The first thing that needs to be in place to ensure competent internal auditors is effective human resource policies and practices. Here we are concerned with the attributes of successful internal auditors. A formal Practice Advisory deals with proficiency and requires that each internal auditor should possess certain knowledge, skills, and other competencies:
- Proficiencies in applying internal auditing standards and procedures
- Proficiency in accounting principles and techniques
- An understanding of management principles
- Appreciation of accounting, economics, commercial law, taxation, finance, quantitative methods and IT.
- Skilled at dealing with people and communicating
- Skilled in oral and written communications
The organization of the future will be a conveyor of ideas with the sourcing of products and services a secondary issue. The customer says what they want, and the organization delivers. Meanwhile the organization also helps the customer raise their sights in envisioning what is available. In this way, the organization of the future is a collection of visions and intellects brought together by a dynamic information and communications network. The importance of getting the right competencies in staff has never been more crucial to business success, and internal auditing is no exception.
Some of the attributes that the competent internal auditor needs to demonstrate include the following (in no particular order):
- Ability to apply innovative and creative thinking.
- Ability to work to agreed timescales and account for time.
- Able to add value to the organization.
- Able to appreciate concerns of stakeholders and focus on needs of the customer.
- Able to appreciate new ideas and embrace and encourage change.
- Able to establish credibility with senior management and at grassroots.
- Able to function within flexible working arrangements.
- Able to plan work and have a sense of urgency in performing the audits.
- Able to quickly build relationships but retain professional stance.
- Able to work under pressure and set priorities.
- Ambitious and confident without being overbearing.
- Appreciation of business environment and new ventures.
- Appreciative enquiry—looking for the positive in human undertakings based on the great energies that come from success and accomplishments.
- Balance and common sense with an overall sense of fairness and diplomacy.
- Basic technical skill—financial, legal, economics, accounting, auditing, computing, statistics, other analytical techniques, database and spreadsheet use, data interrogations and so on.
- Can cope with travel requirements and overnight stays.
- Commercial awareness.
- Committed to continuous learning and open to training and development.
- Committed to working within set corporate policies and section procedures.
- Communications skills, oral, public speaking, writing, report writing, effective listening, written and interpersonal skills at all levels.
- Diplomatic but persistent where required.
- Emotional intelligence and good balance of emotions such as anger, sadness, fear, enjoyment, love, surprise, disgust, shame—and humility. The ability to apply social skills such as trustworthiness, empathy, adaptability.
- Enthusiastic, task-oriented person, able to focus on the job in hand.
- Facilitation skills with an emphasis on challenge and co-ordination.
- Formal report writing.
- General management skills and able to provide direction, delegate and monitor results through performance review.
- Global perspective and interest in international developments.
- Good balance of consulting and assurance approaches and able to reconcile possible conflicts between helping people and reviewing systems.
- Good decision making and judgment with no special bias to self-interests.
- Good interviewing technique and able to empathize with the client.
Good problem solver and able to weigh up pros and cons of different options and to see around the problem through to solutions.
- Intellectual capacity and able to see things for what they are and ascertain causal relationships between problem, cause and effect.
- Interpersonal skills recognizing group dynamics and people behavior.
- Leadership and drive with a clear sense of direction.
- Mature and professional enough to deal with different types of people and operate across different cultures.
- Negotiation skills and some tenacity in sticking to crucial points.
- Objectivity and independence with an ability to remain impartial.
- Practical edge in applying policy and an understanding of any limitations.
- Presentation skills.
- Project management skills.
- Self-motivated with good initiative, and enthusiastic even when performing mundane tasks.
- Some commitment to developing a career in internal audit.
- Task-focused and good at applying energies to delivering results.
- Team player—able to buy into team working and team tasks with an understanding of the importance of being friendly, participative and helpful, and having fun where possible.
- Track record of achievement and completion of tasks.
- Understanding of internal audit procedures and quality requirements.
- Understanding of modern audit techniques including corporate governance, risk management and control.
- Understands big picture but can respond to detail when required, notwithstanding apparent ambiguity.
The new look creates a very demanding role. It includes all those aspects that make a good traditional auditor with a hard nose and deep concern with getting to the truth, and the new approach of being a top-flight consultant on risk and control issues.
Audit Training and Development
Training is an important aspect of developing internal auditors, and has to be carefully planned in line with a career developmental program. A professional level builds on and extends the subjects that are covered at practitioner stage. As well as internal auditing topics, there is coverage of financial and general management, information systems and a new module dedicated to the topic of corporate governance and risk management. The advanced internal auditing paper is based around a case study that is available before the examination date, so reflecting the growing trend towards more practical work.
There is an entire spectrum of developing people at work that includes:
- Training—program for getting people to learn to do things differently.
- Development—untaught activity to increase/improve performance.
- Education—formal courses to develop knowledge and qualifications.
- Learning—acquiring better skills, knowledge and attitudes.
There are various ways that audit staff may be trained and developed:
- Specialist skills training via internal or external skills workshops – These can be extremely efficient in terms of auditor development.
- Professional training – This may be based on passing examinations of a defined professional body such as the Institute of Internal Auditors, which is a completely different form of training from skills-based courses.
- The training coordinator – Appointing a training co-ordinator is a positive way of promoting various training program, particularly where the co-ordinator can undertake some of the actual training.
- Directed reading – This is one way of encouraging auditors to research aspects of internal audit. The department should subscribe to all relevant journals and publications.
- Training through work – Programmed audits enable audit management to ensure auditors are rotated and exposed to a variety of audits and experiences. It is possible to designate smaller audits as ‘training audits’ where they form part of the auditors’ personal development program.
- The audit review – The audit review process enables audit managers and team leaders to direct the work of junior staff and also provides experience in staff management.
- Professional affiliations – These can be part of continuing professional development (CPD) and stimulate group discussions.
- The audit manual – This sets out the defined methods and procedures required to discharge the audit mission.
Training is part of the managerial process and as such forms only one constituent of the overall system of human resource management. It cannot be seen in isolation from the other techniques for developing audit staff. Not all auditors remain in the audit shop for long periods of time. This ‘short-stay syndrome’ results because organizations view internal audit as an ideal place to train managers. There are many who do not view internal audit as a career in its own right and, for example, trainee accountants may wish to return to main line accountancy after a spell in audit.
This poses a problem in that extensive training is lost on audit staff who will not remain with the department for long. All staff should be developed and those who may wish eventually to leave auditing will simply be replaced by other auditors. Vacancies create scope for internal promotions for auditors who excel via their development programmes. The only concern is that short-stay staff should not be placed on professional qualification programs as these last several years and require a major commitment to a career in internal auditing.