Auditors Talk Tech, Educating Management and Diversity
The Internal Auditors’ Peer Group began its 2018 calendar with a lengthy opening session to kick off its meeting at Uber in Palo Alto, California.
Members and guests discussed a wide range of topics, including a look at technology to address various challenges, including SOX controls and audit hours. Participants exchanged ideas on educating management in what they actually do (and how business units shouldn’t be afraid of IA); they also talked about the challenges of diversity in internal audit and finding qualified candidates.
Talking technology. Members discussed the various systems they have used and, in many cases, the failings of each. Protiviti got high marks for control rationalization but got less than stellar ratings for documentation. Others mentioned Workiva as good for reporting. One system that most agree does a good job with SOX is SoxHub from a company called AuditBoard. Read more on SOX and Protiviti here.
• Takeaway: Find what works for you. Finding the right system for your department always comes down to what your department needs vs. what the industry says or peers say you need (or what they use). Unfortunately, trial and error (and the expense thereof) is still the norm. Nonetheless, based on member input, SoxHub sounds like an effective tool.
Educating management. Despite the growing importance of IA’s role, what the function does is in many companies still is misunderstood. There are other audit-like functions or ones that get confused with audit. IA may also be perceived as being brought in because of a problem. “People still aren’t used to audit,” said one member. “Some ask, ‘why audit? What did I do wrong?”
But now the function is gaining wider acceptance as audit’s skills – for example in data analytics – become more widely known. Through data analysis, IA can offer insights as to what’s going on in the company in tangible ways. Some members report being called upon to do non-audit reviews. They’re also being tasked with helping build enterprise risk management functions (although the goal here is not to be seen as the owner of ERM). All of this is leading to some audit departments being able to add headcount.
• Takeaway: Proselytize. It doesn’t hurt to market yourself to let management know what you do and what you are capable of doing—in non-audit ways, as in data analytics and mining. Several members of the group have done work for business units with the understanding that it is not an audit and won’t be an audit unless something egregious is discovered. Communication is best, and letting internal “clients” know how you can help the business, and in some cases strategy, can do wonders for budgets and headcount.
Diversity. Like the rest of the world, internal audit departments are trying to figure out the best path to creating a diverse environment. As members discussed, it’s a very complicated issue, involving not only race and gender but just as importantly, age. All the challenges can run up against one another as managers try to solve one or the other.
A challenge many IAs face is recruitment. One member suggested the idea of word-of-mouth recruitment vs. just sending out a job description to a website (which, while generating lots of resumes, rarely produces the right candidate). IA “has to be proactive about recruiting,” said the member. “Ask colleagues who they know vs. just going on fishing expeditions.”
• Takeaway: Seek and you shall find. There is a lot of competition out there for creating a diverse department. Instead of just posting job descriptions, IAs must be more proactive in recruitment. They also have to be sensitive to each part of the diversity strategy and how tweaking one part may create problems with another.
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