Large and mid-size corporates consider internal audit as an adjuvant enzyme for improving an organization’s risk management, control and governance processes. Internal audits cater certain values to the governing bodies of an organization as an even-handed source of advices and suggestions. Majority of them have a system in particular to ensure that periodical audits are conducted as per company schedules.However, a keen observation is mandatory to conclude how many of them are capable of capitalizing from internal audits.
Scrutinizing through our prior experience in accomplishing internal and statutory audits across various organizations, we came across certain common attributes at the organization as well as auditor levels, which have assisted successful organizations in aiding maximum benefits from their internal audit process.
Let’s figure out those common traits that have endowed few organizations with legions of benefits from their audit process.
Perfect internal audits are born when it has applicable support from the top management and a robust commitment from auditor in protracting entire conscience from the audits. It’s also mandatory for the auditor and auditee to stick to proper deadlines. Besides, it’s inevitable for the performing internal auditor to follow certain traits in order for an organization to maximize its benefits from an audit.
What are those traits to be followed by the performing internal auditor?
Let’s have an inquest on this query.
A performing internal auditor should be trustworthy, possessing enduring confidence about bringing up considerable progress in the organization. He/ She should be able to mould optimistic expectations from the audits, emboldening auditee to come out with suggestions and criticisms that can improve various aspects of the organization and establishing a caring demeanour towards auditee. Most of the successful internal audit professionals have invested gobs of hours building trust throughout the organization. Additionally, the auditor should not be unduly flustered, in cases when audits were to end without a proper cessation. Usually, underperforming or non-performing internal auditors are of calumniator types, who will be imperious, criticizing processes, and rely on exhibiting a superior behaviour during the audit. Such auditors will lead to estrange the tenacity of the auditee.
Extensive ambits of internal audits entreat the need for spotting out the finest way to strategize and organize audits. Most auditors bestow majority of the available audit time in rushing through enumerable reports to pinpoint the arenas of compliance or non-compliance rather than riveting their concentration on to the main audit concerns. An expert internal auditor can assure in the improvement of 80% issues that arises from proper observations and probing while 20% concerns from inspection of documents and records. Excellent internal audit reports can be derived by keeping their priorities up to date.
An efficient internal audit procedure will include communicating with employees of different levels from the primary strategic level to top levels (starting from process operators, technicians, middle managers and finally ending up with top management). Generally, it’s seen that the employees at the very first level or ground level shares why they are not pursuing a process in particular. Auditing the lower level employees in an organization is the best way to raise the self-esteem of such people by making them feel involved in the entire organizational setup, encouraging them to bring enhancements in the organization from their end.
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Skilled internal auditors can also applaud their auditee to improve the working environment by revamping their behaviours and spotting out their issues to the management. In most of the cases, internal audits assist employees to diagnose various concerns that prevail amidst them, before they are audited.
These also assist companies to remit felicitous corrective measures on time. Management has an important role in ensuring that the root cause of the issues is determined and proper improvement actions are scheduled in a timely manner. If this is not done, then audits are not worth carrying out.
Performing an internal audit for acquainting an improved working environment requires prerequisite commitment from the auditor. It’s an act of revelation and motivation. However, strategizing audits for detecting areas of con-compliance is like carrying on a game from a position of weakness.
Most management and Internal auditors might have moved through a quandary of whether to perform audits in all area spending huge span of time or to persuade audits in small area of activities yielding a higher quality audit. This is quite similar of asking a child whether he would prefer his father playing with him every week for two hours of scheduled cricket but not interacting with him during rest of the week or he would prefer his father to spend more time with him without any commitment on playing time, but knowing well that a quality time is spent!! But actually, the fact resides as median; auditor need to spend more time with the auditee resulting in improved quality audits offering more choices of benefits to the management undoubtedly. Cutting corners by reducing time and staff on audit is a sure recipe for disaster and is not a good practice for management to out vie.
Process objectives and metrics clasp of greater importance in internal audits. Auditors should fathom the individual process objectives, verifying if the same have been achieved using the metrics and output to make sure that their audits are worthwhile. Using metrics to validate process objective can lead to cogent audits, sending the fact of beacons that audit is not about reporting non-compliance but to judge whether the planned results are being achieved efficiently.
Internal audits should succor as a value addition tool to bring persistent improvement in the organizational working. It is also relevant that the results of audits are disclosed in timely manner without undue delay and proper correcting remedies are instantly undertaken. To cinch applicable suitability of the system, periodical internal audits are mandatory.
Finally, let’s culminate that, to continuously benefit from internal audit, organization needs to showcase the success achieved through internal audit which would spur both auditors and auditee in perceiving audits seriously and acquainting the maximum benefits in subsequent audits.
