Five Signals That Your Last Internal Audit Hit a Home Run

Richard Chambers, CIA, CGAP, CCSA, CRMA,shares his personal reflections and insights on the internal audit profession. 

I think internal auditing can be one of the most rewarding jobs on the planet. But let’s face it — no matter how good you are at your job, it’s not likely that people drop by your office each day just to tell you how much they loved your last audit. Still, there are unmistakable signs that your last audit was a big success. Here are a few of my favorite indicators that an internal audit report hit a home run.

  1. Your audit committee specifically asks for you to brief the members on your last audit.
    At most organizations, the chief audit executive regularly attends audit committee meetings, but other auditors are less likely to attend the meetings. If you normally are not invited to attend committee meetings and the audit committee wants to hear from you — congratulations! Most likely, your audit had important repercussions, and your efforts are being noticed. In that case, internal audit has hit a home run. (Unless, of course, the audit committee called you in only because the members wanted to criticize your audit — in which case, unfortunately, the name for your situation probably is a “strikeout.”)
     
  2. The CEO or CFO sees you in the hallway and stops you to talk about the audit.
    When people stop what they are doing just to talk about the results of a recent audit, chances are good that you are making a difference in your organization. Any special recognition of an audit, even during an impromptu meeting, is an indicator that people have been thinking about your report and its consequences. I look at this as a strong indication that internal audit is functioning as an agent for positive change.
     
  3. Your audit recommendations result in significant cost savings, enhanced revenues, or major efficiencies.
    Everybody loves money! If your internal audit report resulted in a significantly more profitable organization, I’m sure you already know that your audit hit a home run. These are results that any auditor could be proud of. Internal auditors know that money is not the only thing that matters — but it never hurts.
     
  4. Your internal audit reveals a major unrecognized risk or ferrets out a major fraud.
    When an internal audit unearths a serious problem or stops a major problem from occurring, you know you have made a difference. Addressing a serious risk might not enhance revenues, but on occasion, an internal audit recommendation can even save a life — and an internal audit that does this is an automatic home run in any book.
      
  5. Operating management seeks out your advice on related or additional issues surfaced in a recent audit report.
    If you get a call back from operating management asking for additional advice, you can assume your audit was a success. When operating management seeks out your opinions about its operations, it’s likely that your audit hit a home run. But it doesn’t count if someone calls you merely to ask for advice on how to word a response to an audit recommendation.
These aren’t the only indicators that internal audit has hit a home run — in fact, the strongest indicators that an internal audit was successful are often unique to the circumstances of the particular engagement. Of course, if a single audit resulted in all of the outcomes above, chances are that it wasn’t just a home run. It was a “grand slam”!
 
I would love to hear from you. Do you have real-life examples of a moment when you realized your last internal audit was a success? Let’s share the experience!

 

Posted on Nov 17, 2011 by Richard Chambers

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  1. Good material. really likes it.

    Cheers....

  1. Great article! All of the signals are great experiences, and indicate that we are doing our job properly. I have never really thought of those situations as signals of a home run, but I agree they are. And I am happy to have experienced them. One could probably think of a few more signals, but at the moment I can recollect one additional situation. -Being offered the position of CFO after conducting an internal audit of the financial department. Regards,
  1.  This is a great article.  I have one more to add.

    6.  An area requests a review (i.e. audit or consultative) shortly after audit completion.

    On the surface, this may sound strange, but it has happened to us twice recently.  To give an example, we performed an audit of area with significant cash and electronic transactions.  We noted several control concerns surrounding the treatment of cash/cash equivalents.  Other areas heard about the engagement and at a minimum wanted us to review their controls surrounding cash/cash equivalents.

    In another instance, we noted several control concerns in a client’s application system.  The application administration is somewhat decentralized and the client appreciated our input.  Shortly after the engagement, another client called specifically requesting an application audit.

  1. Richard, Thank you for a great topic. I think you've hit the major indicators in your article. I would like to expand the scope, and offer a few additional indicators of a longer term success rate. These would include the Audit Committee requesting to meet your team when they visit the Company location and receiving specific requests from clients and / or the audit committee for special assignments. In my last role as CAE, I was asked to review a major footprint's entire distribution operations, measure their compliance with regulations and actually create desk procedures to be used to train the existing operational staff. I would call this being requested to move to a consultative role and actually correct operational deficiencies. You will recognize the feeling when your department has achieved this success factor. You noticeably become a serious partner with the executive management team. Have a great day!
  1. Thank you for a great article on a topic that is of a great concern. Other experiences would be when a project is put on hold in order for management to address audit issues which would otherwise affect viability or like Robert has indicated above, management calls you to review an area that is not  in your plan because they appreciate recommendations in a previous audit report.. I have had experiences where an auditor has received a commendation letter for a good report, not from the auditee, but from senior management complete with undertaking to ensure full implementation of recommendations. Have a blessed day!

  1. Thank you. Your article is great.

  1. Thank you for this wonderful article. I cant agree more with the points above. In the recent past senior management have requested for more audits(in frequency) coming out of the success of the previous audits. Discovering a fraud is a major home run in the audit shop. A CEO calling to discuss control issues raised by an audit discovery is a major plus.  Also when a new CAE undertakes a thorough scope of universe and ensures audits are done on areas never audited before and unearths real issues that auditees and audit committee hear for the first time makes for a grand slam! Lets hit it hard men!

     

  1. Great Article

    IT is very motivating.

     

  1. Good articles - home run indicators for me are unsolicited requests for additional audits and/or requests to speak at management forums on the risks identified in particular audits

  1. Excellent article Richard.  I've certainly had experiences related to a few of the 5 points listed.  I've helped implement corrective actions, have offered writes-ups and certain analytics requested by the business (where appropriate) and have been commended by management for identifying internal control improvements and alike.  However, it must be said, at least based on my own experiences, that management does not always look favorably on internal audit "home runs".  They can sometimes incite an opposite reaction. 

    But this is the exception on not the norm.

    Kind regards,

    Mike

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