March 23, 2014
10 Vital Lessons From the Audit Trail
Over the years, I have sought to use this blog to offer critical imperatives that I believe internal auditors needed to address. Sometimes, these were strategic. Sometimes, they were tactical. Many of the blog posts were drawn from my experiences as an internal auditor and chief audit executive. I recently took the next step and assimilated the lessons I've learned throughout my career into a book. Lessons Learned on the Audit Trail is being released this week by The IIA Research Foundation.
While I draw on my personal and professional experiences for the book, it is the "lessons learned" that I believe will be of most value to the reader. These lessons range from those a young internal auditor should know about managing career expectations to what a chief audit executive needs to understand about attaining and retaining the elusive seat at the table.
There are many key points in the book, but I'd like to single out 10 for those who strive to succeed in the profession. These lessons, and relevant passages from the book, include:
- Outstanding internal auditors share common traits. Be willing to commit yourself to absolute excellence. Don't settle for simply being good; pursue greatness in everything you do.
- Relationship acumen is essential to success. If you truly expect to contribute meaningfully in an organization, you have to cultivate relationships based on genuineness of character so that others are confident that you are truly trying to help them – not just yourself.
- Without stakeholders, we have no mission. Your key stakeholders have the last word on whether you are doing your job well. And they judge an internal audit function not by how well run it is, but by the value it generates for them.
- When in doubt, follow the risk, but remember that it is a moving target. Establish risk-based criteria for prioritizing your audit coverage. Without that, you won't know where to start.
- Communication is vital and must be continuous. Effective internal auditors must do more than develop important information and insights. They must communicate that information and those insights effectively and continuously.
- Timeliness must be a critical part of our value proposition. Our stakeholders live in the "Google era," with instant answers available to almost any question with a few keystrokes. They no longer consider two months, or even two weeks, very timely. This has created an expectation gap that is not often discussed in internal auditing.
- Innovation drives greatness. As internal auditors, we cannot be so paralyzed by fear of failure that we are unwilling to innovate.
- Small stones can cause the biggest waves. Occasionally, the facts we communicate in our reports draw attention or spark the imagination in ways we did not anticipate. ... I call this phenomenon the "small stone effect," when something with the financial significance of a rounding error starts out as a ripple ... but grows into a tsunami of overreaction or negative publicity as it spreads outward.
- No one is immune from ethical lapses. Recognize the risk that unethical behavior poses to the internal audit profession, and work hard to present the kind of activities that discredit us individually and the profession at large.
- Internal audit needs a seat at the table. The process of earning a seat at the table begins long before you can pull up your chair. It starts with you building a trusting relationship with the organization's board and management.
I recognize that some of these lessons might sound like some of my former blog posts. That is because many of those posts were an inspiration for the book as I delved extensively into critical issues facing the profession.
I welcome your thoughts and encourage you to share lessons you have learned on the audit trail. For a copy of Lessons Learned on the Audit Trail, visit The IIA Research Foundation's Bookstore. The book is available in hard copy or as an eBook, with all proceeds going to the Research Foundation.