top talent, macroeconomic factors and geopolitical uncertainty, and business model disruptions due to the evolving risk landscape were all listed as top concerns for major organizations, yet only 13-20% of businesses have meaningful plans to devote substantial resources to these issues. Internal audit teams need to be ready to identify and address this kind of disconnect to ensure that their organizations are positioned for success in 2023. In this article, Audit International will identify three top internal audit trends, the challenges they present, and how internal audit teams can leverage software solutions to deploy team resources strategically against the most pressing concerns — setting themselves, and their business, up for success.
Trend 1: Velocity of Risk and Technology Change
Teams must continually provide assurance while adapting to evolving risks, digital disruption, and regulatory changes. Today we’re seeing significant contributions from the digital revolution, climate change, and stakeholder expectations, as the speed of decisions, the amount of connectivity, and the availability of data have all increased. Companies are learning that they have to balance pressures regarding what’s coming from governments, investors, and society as a whole. Stakeholders expect companies to act legally and with a conscience, and regulators are focusing on things like climate change, data privacy, and security.
Challenges in this area hit in numerous ways. First, there is an expanded purview required from emerging technologies and related risks. Second, there are repeated shifts to audit scope that put new burdens on teams. Third, there is an increased depth and breadth of data that brings along associated issues — including data reliability, related required team efforts, and resource constraints.
Technology can help audit teams develop solutions for these issues. Audit planning software accelerates risk and change responses from teams. With this preparation, teams can create risk-based audit plans with risk metadata to allow for efficient execution and continuous assurance.
Trend 2: Growing Internal Audit Talent Gap
Staff shortages, changing attitudes towards work, and a pre-existing skills gap are increasing talent risk and influencing how internal audit teams approach their work. Many teams are reporting that they are losing talent and struggling to replace them. Meanwhile, for the remaining team members, expectations are growing. They want to do more, and we need to keep them engaged. We have to support the folks that we have and give them opportunities to work in cybersecurity, sustainability, and other areas of interest.
The challenges created by the talent gap are as expected. Due to greater cost-cutting and efficiency demands often put in place by organizational leadership, teams are being asked to do more with less as headcount may be frozen or cut. There are the aforementioned difficulties retaining people and improving their skills, plus there are increasing specialization and training needs for team members.
A technology solution in this area is software with resource planning capabilities. This can help teams manage, optimize and retain talent by deploying resources more strategically, and it allows teams to improve individual and overall skills, efficiency, and experiences.
Trend 3: Align With the Business Objectives
The highly competitive corporate landscape and economic disruptions are driving the internal audit profession to refocus efforts on improved strategic alignment. Richard Chambers speaks often about auditors needing to become agents of change. When contemplating initiatives like cybersecurity, diversity, equity, inclusion, and third-party risk management, executive teams and audit committees all want better strategic alignment from internal audit teams. Internal audit must understand and embrace stakeholder needs and challenges so that we can better support their strategic initiatives.
The challenge for internal audit teams in this area is aligning audit with business priorities, which isn’t always as simple as that might seem. Plus, there is an increased requirement to validate internal audit resources. We have to start thinking in new ways, provide more value propositions, and be able to deliver more in less time.
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”
Audit International believe effective communication of information on risks associated with hazards and control measures, is an essential and integral component within the risk assessment process. The fundamental goal to communicate the outcome of your risk assessment thereafter to the rest of the organization, contributes to the health and safety of your (peer) employees.
A risk assessment is usually executed by you as a safety professional, being part of the safety department of an organization. For you, the outcome of the risk assessment is often quite clear and simple to follow. However, struggles do arise to communicate about risk outside the safety department. How do you communicate to different organizational levels effectively? How do you make sure everyone in your organization is not only aware of, and but also understands the risks they are dealing with? Audit International have these tips.
In this short blog, we will focus on the Communication and Consultation step. You must communicate about your risks and its treatment, but how do you handle this? If you communicate too much no one will know what to listen to nor remember it. If you communicate too little, no one will understand the context or details of the information. Use the tips below to overcome such struggles.
Tips for effective risk communication:
1. Have a common ground
Before talking about risks, people need to understand the basic concepts of safety. Do not assume that everyone is on the same page regarding risks. Define concepts clearly to avoid confusion. Make sure that there is a common definition of risk established, so employees manage risk based on the common concept and view of what constitutes as risks. Inform your organization about the nature of the risk management and why you are doing it.
2. Make sure everyone can understand
As you communicate to different levels and departments in de organization, it is convenient to tailor your message to the one who receives the message. One of the goals for risk communication is to provide meaningful, relevant, and accurate information in clear and understandable terms. Be aware that these criteria can be different for people on the operational work floor than for higher management. Adjust your information to your target audience, so everyone in the organization knows their role in managing the risks they face. This will help you filter the information effectively.
3. Consider the form of communication
How often do you want to communicate to your colleagues? Depending on which colleagues, this could be every day, every week, monthly, or yearly. If the frequency is yearly, writing a report will not be too much trouble. If the frequency is weekly, writing a report will likely be too time-consuming to create and read. It won’t be long before your employees are demotivated which will likely lead to less clear communication – or worse, confusing communication! Think about other ways of communication, such as videos, posters, or interactive means. A one-sided communication strategy is likely to be less effective.
4. Build a sense of inclusiveness and ownership
You know that managing risk is not a one-person job. This process involves different departments and colleagues. It is impossible to manage risk effectively if there is no communication and consolation with each colleague that is involved – with each stakeholder. To optimize the communication and consultation you need to make sure that each stakeholder understands, knows and agrees what is expected from them in relation to the management of risk.
By communicating on risk management, you will involve your colleagues and create inclusiveness and ownership. Ownership is important, because let’s face it: risks that are not owned are often not managed. Clarity on personal responsibilities is very important to prevent incidents from happening. There is no need to have accidents that could have been prevented through effective communication between stakeholders.
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”
Audit International recommend five ‘Under the Radar’ Areas to Audit that May Not Be on the Audit Plan.
As internal auditors, we all have a “spidey sense” of what we should be auditing.
Sure, we should, of course, conduct comprehensive risk assessments that drive our audit plan, and many of the usual suspects will end up on that plan: cybersecurity, regulatory compliance, financial reporting, third-party relationships, and you know the rest.
But there are things, we would strongly profess, that should be audited, even if we aren’t formally auditing them and they never make it to the actual audit plan. Just by being aware—casting that web, if you will—you should constantly informally “audit” a few critical areas.
What might be some of those things we should (lower case) audit, even if we aren’t (upper case) Auditing them? Here’s Audit Internationals take on five:
1
Culture: Are Disconnects, Even if Subtle, Surfacing?
So much has been written and said about doing culture audits and internal audit’s potential role in doing such a review. Perhaps, however, your organization doesn’t support internal audit doing a full-blown culture audit. Does that mean you throw your hands up and do nothing with the topic? Heck, no!
Look, we are among the very few in the organization who have the benefit of both grasping the desired culture and viewing the entire company because of our day-to-day work. So, why not leverage that and tune into what is going on around us and notice the organizational behaviors, actions, and attitudes that are consistent with, as well as (importantly) counter to, the desired culture.
So, what’s an internal auditor to do?
Some caveats, though. First, be sure you completely understand the desired culture, both what is formally stated through things like the organization’s listed core values as well as what is implied in the “how things are done around here” subtleties. The formal and the informal culture are equally important. Then, as you go about your work in various departments and interact with people at all levels of the organization, be cognizant of behaviors, language, demeanor, protocols, and other elements that seem inconsistent with what you expected.
Now, if you witness such imbalances, and you’ll know because it will make you a bit uncomfortable, talk with close colleagues or discuss it amongst your team. If something seems amiss, continue to keep your eyes and ears open and provide your internal audit function leadership with examples of what you are witnessing. If there are culture issues in a particular area of your organization, it is likely manifesting itself in a number of other issues as well. Your internal audit function leadership will guide you on what to do and may provide guidance on the next course of action. Chief audit executives will need to consider when and how to elevate such delicate issues. Yes, it’s a sensitive topic, but something that might be critical to address. Your spidey sense will guide the way.
2
Employee Engagement: Are People Checking Out?
While it has been a topic in the corporate world for more than 20 years, at least since the Gallup Organization and their Q12 employee survey instrument brought it into the lexicon, “employee engagement” has re-emerged these days. By now, we’ve all heard the new buzz phrase “quiet quitting.” While it’s a catchy label that has been slapped on what is, in essence, just disengagement, it’s not to be taken lightly. Employees who have become disengaged in your company’s mission, vision, and values don’t have passion to do their best. This should be deeply problematic to executive leaders and, in turn, to you. It is a significant and costly drain on everything your organization does.
So, what’s an internal auditor to do?
Just like with the culture topic, we, as internal auditors, interact with more of the organization across all levels (along with HR) than most anyone else in the entire organization. Therefore, we have our finger on the pulse when it comes to engagement and its evil twin, disengagement. Do we have a general sense though the course of our internal audit work that people care or if they are they just going through the motions? Sure, we do.
We don’t need to be scientific about it, and we don’t have to call anyone or any function, department, or location out, per se, but if we see that there is a trend developing toward greater levels of disengagement, let it be known. Make it a part of what we absorb about the organization on a daily, weekly, and monthly basis. Elevate the concerns, whether to HR, department levels, or even the senior management. In other words, don’t ignore it.
3
The Physical Facilities: Are Things in Disrepair?
As much as we may not all be going into a physical office as much anymore, many employees will still spend at least some time in the office or at company facilities. And, the physical state of the office location, branch, facility, or building space is important. Not only can facility disrepair be unhealthy or unsafe, but it can also just negatively affect employee psyche or customer impressions. Pay attention to what things look like and what is the state of the physical environment around you. It may signal deeper problems or an overall neglectful view of the business.
We all have stories about what we’ve witnessed. I remember walking past a locked closet and smelling a damp odor. I could have just ignored it, thought it was just me, or figured that someone else was probably aware of it. Instead, I decided to mention it to the facilities manager of the location. And, lo and behold, behind the rightfully locked door a roof leak had infiltrated the space and it was a wiring closet. It could have been a big problem if it were ignored for any length of time.
So, what’s an internal auditor to do?
Keep your eyes and ears open as you go about your work. Does something seem amiss regarding the physical location? Mention it to someone who could do something about it. What’s the worst that could happen? They tell you “thanks, we are aware of it.” At best, you help address an issue before it gets out of hand. Sometimes we all become blind to our physical surroundings because we’ve just been there for so long. But a fresh set of eyes and ears might just help the organization out and make employees and customers even more appreciative of the physical space they show up to and that the organization spends so much money on. Internal audit can have a unique perspective of noticing what gets unnoticed.
4
The Parking Lot Check: Is Fraud Hiding in Plain Sight?
Closely related to the physical state of the facilities is the state of the employees. Ever see a change in someone’s habits that don’t sync-up with what has gone on in the past, and you wondering “what’s up with that?” Perhaps someone is showing up to the office in a new luxury car, expensive clothes, or talking about some lavish vacation they went on?
Most often, there is a great explanation, and it is none of our business. But, also, any of us who have been around the block a few times will also know that, occasionally, these changed behaviors are clues that something is amiss and that someone may be on the take. You could call this “doing a parking lot audit.” So many frauds and embezzlements have left a trail of these clues as the perpetrator wanted to channel their ill-gotten gains into the fruits of luxury and apparent success. It’s not an outright indicator or fraud, of course, but it might be a red flag to dig deeper, especially if things weren’t adding up already.
So, what’s an internal auditor to do?
Just keep your eyes and ears open, being observant to uncharacteristic behaviors, purchases, and chatter could provide clues to someone who is taking advantage of their position and situation to pilfer from your company. No, don’t go around accusing people of things where you have no proof, of course. But eyes open and be vigilant. And, if you see something, say something to a trusted colleague within your internal audit department. If necessary, elevate it within your department and, if warranted and approved, do some follow-up in a clandestine manner. You may just catch something in its preliminary stages and head it off at the pass, so to speak. Most people steal from the company in small increments, and it escalates from there if they feel they are getting away with it undetected. But, in hindsight, there were usually always clues … perhaps no further away than in the parking lot.
5
Hotline Activity: Is Volume Up, or Has Volume Decreased?
Most internal audit functions have some role in monitoring their organization’s whistleblower hotline for employees, and sometimes also third parties, to file complaints. This may seem like a no-brainer, but you’d be surprised how often small complaints (that point to bigger problems) go unnoticed. Your internal audit function may have complete ownership of managing what comes though, you may partner with someone else in the organization, such as compliance, human resources, or legal, or you just get things passed to you for review or investigation as needed from one of these organizational partners. Regardless, you need to have some role in monitoring the volume of activity. What types of activity are coming through? Are there recurring issues? What are the trends? It doesn’t take an audit, but it does take awareness. Changes in volume can be very telling, and that could be changes in either direction (increased or decreased volume).
Increases in activity might spell some brewing issues of a more macro sense and, alternatively, decreases in volume may spell a level of distrust in the confidentiality of the hotline or a perceived lack of seriousness with which reported items might be getting addressed.
So, what’s an internal auditor to do?
It doesn’t have to be you, so long as someone in your internal audit function is attuned to the trends, both in terms of volume and types of activity. And, if there are notable changes in the trends, up or down, it might be time for a deeper understanding of what might be going on. This could be a signal of troubles brewing that are inconsistent with the desired culture.
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To be clear, internal auditors don’t need a formal audit plan initiative to keep abreast of important developments in the organization. It’s not easy, I know, as the formal audit plan has us busy enough, but a little observation may go a long way. Head up, eyes and ears open, use all your senses and leverage your well-honed intellectual curiosity and professional skepticism. Do some ad-hoc auditing of things you might not be able to (upper case) Audit and don’t necessarily make it to the formal audit plan. The organization will be better for it, and you will enhance your engagement and contributions innumerably.
As popularized in the Spiderman comics of yesteryear and said in more recent movies, “with great power comes great responsibility.” Wield it judiciously!
“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:
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Here at Audit International, we have seen a significant shift in the way in which environmental, social, and governance (ESG) data has been perceived in recent years. It has gone from being an ‘add-on’ to being a vital opportunity for corporations to boost their competitiveness. As consumers become more discerning about environmental, social, ethical, and responsible business practices, organizations are increasingly starting to realize that reporting ESG data can have significant brand and reputational benefits.
However, this is just the beginning. The value of ESG data extends beyond reporting—when handled properly, it can unlock value for an organization in a variety of ways.
What is ESG and ESG Reporting?
It’s important to note that there is a distinction between ESG and sustainability. The terms are often used interchangeably, but there are important differences. Essentially, sustainability deals with how an organization’s operations impact the environment and society, whereas ESG has more to do with how an organization’s environmental, social, and governance initiatives affect its financial performance.
According to the Center for Audit Quality (CAQ), “ESG reporting encompasses both qualitative discussions of topics as well as quantitative metrics used to measure a company’s performance against ESG risks, opportunities, and related strategies.”
How companies can use ESG data to their advantage
When organizations treat ESG reporting as more than a box-ticking exercise to meet regulatory obligations, they stand to reap a number of benefits, as follows:
● Profitability and sustainability: Including ESG data in an extended planning and analysis (xP&A) strategy allows an enterprise to see how that data affects financial and operational data, which is key to making ESG initiatives sustainable and profitable.
● Risk management: Neglecting ESG issues can result in financial or reputational damage. Thus, all organizations should ensure that they incorporate ESG data into their risk management strategies. By voluntarily disclosing this information, they will demonstrate that they are taking sufficient steps to protect themselves and their stakeholders from ESG-related risks.
● Competitive advantage: Focusing on ESG can help an organization gain a better understanding of what matters to its stakeholders while also identifying opportunities. Furthermore, reporting ESG data will help stakeholders compare the organization with its competitors. This works in the organization’s favour if it is outperforming peers on the ESG front.
● Uncovering critical operational drivers for decision-making: ESG data can help an organization see where sustainable changes could improve efficiency and make its business more ethical and equitable. This can greatly enhance the decision-making process.
What are the main challenges to effective ESG Reporting?
ESG reporting is continuously evolving as governments announce new standards that companies need to comply with, as well as a new mandatory International Sustainability Standards Board (ISSB) standard that is expected to be announced by the end of the year (2022). It also touches every financial process. For these reasons, companies can find the whole ESG journey intimidating.
The following are some of the main obstacles that need to be overcome:
● Several ESG optional frameworks: The Global Reporting Initiative (GRI), Task Force on Climate-Related Financial Disclosures (TCFD), and the Sustainability Accounting Standards Board (SASB) are some of the more notable ESG frameworks, but there are plenty of others, many of which are specific to certain regions or industries. It can be challenging for companies, especially those operating in multiple countries, to know which ESG standards and frameworks to adhere to. This will all change when the mandatory ISSB standards are announced at the end of 2022.
● Complexity of data management: Whether meeting regulatory requirements or carrying out voluntary disclosures, companies need to be able to collect, translate, and process ESG data. This is a task that is complicated by the fact that the data is often siloed across different IT systems and is often stored in different formats. In addition, sustainability can be hard to quantify.
● Lack of ESG insight to inform decisions: Many organizations have difficulty seeing the connection between ESG data and financial results, especially when captured in spreadsheets, which means they are unable to use the data to improve their bottom line and sustainability initiatives.
“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:
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Amidst issues like supply chain complexity, economic uncertainty, and increased digitalization, Audit International are finding many organizations are adding vendors or changing their existing relationships with those they currently conduct business with.
Working remotely has prompted many companies to add cloud vendors. Supply chain backlogs might have prompted your business to switch to local vendors. Or maybe you’ve added marketing agencies or other types of consultants that have flexible capacity, rather than increasing headcount.
These decisions can help businesses adapt to changing conditions and build resilience, but working with vendors may also introduce new risks. While you might feel like you have a handle on issues like in-house data security processes, you need to be sure that vendors also align with your needs in these areas.
Internal audit teams can play an important oversight role when it comes to vendor risk management. While they might not be making specific vendor management decisions, they can still be involved in making sure proper due diligence is followed when selecting vendors. And once vendor relationships are in place, internal audit teams can monitor these arrangements to ensure organizations aren’t opening themselves up to new risks.
What are the top vendor risk management issues?
Working with third parties like software vendors, managed service providers, cleaning companies, etc. can help businesses fill gaps in current capabilities, increase efficiency, and more. Yet, internal audit teams also need to make sure that their organizations are accounting for any and all potential risks:
Cybersecurity: Internal audit teams should review vendors’ cybersecurity practices to assess whether these meet your organization’s expectations, for example, data security controls and remediation capabilities.
Compliance: Third-party vendors can also create compliance risks, such as improperly storing customer data or engaging in illegal business practices. Even if these vendor issues do not lead to legal action against your organization, internal auditors should aim to get ahead of these issues to avoid reputational damage.
ESG: Environmental, social, and governance (ESG) scrutiny is increasingly extending into supply chains and can also create reputational risk. Internal auditors will want to assess how vendors align with their own ESG goals. This may in turn lead to implementing additional controls, for example, around data sharing practices so that your organization will be able to verify issues like vendor emissions.
Quality: Don’t automatically assume that vendors will provide the quality you’re expecting, even if they come recommended or are widely known. Internal auditors need to ensure that their organizations still conduct proper due diligence to see whether working with that vendor will provide the quality of work you’re expecting. Managing risk can also include looking at vendor performance controls to see if existing third-party vendors maintain appropriate quality standards.
These are just some of the many critical risks that can come from working with third parties. Keep in mind that vendors may also have their own networks of third parties, which could ultimately affect your organization.
While it might not be possible to know every connection point that your vendors have with other third parties, you would likely want to assess what their own third-party risk management practices look like.
How can internal auditors improve third-party risk management?
Internal auditors shouldn’t be the only ones responsible for vendor risk assessments, but they should be mindful of the aforementioned vendor risk management issues and collaborate with other departments to stay on top of these risks.
For example, internal auditors can collaborate with IT leaders to create a vendor security due diligence checklist. From there, internal audit controls can make sure that this checklist is used across all vendor reviews.
Internal audit leaders can also integrate analytics into audit processes, such as collecting performance metrics on third-party vendors, to assess whether they meet your organization’s quality expectations on an ongoing basis.
Too often, however, adding analytics to audit reports is a manual, labor-intensive process that can create its own risks, like data errors. TeamMate Audit Benchmark found 79% of internal audit teams manually leverage data from other applications.
Audit tools like TeamMate+ can help internal auditors get the third-party data they need through automated API exchanges with other platforms, which makes continuous monitoring of risk more feasible. They can then create automated reports to share insights with other departments to stay on top of third-party risk.
By aligning with these steps and staying on top of evolving vendor management risks, internal audit teams can help their organizations stay safe while getting the most out of their third-party partnerships.
“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
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– US 001 917 508 5615
E-mail:
– info@audit-international.com”
Here at Audit International this week, we are are all talking about the Chartered Institute of Internal Auditors dropping their ‘Risk in Focus 2023’ report. The report compiles the results of 9 in-depth interviews, 4 round table events with 39 participants, and responses from 834 Chief Audit Executives (CAE)’s from across 15 European countries. In a nutshell, the report has some solid contributors, meaning, the top 10 areas which are concerning other CAE’s, might be worth you thinking about also – especially as you prepare your 2023 annual plan.
The Risk in Focus 2023 report has had a great refresh and shows the movement of each of the risks over the years. This year’s report shows 15 categories worth consideration:
– Mergers and acquisitions
– Health, safety and security
– Communications, reputation and stakeholder relationships
– Fraud, bribery and the criminal exploitation of disruption
– Organisational culture
– Organisational governance and corporate reporting
– Financial, liquidity and insolvency risks
– Supply chain, outsourcing and ‘nth’ party risk
– Business continuity, crisis management and disasters response
– Climate change and environmental sustainability
– Digital disruption, new technology and AI
– Changes in laws and regulations
– Macroeconomic and geopolitical uncertainty
– Human capital, diversity and talent management
– Cybersecurity and data security
The report finds that the greatest movers, in terms of focus / attention given to this particular topic by CAE’s, found the following four categories had the most increased attention and focus since 2020:
– Macroeconomic and geopolitical uncertainty
– Human capital, diversity and talent management
– Supply chain, outsourcing and ‘nth’ party risk
– Climate change and environmental sustainability
This years report also highlights the impact the war in Ukraine has had on many of the businesses and risks highlighted in the report.
For each of the risks, the report provides suggestions on how Internal Audit can help the organisation.
“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”
