Who Audits the Auditors? Is Internal Audit a fact-finding Investigation?
NOT so according to the strategic leads and advisors to the Institute of Internal Auditors (IIA) who take the view that ‘rarely is an audit an investigation’ and that ‘internal audit works in partnership with the business to evaluate the adequacy of risk and controls and make recommendations to management’.
So lets take a look at the origins of the word:
The Latin word vestigium meant “footprint, track.” Joined with the prefix in-, the noun vestigium gave rise to the verb investigare. This word meant both “to track or trace by footprints” and “to study or examine closely.” Only the second meaning was kept when the verb was borrowed into English as investigate.
- a searching inquiry for ascertaining facts; detailed or careful examination (Dictionary.com)
- the act or process of investigating; a careful search or examination in order to discover facts, etc (Collins)
- an investigation is a fact-finding exercise to collect all the relevant information on a matter (ACAS)
In contrast to the IIA, we take view that an internal audit is very much an ‘investigative’ process, one that starts with fieldwork to carefully study issues and examine facts, a fact-finding exercise to ‘collect all the relevant information on a matter’. Proceeding to the less technical, but essential phase, the audit meeting, at which additional facts are determined and opportunity for comment, discussion, and observation are facilitated, frequently exposing hidden risk and danger not thus far identified, and feeding into the audit findings report that informs the decision-makers, ‘working in partnership with the business to evaluate the adequacy of risk and controls and make recommendations to management’ (where’ve you seen that before?).
This post is specifically prompted by the recent news about the enquiry in to KPMGs internal audit of Rolls Royce, see http://www.bbc.co.uk/news/business-39801990
We are firmly of the view that effective workplace investigations and audit meetings (interviews) that are professionally conducted and quality assured realise and secure clear strategic business benefit and outcomes for your organisation.
- Direct and inform organisational Governance, Regulation, and Compliance (GRC)
- Protect your brand and reputation
- Underpin your company values
- Provide internal reassurance, consistency, and confidence
- Preserve stakeholder loyalty, improving performance
- Identify, reduce, and manage risks
- Increase revenue and reduce costs
- Increase public confidence
- Energise, motivate, and empower staff
- Support industry standard leadership
- Reassure the regulators and avoid sanctions
Conversely, failure to quality assure and professionally undertake those investigations and meetings (interviews), can attract adverse consequence for your organisation, causing:
- Loss of critical information and exposure to risk
- Irreparable brand, institutional, and personal damage
- Stakeholder disengagement
- Increased expenditure on unnecessary meetings and interviews
- Poor value and return on investment
- Reinforcement of poor practice
- Inefficient resource deployment
- Lack of internal and external credibility and confidence
- Failure to adhere to regulation
- Regulatory or criminal sanction
And could ultimately lead to
Fact-finding workplace meetings ARE investigative interviews they are a search for the truth and checkable facts to best inform decision-makers. They are the ‘shop window’ for integrity and ethically robust workplace investigation.
Three global banks most definitely see audit as a robust information and fact-finding exercise, that’s why they’ve commissioned us to work with their internal audit teams to support them as they develop robust systems that properly and professionally challenge the business to ensure that risk and reputation are better managed. What is they say about the Coca Cola brand? Over half it’s value lies in the brand? United Airlines? Rolls Royce? How much was wiped off their values as a result of brand and reputational damage?
We can help!
Global Bank – A Case Study
Three imperatives for training combined for a global bank to secure the continuing services of Intersol to provide investigation and investigative interview (meeting) skills training for their globally ‘hubbed’ internal audit team. Those requirements were to:
- demonstrate to regulators that they were strengthening the internal audit function and that the function served as an effective control
- implement globally consistent methodology and standards of professional practice
- support a new competency framework defined specifically for the global internal audit function that meant they needed to implement training that would support internal auditors to develop and enhance those competencies
For the first time, they were seeking non-‐technical training designed specifically for internal auditors, training and development that was recognised as a particular need to help them shape the perception of the global function as a value-adding partner to the business. Intersol customised a 2-day ‘Effective Audit Conversations’ course that is being rolled-out to over 900 of that clients audit delegates worldwide. Intersol were chosen because of their:
- ability to demonstrate customisation, proportionality, context, and applicability to the audit function
- internationally recognised, award winning subject matter experts from audit, psychology, and investigation designing and delivering the training
- global reach
- experiential learning methods and applicability of the ‘tools’ from the course
- alignment of course content with the IIA competency and the IIA International Professional Practices Frameworks
In addition to achieving the 3 imperatives above, additional business outcomes included a continuing reduction in costs, risk, and improved brand reputation.
Feedback from delegates worldwide has been consistently excellent and contributed to the launch of the first accredited vocational qualification for auditors
“I wish I’d had this training and skill years ago when I started out in audit, it’s absolutely essential and should be part of the on-boarding process”
Contact firstname.lastname@example.org for more information about this and similar GRC projects.That’s why we have launched the first global vocational qualification to accredit auditors to conduct workplace fact-finding meetings, an investigative interview by any other name.
If you’re reading this and would like to become a global lead, set yourself apart from the competition, and be supported by the very best at what they do please contact us at email@example.com