Redefining Role of Internal Auditor – Building Trust, Enhancing Value & Growth Enabler
Gone are the days where Internal Audit was treated as part of routine audit; where checking & ticking of vouchers were done extensively. In the current scenario Role of Internal Auditor (IA) is completely changed. It changed in a sense:-
- IA is no longer a fault founder; it acts as a value driver for the organization.
- Internal Audit no longer would be a just internal department or for name sake rather than an independent in providing value added service.
- IA is nowadays involved & be a part of all processes.
- Promoters, Investors, stakeholders see IA as an Independent professional who would contribute to the progress of the company by sharing his or her wisdom.
However, effectiveness of any Internal Audit completely depends on how much an IA is proactive and how much Auditee team is participative? It means, effective Internal Audit is a sum of proactive IA plus participative auditee team.
Main obstacle & or constraint in doing effective internal audit is lack of positive participation from auditee team & heads of team. Therefore, IA first needs to win the trust of the auditee team. As these are the people whom IA needs to interact from time to time to get the insight of any company.
Following should be taken care of by IA :-
- Auditee team should not look IA as fault finder
- Auditee team should not look IA as only complainer to their heads
- Auditee team should not feel that IA showing them as inferior in front of their heads while providing any suggestions or value additions.
- Auditee team should feel that they are getting good value additions & IA is playing an enabler role for them & for the company.
Now we would see a structured approach towards Internal Audit plan:-
Auditee walk through:-
Auditee walk through means before starting any Internal Audit, IA must first understand his auditee & its business & all the core processes. IA must do:-
- Desk review
- Physical visit to the site, plant
- Analyze various reports
- Held discussion with Auditee & note down their expectations & understand their perspective
Preparing & communicating Internal Audit plan:-
Results of the walk through should be documented & used in preparing the Internal Audit plan. Factors that need to be considered in preparation of Audit plan are:-
- Scope of Audit
- Team executing Audit plan & their experience
- Time line to complete the task
Preparation of the Internal Audit plan is only one part of the Internal Audit. Its success & effectiveness completely depend upon how well it is communicated to the Audit team & Auditee team along with its execution. Therefore, effective communication of the Audit plan plays a very pioneer role in the success of any Internal Audit.
Flexibility of Audit plan:-
Internal Audit plan should not be static; but should be flexible enough to cover any updates & changes that may occur at the time of actual execution.
Let’s touch upon skills sets require by IA & its team:-
- Technically sound would be added advantage now a days
- Communication of observations & finding to the Auditee is a skill plus art
- Audit report should be to the point
- Use bullet points instead of long para in the report
IA should keep one thing in mind that their report is a final product which they are producing in front of promoters, investors and or stakeholders. In redefining their role, IA are not only upholding accountability but also unlocking potential. Their insights empower leadership, their independence assures stakeholders, and their presence ensures that growth is not just achieved, but sustained.
Hope this write-up serves you!
Be Blissful!
*****
You can reach to me at rohanrp1983@gmail.com
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