It seems as though internal audit is one of those functions where the actions of just one person on the team tend to shape the perception of the full team — especially if those actions are negative. When it comes to internal audit, it is imperative that all team members are able to competently represent the function, as well as the profession. Seen as a group, and held to a high standard of integrity and objectivity, internal auditors must earn the trust and respect of their stakeholders. So, how can we build a great team, where each individual is skilled, professional, and personable, regardless of whether there are only a few members or more than 500?
Great internal audit teams embrace diversity, have the right skills, support team members, and understand that each team member is a leader in the organization. Great team leaders promote training and attainment of the Certified Internal Auditor (CIA), implement a Quality Assurance and Improvement Program (QAIP), and ensure work conforms with the International Standards for the Professional Practice of Internal Auditing.
Working this year as chair of The IIA's North American Board, I will be reminding practitioners of the responsibility to become their professional best to enhance their internal audit teams. This is important, as our members represent and serve not only their organizations, but also the profession.
Diversity Is Key
An important key to building a great team is having diverse team members — diverse in maturity, experience, thought, culture, background, interests, and skills. I have always been able to assemble the most diverse teams. How? Because I always choose the candidates who have the competencies needed to perform in the role, the capacity and interest to want to learn, and a demonstrated ability to work as a team member. Looking for differences among these candidates, rather than similarities, helps build a great team. It is important to provide these criteria and rationale to all who are involved in the hiring process, so all can learn what is truly valued.
What Skills Are Important?
|From Team Player to Team Leader|
When I began my career, I did not know what an internal auditor was. I was offered a position as an internal auditor at JPMorgan Chase & Co. (formerly Chemical Bank) in New York City after graduating from Wagner College in Staten Island, N.Y., with a Bachelor of Science degree in economics/business administration. At that time I had no idea what the work would entail. All I knew was that it was one of two positions offered to recent college graduates that would expose them to many different areas of the bank (the other being credit training), and that it was supposed to be a stepping stone into a position in bank operations.
For me, though, it was the start of my internal audit career. Even then, our CAE, the late Richard Hulbert, was focused on risk. He encouraged us to read the Federal Register each day to understand the rules that would impact the organization and what corresponding changes (policies, procedures, etc.) would need to be implemented. He also encouraged us to read The Wall Street Journal daily, and if something had gone wrong at another institution, he expected us to examine our bank's internal operations to understand what controls (and yes, that was the word we used, even then) would need to be implemented to prevent a similar situation.
I loved the work, the continuous learning, and the focus on all kinds of risks inside and outside of the organization. I was promoted several times, and enjoyed hiring and helping others succeed. I was encouraged to pursue my first certification, the Chartered Bank Auditor, and my first MBA (management and finance), all while I was at the bank — and that's how it began.
I later earned my CIA when I decided I wanted to pursue my earlier interest in health care, and spent some time in internal audit in that industry. I found that leadership and internal audit skills were also transferable to the pharmaceutical and professional services industries.
My internal audit career has taken me around the globe, and I have had the opportunity to visit approximately 30% of the world — with hopefully more travel to come! In my last role, as head of internal audit and compliance for a global consulting firm, I was able to implement an internship program with a local college that continues today. I am a current participant in The IIA's Emerging Leaders Mentoring Program, and I am hopeful that I will have further opportunities to mentor others and introduce them to a career that can be both fun and fulfilling.
One of the most important skills for internal audit professionals, at all levels, is communication. All team members should be skilled in oral and written communication, including interviewing, report writing, and presentation. Team members also should demonstrate the ability to think critically and objectively to identify issues and potential actions to resolve those issues.
Additionally, team members must keep abreast of changes in their organization, industry, and profession. Today's important risk areas include cyber, privacy, anti-bribery, and corruption — but these risks will constantly evolve, and others will emerge. That is why the focus should be on individuals' desire and ability to be continuous learners.
Also, it's important to have team members with skills and interests in different areas. For example, I have always gravitated toward regulatory compliance, and enjoyed monitoring changes in laws and regulations that affected my organization. This may be because I began my career in the financial services sector, which is highly regulated. However, I have worked with other team members who equally enjoyed learning everything they could about IT, accounting proclamations, business processes, contracting, etc. The trick is to harness these diverse interests to build the team, while ensuring all have the right competencies.
The Right Credentials
Obviously, because we are in the internal audit profession, the CIA is the premier certification to demonstrate an understanding of what we represent and how we go about our work. Other certifications and licenses also may be important to demonstrate that the individual has the initiative and drive to continue learning, and to demonstrate his or her skill in a particular area of interest. These include the Certified Fraud Examiner, Certified Information Systems Auditor, Certified Compliance and Ethics Professional, Certified Public Accountant, etc.
Again, those differing and specific interests will add to the effectiveness of the team as a whole. If a team member is not ready to pursue the CIA credential, participating in the annual internal quality assessment can be a great way for the individual to at least learn the Standards.
Speaking of Quality
I am a firm believer that a QAIP, when implemented appropriately, can be a positive factor for both the team and the individual. The QAIP can help ensure that work is being performed in accordance with the Standards. It also can provide support if there are questions about the internal auditors' independence and objectivity.
Internal client surveys highlight how and where the function is adding value, as well as areas of improvement, for either the team as a whole or for an individual. Additionally, having a QAIP in place sends the message to clients that the internal audit function cares about how its work is performed. Also, if an external assessment is performed, we have a good answer when we get the question, "Who audits the auditors?"
Opportunities for Learning
Once team members have been hired, it is imperative that each individual receives training to help develop specific areas of strength and interest. The IIA provides numerous opportunities through conferences, seminars, customized on-site programs, chapter programs, and webinars.
Additionally, individuals should be expected to learn as much as possible from others in the organization. In fact, CAEs may assign individual team members as liaisons to specific departments or functions, particularly where they have an interest. Team members should be encouraged to continuously read and perform external research and share this information with business leaders, resulting in valued professional relationships with key stakeholders.
Team meetings are another valuable source of learning and training for internal audit functions. All team members should be encouraged to speak up and openly share their successes and challenges. Others should share how they have overcome similar challenges. Hot topics or emerging risks can be assigned to individuals who can research them and present their findings during team meetings, thus practicing their presentation skills.
CAEs also can rotate the leadership of team meetings among those who are in the process of developing their management skills. Those individuals should plan the meetings, including developing the agenda and facilitating the discussion among team members. The CAE should train the potential leader to be inclusive and supportive of other team members, so that the right environment will continue in the future.
Training should occur during the execution of each project. CAEs should allow team members, to the extent possible, to pick the projects that they would like to perform. Some team members are anxious to learn about a new area, while others may be content to audit something they may have previously reviewed — because they know they don't currently have the expanded bandwidth. Allowing for and understanding when team members want to grow, or when they need to temporarily scale back, creates an environment where all feel supported. Consequently, that feeling evolves into loyalty, engagement, and productivity.
When It Goes Wrong
Mistakes happen. But, before they do, CAEs should teach their teams how to address mistakes. If team members feel supported, and able to communicate, they will speak up when a report or comment needs to be retracted.
CAEs should be certain team members know that they've taken the right action by acknowledging and communicating the error. They should include them in making the correction, while acknowledging that as the leader, the CAE is ultimately responsible for any mistakes made by the team. The CAE should share the retraction or other resolution to ensure he or she is sending the message that this is the expected action when an error occurs.
Learning From Conflict
Unfortunately, more than once, a team member has come to me upset about treatment received from a "higher-up." My response is to objectively look at the situation as one would an audit observation. First, the auditor should go over the facts. Could he or she possibly have done something incorrectly, or unprofessionally? If the answer is no, further examination of the situation is required. Could the individual exhibiting the bad behavior be under stress that may have caused an inappropriate reaction, especially if the person is acting out of character? In those cases, I advise the team member to allow the situation to cool down and to re-approach the person with my support, if he or she feels capable. I encourage the team member to attempt to resolve the conflict, anticipating that he or she may need to acknowledge what previously occurred, accept responsibility, if warranted, and be proactive in seeking resolution.
If, on the other hand, there is no excuse for the behavior, and the person has a reputation for behaving or responding inappropriately, I will call out the behavior. Together, the team member and I will identify exactly what was inappropriate about the behavior, and we will discuss the best course of action for addressing the situation. In most cases, the root cause of inappropriate behavior is bullying, which I then offer to address for the team member, to ensure he or she feels supported.
Everyone Is a Leader
One of the most important messages for internal audit team members is to know that, regardless of title or position, each team member is a leader. Whether team members are aware or not, their behavior is being observed and assessed by others, and the expectations are high. Internal auditors, more than anyone in the organization, are expected to act professionally and with courage, humility, and integrity at all times. They are expected to be good communicators, analytical problem-solvers, and highly competent, as well as exhibit a passion for the profession.
More Than Ever
Especially in these challenging times, internal auditors must come together as a strong team. Internal audit functions need to assist their organizations as new strategies, objectives, processes, and procedures are developed — putting forth a team of trusted, competent, and valued professionals.