​How Can Business Acumen Help Internal Audit?

Internal Auditor’s latest winning scholarship essay discusses the key areas of business acumen today’s practitioners should possess.

Comments Views

​Internal audit is all about enabling business performance. To best play this support role, successful audit functions must be able to speak to the language of the business. This means that internal auditors must provide “effective and relevant audits,” as Arthur Piper states in the October 2017 issue of Internal Auditor. To achieve such a standard, one must begin by demonstrating several key levers of sound business acumen.

Making the Connection

Having strong business acumen means understanding critical business principles and practices relevant to key stakeholders. It requires an auditor to quickly grasp the inner workings of a business and generate recommendations for challenges facing the organization. This task is no easy feat and one that requires versatility by an auditor. Such importance is recognized by senior internal audit leadership. In The IIA’s 2014 Pulse of the Profession Global Report, the chief audit executive survey results indicated that the most sought out skill of internal auditors was business acumen (36 percent, McDonald, 2015).

In essence, having strong business acumen helps auditors provide sound judgement, enact quick-decision making, and helps to provide meaningful recommendations (Piper, 2017). Also, in applying these skills it allows internal auditors to understand the mechanics of the organization and to build creditability.

Crossing Organizational Boundaries

Another way internal audit can make the connection is by partnering with business leaders. I periodically conduct educational awareness presentations to share insightful internal control concepts with various business units. This type of interaction encourages two-way dialogue and demonstrates creative and opportunistic ways of thinking to add value. It also allows for better knowledge sharing and understanding of organizational objectives and challenges. In addition, proactive internal audit engagement can help remove functional silos that often exist and gives way to effective teaming when stakeholders are able to provide input into the process.

Firsthand Experience

At my previous employer, I worked in procurement and finance before joining internal audit. It provided me valuable experience because I was designated as a “subject matter expert.” In performing related audits, I could understand the challenges being faced by my clients. Having sound business acumen allowed me to provide meaningful recommendations. In areas that I did not possess subject matter expertise, I emphasized having insightful dialogue with project stakeholders. It was in this approach that I learned “you cannot be an effective internal auditor and business partner unless you understand the nature of the business.”

Business Acumen Is Good Business for Internal Audit

Leveraging strong business acumen in conjunction with audit knowledge is a powerful combination. Demonstrating this knowledge gives opportunity to leadership and creates additional value for project stakeholders. At the end of the day, an audit without adding value is not an effective audit. Whether drawn from previous experience or through information gathering, leveraging business acumen will improve internal audit execution and thus provide measurable returns for the business.

References

Piper, A. (2017, November 8). Digging for knowledge. Internal Auditor, 51-55. Retrieved November 5, 2017, from https://iaonline.theiia.org/2017/Pages/Digging-for-Knowledge.aspx
McDonald, P. (2015, January 9). The pursuit of business acumen. Internal Auditor. Retrieved November 5, 2017, from https://iaonline.theiia.org/the-pursuit-of-business-acumen

Bria​n Salvador, CPA, CISA, is senior internal auditor at Intellectual Ventures Management LLC in Bellevue, Wash.

Internal Auditor is pleased to provide you an opportunity to share your thoughts about the articles posted on this site. Some comments may be reprinted elsewhere, online or offline. We encourage lively, open discussion and only ask that you refrain from personal comments and remarks that are off topic. Internal Auditor reserves the right to remove comments.

Comment on this article

comments powered by Disqus
  • IIA Sawyer PreOrder Web-Jan 2019 IAO_Prem 1
  • IIA COSO_Jan 2019 IAO_Prem 2
  • IIA Membership_BOY_Jan 2019 IAO_Prem 3