Admin ji
by Admin ji
Internal Audit Best Practices
May 30, 2021 in Internal Audit
This is the Internal Audit Awareness Month. To celebrate this I am sharing my top 5 practices for Internal Audit.
- Communicate, Communicate and Communicate: I ensure that the communication between internal audit and auditee are free flowing. Building trust is one of the hallmark of a good internal audit function. Internal Audit need to communicate at all stages with the concerned auditee. Planning, scheduling, advance intimation, kick off, regular meeting to update, closing meeting, draft report, final report, audit committee presentation and follow up for open issues, at each stage the communication is required. Communication can take shape of mail, chat message, phone call or a personal visit instead of only email or system.
- Sharing of Audit objectives/ Audit program, Audit Test: Internal Audit is an open book activity and not a secret activity. Some Auditors does not want to share the audit program, audit checklist, audit test. They should go back to the purpose of internal audit. Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. I believe that if auditee start using audit tests to ensure that controls are effective, then its a win for internal audit. Lets consider a situation where your performance is getting assessed but you don’t know the criteria for assessment; would you consider this situation fair? (if you doing a fraud investigation, then you need to maintain confidentiality to meet the investigation objectives.)
- Be constructive/ positive and avoid negativity: Internal Audit is associated with lots of negativity. A large proportion is due to the fact that its viewed as a fault finding activity. A large number of auditor still indulges into fault finding and lots of management expects internal auditors to find faults. However, internal auditors can still make constructive comments and create a positive environment while discharging their duties. They should do a minor in communication and/or read lots of books on communication/ negotiation/ persuasion.
- Focus on issue and don’t be obsessed with your recommendation: A good number of audit, provide audit recommendations. While its a good thing to do, provided process owners were involved into the recommendations process. With the process owner involved in the recommendation process, they own the action plan. As an internal auditor, our role is to inform about the risk. Management can still decide to do nothing.
- Plan for the future: While it is easy to plan for past, management values the efforts to protect the future. Whenever organisation planning to roll out a new process, new policy, new system, management want to ensure that they have all the right things in place and taken care of all the risks that can be thought off. Internal audit is a valuable tool in the arsenal of management to ensure that. While operations may have a better and deeper knowledge about the operations, internal audit understand the inter relationship between various functions, compliances, weak areas in other processes. By reviewing pre and post implementation, Internal audit can become a truly business advisor.
Call for action:
Inputs/ comments/ suggestion: I welcome inputs/ comments / suggestions from readers on how to approach this issue. Feel free to correct me, educate me.
Credits :
Written by : Mr. Manoj Agarwal
Linkedin Id: https://in.linkedin.com/in/manojbagarwal
by Admin ji
The Audit Diaries | S01 | E03 – The Cunning Auditee
April 24, 2021 in Internal Audit
The Audit Diaries | S01 | E03 – The Cunning Auditee
The Internal Audit Diaries
Season 01 : Managing Auditee
Episode 03 : The cunning Auditee
In this episode of audit diaries, today we will discuss about the cunning auditee. He is the most dangerous of all. He is smart, he is friendly and on the top of it he is very cunning. He always tries to make his numbers in front of every one, be it his boss or you or higher management. First, he creates a mess all by himself only to act at Saviour in the end.
He would mould a situation to later on highlight himself- In a small and very common example, he would not share readily available data critical to observation when once highlighted by the auditor, but, later on, when the observation is highlighted to the management, he would share the same data (which he chose not to share when demanded previously) only to prove that he had a back-up if some process related audit observation arises. In short, he is a Saviour!
Few other acts of the cunning auditee:
- In front of you(auditor) he will tell you loopholes in other processes (Those that do not involve him)
- In front of his boss, “Auditor knows nothing” and when with auditor, “boss is the Devil”
- Purposely shares incomplete information with you
How to Spot a cunning auditee :
- Without asking, he would be sharing critical issues in other’s process
- The one who tries to become extra friendly and gossips bad thing about his boss on a repeated basis
- Always tries to communicate with you verbally, even if you had asked for information on mail.
- Difference in his words and opinion when in private vis a vis in front of the forum
His only motive is to come as a winner in front of everyone at the end of the audit. So beware of such persons or else you have to pay price.
Thank You !!
Also Read : The Internal audit Story : S01E01 – The Smart Auditee
by Admin ji
The Audit Diaries : S01E02 – The Friendly Auditee
April 24, 2021 in Internal Audit
After positive response on Ep 01, here is another episode of our Audit diaries Season 01 – Managing Auditee. This episode is about friendly auditee, so, do read till the end and share your feedback as well.
Season 1 – Managing Auditee
Ep 02 – The Friendy Auditee
Meet the “Friendly auditee”.
They are found in every organisation, the one who is very sweet, lively and good to you from the very first day of the audit engagement. The one who tries to become your friend, the one who takes you for the “chai- sutta” breaks, the one who seems to take care of you, the one who strikes a personal connect with you by sharing some personal stories etc.
Having said that, it is not necessary that the person is doing this intentionally or has a plan behind it (that differs from person to person and also depends on the situation). Our friendly auditee might genuinely be a nice guy. but, having said that, having a personal connect with a particular person might attract bias towards him (again, knowingly or unknowingly- this is a human tendency after all) and impact your work. You might just want to ignore some petty gaps in his process, devote more time to find gaps in other processes where he is not involved and make it favourable for him.
This is what you should be alert about, the personal relationship should never impact the quality of work. The focus should never deviate from quality of work.
Conclusion: A true professional knows how to keep personal relationships and professional ethics both intact.
Also Read :- S01 E01 : The Smart Auditee
by Admin ji
The Audit Diaries S01 E01: The Smart Auditee
April 24, 2021 in Internal Audit
In this series I will share my experience in Internal audit field in an interesting way. The way one find interesting to read. Hope you all like it. I will continue to post such stuff in future as well. This series is based on my real experience in the field of Internal Audit.
Season #1 – Managing Auditee
Episode #1 – The Smart Auditee
You are new to audit field and with all the skills you have, you put up some brilliant observations with auditee. A few of them to be classified as “damn good ones” as per you. At first, auditee is amazed and appreciates your effort. The next day, he appreciates the quality of your findings ( It may be said that he was pretending to have no answers to them whatsoever). Result- You are at the top of your confidence ( to mean overconfidence here) and your approach becomes casual, having set in mind that you already have a few good points to highlight in your report.
𝑪𝒍𝒊𝒎𝒂𝒙: 1-2 days before closure meeting (or when you pressurise him for written action plan..) auditee shares the detailed reasoning and explanations for your observations. Which nullifies points you made, leaving you with nothing but helplessness and a bunch of curses for him (and some for yourself too). You end up being outplayed by him and have nothing to report (not even in a position to tell the truth).
𝗟𝗲𝗮𝗿𝗻𝗶𝗻𝗴 : Never underestimate the auditee and never become overconfident even after getting good amount of observations. Cover whole process because your work is not limited to finding a few observations, but to give assurance on the process itself.
Do comment your views below and suggest whether should I continue to post such stuff 🙂
Also share if you like it 🙂
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