My Ideal Internal Audit Department

How about these as attributes of an ideal internal audit department?

  • A cool place to work.
  • A source of talent.
  • The talk of the office — "How come they have so much fun?"
  • The department people want to transfer to, but hate to leave.
  • The source of projects that are noticed, that will be told to the team’s grandchildren.
  • The internal consultants of choice.
  • Recognized internally and externally as leading-edge, more than world-class.
  • Fully leverages the continuous risk identification, assessment, and monitoring of the organization’s risk management processes (automated processes, by the way).
  • Fully leverages advanced continuous monitoring and auditing capabilities.
  • Praised by the audit committee and top management because they “help them sleep at night.”
  • Expanding into new and cool stuff, even if not traditional audit areas (e.g., process and control improvement — Six Sigma/Lean SWAT teams).
  • Where people are set free to choose an audit approach that stimulates and develops (choosing tools such as control self-assessment workshops, business intelligence dashboards, monitoring of key metrics, and red flag detection), as well as getting to the heart of the problem — tackling the root issues head on.
  • Where the customer says, “There has not been an audit I would not gladly pay for.”
  • Where internal auditing is seen by management as a competitive advantage.

How would you add to this list?

Posted on Mar 3, 2010 by Norman Marks

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  1. Norman,

    You and I are both old enough to remember that the litmus test of an internal audit department was where they were placed by Management when they were doing in the field fieldwork.

    So an attribute of an ideal internal audit department for me always has been one that is sufficiently valued that it undertakes in the field fieldwork in rooms with natural light and not within a 20 metre radius of the rest rooms!

    :)

    Tom

  1. Norman:

    To me, the ideal internal audit department becomes the training ground for the next generation of executive management.  In my opinion, Internal Auditors have the unique opportunity to (1) fully understand all critial tasks in the company (to the level of understanding that those who perform the tasks enjoy) and (2) link those tasks across the enterprise, understanding how the company really executes its mission (or doesn't).  This knowledge, properly assembled and reported, is invaluable to Executive Management and the Board (and, by extension, the shareholders) and creates a sustainable competitive advantage.

    So a good trailing indicator of an internal audit department's effectiveness is how often, and to what levels, its auditors are hired out into leadership positions within the organization.  Conversely, if your internal auditors are leaving the company for external opportunities, you are in trouble.

    Best regards,

    Chris

  1. I'll add a couple:

    1)  Where the clients look forward to you coming back.

    2)  Where someone in the office your visiting for the second time has been telling everyone (excitedly) about your last visit.

    3)  At the exit interview, the manager says (sincerely) thank you.

    4)  The executives announce, "Internal Audit has been of such value - raises and bonuses for all the auditors."

    For what it's worth, I've had all of these happen.  (Well, maybe not that last one.)

  1. I have been thinking of more, also from personal experience:

    • Where internal audit is able to add staff during a period of staff cutbacks
    • Where two different executives at different times tell visiting policitians (a) that internal audit provides a competitive advantage, and (b) internal audit helps his division remain competitive and efficient
    • Where the CAE sends a message to the CEO asking to chat, and the CEO comes to the CAE's office
    • Where staff don't want to go home until late, because they are having too much fun
  1. When the AC chair calls YOU first when he/she has difficulty sleeping.

    At the end of the long day, a key indicator of success is when managers clamor for your staff first to fill openings.

  1. All good ideas - a few other cultural means to the great ends that all of you have discussed.

    The department members make and meet commitments to clients and to each other - or makes it right when they are unable to meet them. Trust is established within the department and with clients.

    The members of the department (and the entire department itself) realistically understand how their clients are reacting to them and can adjust their performance as appropriate. (emotional intelligence).

    Department members act courageously and do what's right, even when unpopular.

    Department members take risks and all the members on the team learn from each others' mistakes.

    Department members support each other and their clients and value the proper goals. 

     

  1. Norm,

    I find it interesting that you mention these things.  Around 17 years ago I interviewed with you for a job as an Audit Manager at your company's Seattle Refinery.  My job had been elminated.  I did not get the job with your company because you thought I was not proactive enough--you thought I could not work on my own. 

    Currenlty I work for a company as a Compliance Manager.  Our company has only been existence a little over two years and is owned by 5 shareholder companies.   I report to our Managing Director as opposed to an Audit Committee of the Board of Directors.  

    Getting back to your question, though, the things you mention are good but you mention nothing about assisting in things like

    • Process Safety Management [something you should be familiar with] and Maintenance reviews.  In other words, things more related to operations and the ultimate success of the company.  
    • Developing an audit profession in a place where there is none [here in Equatorial Guinea].  
    • Looking to change people's values on governance--in a place where people have never heard about internal controls.  

    All the points noted in the Blog are good.  But I believe that the "troops" in my department [two EquatoGuineans sitting to become CIA's and me] get the ultimate rush.   

     

  1. The Ideal Internal Department , to me,  is where the avid leaners sit and fraud is difficult to have acces

  1. Brilliant ideas.........., To me an ideal audit department is one whose support, contribution and impact towards achievement of business objectives will be appreciated by the auditees, executive management and the Board of Directors (incl. Audit Commitee)

    A team that clients refer to as a friend but know that they stand by the values of the profession.

     

     

     

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