leading a modern internal audit service: new challenges need new ideas


By Tim Crowley (CPFA), Chairman of CIPFA’s Audit Panel 

Under siege and undervalued - a common complaint of leaders of internal audit services across the public sector. But leaders need to think and act differently when their operating environment is radically changed. And internal audit needs strong leadership to ensure the profession remains relevant and valued.

But how do we decide what to stop doing? And, more importantly, come up with ideas that help us do things better and differently?

Here are five to get started:

1.    Benchmarking

More than ever, organisations want to understand what best practice looks like - and they want their internal auditors to help them. Build benchmarking into your planning, conduct and reporting of audits. It doesn’t have to be complicated. Instead of just recommending that policies and procedures are updated, why not provide examples from elsewhere? Surveying organisations on key issues also generates valuable results. Create benchmarking networks with colleagues and make sure they deliver.

2.    Develop partnerships

In-house teams often feel that they cannot compete with the range of specialisms delivered by the big professional services firms, but if you think creatively, you can close the gap. Many niche specialist firms are keen to establish a route to market by working with internal audit teams. These specialist skills encompass; Organisational Development consultants that can complement internal audit’s governance work, IT specialists that can undertake penetration testing, and capital specialists. Present under your internal audit banner a seamless alliance of services that your clients can access through you.

3.    Auditing culture

The traditional focus of audit work is on the design and operation of processes. But it is people that can override good controls or make a poor system work well, despite its shortcomings. There is, though, very little audit work that is focused upon culture. Building a methodology to audit culture is possible and will raise the profile of internal audit. Techniques are relatively simple: questionnaires, workshops and structured interviews. Audit Committees will not ignore this type of reporting and will actively encourage you to help them understand culture, as they know this is what really matters.

4.    Inform the debate

A great way to raise your profile is for your team to be seen as thought leaders. But how many internal audit teams would be described in this way? Yet, auditors are well placed to organise briefing sessions, stage events, produce updates on topical issues, and establish Audit Committee Chairs networks. These take time to manage but there is a significant return on investment.

5.    Recruit innovatively

We tend to think of staff resources as being principally our permanent team supplemented by temporary staff. This is a reactive and inflexible model that doesn’t align with the demands being made of a modern internal audit service. Our clients want flexibility, agility, access to specialist advice and they only want to pay for it when they use it. Build a pool of associates. Market them and manage them and make sure you set in place arrangements to satisfy HMRC. Many associates will greatly value being attached to an internal audit team that can offer infrastructure support and source work for them.

The principle of delivering independent assurance built on professional standards remains - but all internal audit leaders need to rethink where and how that assurance is delivered. To carry on doing less of the same things won’t work.

These are just a few ideas, there are many more. They don’t require big investment, and they can bring big returns in terms of adding value and being valued.

Tim Crowley (CPFA), is Chairman of CIPFA’s Audit Panel and Director of MIAA. He was chair of the second day at CIPFA's Audit Conference, 14-15 May, Winchester

Tim Crowley

Tim Crowley

Tim is Director of Mersey Internal Audit Agency a major provider of internal audit and related services to the NHS. Tim is a Vice Chair of CIPFA’s Audit Panel and a member of the International Accounting Standards Board (IASAB).

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