Saturday, July 27, 2013

Should the CAE Educate the Audit Committee?

Do not expect  all the audit committee members to possess sufficient accounting ,audit and risk management knowledge and experience . In a perfect world it would be great if they do ! As we don't live in such a world ,someone should take the initiative to educate them ,and I believe that this " someone " should be the CAE !

During the brief period when I established and managed an internal audit activity for a multi - billion dollar company ,I took it upon myself to keep open communication lines with management in general and the audit committee in particular in order to keep them abreast of developments in areas relevant to their responsibilities .In the case of the audit committee ,I used to share with them news,articles and publications relating to accounting,audit ,risk management ,corporate governance and other areas of interests . And to make things more interesting ,I used to send them a monthly quiz ! I was pleasantly surprised with the positive reaction of the committee members and their desire to receive more information and quizzes ! In fact ,they were competing to score higher points each time I send a new quiz .

I am fully aware that not all audit committee members will act in the same way, but the CAE should at least try and fulfil this educational role . It not only benefits the audit committee members and the organization ,but helps to strengthen the CAE's relationship with the audit committee.


Difficult Audit Customer : No Problem !

During my long career in external and internal audit ,I have always managed to handle all types of audit customers: the easy going ones and the difficult ! My experience covers many countries and many cultures .My secret is very simple , I follow these steps:

1. Know the person :

Before starting and audit assignment ,invest some time to learn about the key person you will be dealing with .Know about his/her educational background , career history ,family status, interests  ..etc.

2. Find a common interest :

There must be something in common  to talk about between you and the person you will be dealing with .It could be family values, sports ,travel  or any other areas of interest .Use this as a door opener .I encourage you to spend few minutes talking about it when you first meet with him/her . Word of caution : never discuss politics or religion and if the subject is raised be neutral !
 People are different and each one needs a personalized approach .

3. Explain why you are performing the Audit :

Always explain the objectives of the audit in advance and what you expect to achieve . You have to send a clear message that you are doing what you are hired to do and that in the process you wish that it will be a mutually beneficial and enjoyable experience !

4. Be Professional & Patient :

No matter how difficult the audit customer is ,always behave in a professional manner and be patient .Your professionalism will pave the way towards a healthy relationship across the organisation .

And finally ,I am a strong believer of the saying: If there is a will ,there is a way .

My 4 P's for work :


Please share your experience !


Monday, July 22, 2013

Why Internal Auditors keep telling us that they add value?

Why is it that internal auditors are the most users of the terminology "add value" ? Do you hear other functions in your company use it as often ? Do internal auditors use it to justify their existence to others and/or to convince themselves that they are valuable to their organizations ? And finally do they really add value and how?

The glossary section of the IIA standards defines add value as follows :
"The internal audit activity adds value to the organization ( and its stakeholders) when it provides objective and relevant assurance and contributes to the effectiveness and efficiency of governance,risk management, and control processes." Isn't this what they are supposed to do anyway? Is adding value means doing your job as prescribed by your job description or does it go above and beyond what is expected of you ?

Can you in your own words describe how you add value to your organization using at least one practical example ?

Do you know what is your stakeholders definition of "adding value" ? Did you ever asked them?

I am not trying to offer answers here ,but rather to start a self-dialogue !!

Are you getting the most from the ethics mandatory hours?

 Like many of you at this time of year, I have been looking to take the mandatory two hours of ethics training to comply with the IIA cpe  r...