Being an effective internal auditor in the fast paced and technologically savvy environment we work in today can be challenging and overwhelming. Here are two keys that can help set an internal auditor up for success.
Take time to develop a thorough plan.
Audits will be plagued with inefficiency and missed deadlines if the planning stage is not given the time it deserves. Steps often overlooked are a thorough review of policies and procedures, research of the audit area, and performance of walkthroughs. These provide an opportunity to tailor the audit program to the risks and identify whether consulting or co-sourcing with subject matter experts will be necessary.
While planning may have historically only been 20 percent of the budgeted time, a project should allocate 30-35 percent to develop a proper and thorough plan. This additional time will pay dividends by identifying more significant items earlier, reducing field work time and avoiding surprises during wrap-up. A properly planned audit will also enable the auditor to focus on adding value by identifying an increased number of best practices or process improvements.
Develop a trusted advisor relationship with auditees.
Audits should be approached with the awareness that both the auditor and auditee not only can, but should, be satisfied with the results. As explained best in The Trusted Advisor by David H. Maister, Charles H. Green and Robert M. Galford, “Great trusted advisors can be relied on to tell the client the bad news, along with the good.” Developing a relationship of trust with the auditee will promote an understanding that your role is to ensure the safety, efficiency and ultimately the profitability of the organization and the department.
Developing a trusted relationship does not happen overnight and requires effort over time. Schedule time to communicate face-to-face to share the audit objectives and value proposition. This personal touch builds rapport and trust early, which will help promote collaboration and open communication during the process. Look to provide value, education or ways to improve throughout the audit process. Another way to build trust is to discuss key findings early in the process as no one likes surprises.
Implementing a thorough plan and developing trusting relationships can lead to a successful audit whether serving as an internal auditor employed by the company or working as an outsourced internal auditor. Employing these strategies will ultimately help identify risks and promote efficiency as auditors understand not only what the financial, regulatory and internal control risks are, but also what keeps the auditee awake at night regarding the business unit’s operational and strategic goals and risks.
NOTE: Any advice contained in this material is not intended or written to be tax advice, and cannot be relied upon as such, nor can it be used for the purpose of avoiding tax penalties that may be imposed by the IRS or states, or promoting, marketing or recommending to another party any transaction or matter addressed herein.
Elena Borjas is a member of the financial services industry team, performs financial statement audits and specializes in leading internal and compliance audits, including mortgage banking projects. She is experienced with FDICIA, BSA, ACH and many other compliance requirements. Elena joined AGH in 2011 after spending nearly eight years at two banks, where she specialized in retail operations (including lending), branch management and certain compliance matters.
Elena is a certified public accountant and a member of the AICPA and KSCPA. She earned a bachelor’s degree in accounting from Wichita State University and was recognized by the Wichita Business Journal as a 2016 Emerging Leader. Elena is active in the community as a board member for the Wichita chapter of the Institute of Internal Auditor and as a steering committee member of Heartland Compliance. She is also a member of Young Professionals of Wichita and a United Way Young Leader.