Anyone providing products or services to customers should want to know what customers think about the product/services. Internal Auditors typically solicit feedback through client satisfaction surveys. There are a variety of ways to solicit opinions including live interviews and questionnaires. Successful questionnaires will help audit functions determine how well they are achieving goals and objectives. Many auditor simply copy surveys from other departments. I believe auditors must create surveys specifically for their operating environment. Successful surveys must consider the Stakeholders, the Questions and the Re
Many organizations ranging from small to large, public to private are investing in internal auditing functions. Some do it only because they are mandated by law, others because it is a good personnel development tool, and still others realize the benefits of having internal consultants. Organizations can reap substantial benefits from an effectively utilized audit function. However, an ineffective internal audit execution strategy can waste money and time and frustrate audit personnel. The following 4 practices can significantly impact
Identifying risks and evaluating risk mitigation techniques requires auditors to gather evidence to support conclusions. This evidence must be sufficient, relevant and reliable. Classic textbooks on auditing divide evidence into several categories, however,
Have you ever had an audit client who seemed to have all the answers to every query immediately. They have a presence that is either captivating or intimidating or both. They deliver explanations to you with an unmoving confidence. It is important to consider that confidence does not necessarily equate to competence. And overconfidence can
Star Wars is a classic story that centers around a young slave named Anakin Skywalker who discovers he is one of a special set of people who possess an energy known as the “force”. A Wikipedia entry describes the force as
“an energy field created by all living things [that] surrounds us, penetrates us, [and] binds the galaxy together.” The Force allows users to perform various supernatural feats (such as telekinesis, clairvoyance, precognition, and mind control) and can amplify certain physical traits, such as speed and reflexes
Knowledge and Networking are the ultimate keys to career advancement. Historically, obtaining both effectively was reserved for the exteremly seasoned professional The internet, specifically search engines (like Google) and news feed aggregators, have been instrumental in flattening out the learning curve. However, knowledge is only one element to successful career management. It is important that we also develop and maintain a sound support network. Having a support network is just as much about giving as it is getting. Therefore, volunteering your time, talents and knowledge is fundamental to building and maintaining a successful support network. The following is a list of ways internal auditors can
In a recent article, Richard Chambers, IIA CEO, identified the following “Five Classic Myths About Internal Auditing”
Internal auditors are accountants by training.
Auditors are nit-pickers and fault-finders.
It’s best not to tell the auditors anything unless they specifically ask.
Internal auditors follow a cycle in selecting their audit “targets” and use standard checklists so they can audit the same things the same way each time.
Internal audit is the corporate “police function.”
These “myths” are spot on. But how do we overcome the
In 2007, I found myself working for what would soon become a failed financial institution. That is a nice way of saying that the bank would no longer be in business. I spent the previous 8 or so years in the financial services industry. Unfortunately, internal auditing jobs in the industry were not plentiful in the city where I lived. Grant it, I have experience in several industries, but I was able to truly connect with clients in financial services. For quite some time, I thought I was able to relate because I had some expertise in the industry and could “speak the language”. The next 5 years taught me a lot about my role in the profession of internal auditing and some fundamental truths about working
Criminals and villains are oftentimes portrayed as menacing, ugly figures. Take for example, the Big Bad Wolfe or Goliath. These figures are easy to recognize and the mere thought of them brings fear to many children. In business, we tend to focus on the easily recognized risks while ignoring meek and unassuming items that slowly eat away at the heart of business.
The Importance of Testing Estimates and Assumptions
Contrary to belief, accounting is not a field that is black and white in application. Organizations are allowed to “estimate” certain items or mark others to fair market value or depreciate some in a manner of their choosing until the book value reaches zero. Each of these has some sort of effect on income statements and balances sheets. In theory, devious organizations can manipulate these items to their benefit. As part of integrated internal audit engagements (i.e. financial, operational, information technology & compliance), it is beneficial for
I recently wrote about 4 different auditor personality types. This article received a lot of visits, votes and comments. Check it out if you have not already. The purpose of that article was to identify some of the personality traits that we as auditors exhibit. Because communication is a two way street, today I want to discuss 4 audit client personality types. We must recognize
Have you ever had a client protest that you could not possibly audit their area because you are not an “expert” at “what we do”? This is a very difficult situation to encounter. Oftentimes, we attempt to “prove” to the client that we are qualified to perform the audit. We begin listing our skills and experience to demonstrate our proficiency. The truth is, we
Observation and Inquiry is an important skill set that must be in every auditors toolkit. It requires us to remain objective at all times. I find it interesting how this skill is not only applicable to auditing, but also in “life outside of audit” interactions. I recently wrote about what appeared to be bribery at the London Olympics. Further inquiry disclosed that this normal and acceptable behavior. Well, I have noticed another instance of good observation, ineffective inquiry.
Early in my career, I had an audit client teach me a valuable lesson. He taught me (1) there is power in the questions we ask (2) not all clients are forth coming with information and (3) as auditors we need to learn to ask better questions. We were interviewing the client as part of our preliminary planning. The more senior auditors on the engagement directed the questioning. Of course they asked the most popular and probably the least useful question that many auditors ask…What keeps you up at night? The client responded, “Nothing, I sleep very well”. While this was not the ideal answer, it made me question how we “question”. I understand the intent of the “what keeps you up” question. We really want to attempt to understand if our clients have any concerns. But let’s face it, we are auditors. Many clients are not 100% forthcoming. I believe that there are 6 better questions
What happens when your audit clients substantially or fully remediate identified control issues prior to the final report distribution? Do you (1) remove the item from the report, (2) include the item in the report with the management action plan as if no action has been taken or (3) include the item in the report, credit
Are your exit meetings oftentimes explosive events in which you and your client are in consistent disagreement about the issues? Or, do you find that sometimes your clients are surprised by the nature and extent of the issues. Exit meeting preparation and communication begins well before the formal exit meeting. As a matter of fact, it begins prior
Dictionary.com defines “world class” as ranking among the world’s best. So what does that really mean for an internal audit department? The scope and nature of an auditor’s job varies by organization, size and region. As a result, “world class” is difficult to clearly define. However, there are a few characteristics that can enhance the value an audit function delivers to an organization. I believe these characteristics surround the Personnel, Practices, Perception and Partnerships
It is a well known fact that carrying a clip board can get you into almost any business. Depending on the circumstances, a clip board and a hard hat can get you into place that you may otherwise not be able to access. Many con men have used this technique. That is why, a recent news story about an attempted robbery of a Dunkin Donuts should be of no surprise to anyone.