Corporate Investigation 5 Keys to Creating an Internal Audit Process
Before starting an internal audit, professional auditors need to determine what is going to be the best way to execute their inspection. They need to fully understand what the concerns of the company are, how those concerns can best be addressed by the audit, and foresee any potential obstacles or problems that may arise. Not creating an effective internal audit process can all but completely undermine the value of the audit to the company that wants it done.
In their time helping clients and corporations, the internal auditing consultants at Corporate Investigation Consulting have found five keys to creating an internal audit process:
- Listen to the client’s concerns
- Investigate the client’s problems and reasons for the audit
- Provide experienced feedback to draw out underlying worries and risks
- Determine what is needed to alleviate these concerns, as well as what is not
- Create the audit procedure in a way that hits all of the salient points without wandering too far
1. Listen to the Client’s Concerns
One of the most important things that all auditors need to do from the very start is to listen to the client. While most audits end up being similar to one another, the reality is that they are all unique in their own way, albeit often only a small one. Understanding what that small nuance is going to be in the next audit can change its results from merely satisfactory to a huge success.
Gone are the days when most companies would conduct internal audits on a regular basis to make sure they were on the right path or to ensure compliance. Now, many internal audits are the result of a regulator’s warning or a new risk exposure. Auditors need to know what that concern is before creating the process for the upcoming internal audit. The only way for auditors to get that awareness is by including stakeholders in the planning stage and asking pointed questions to reveal their concerns and intentions for the audit.
2. Look Past the Stated Worries for Underlying Risks
Experienced auditors, however, know that what company stakeholders say is their goal for the audit is not always completely accurate. It is not that stakeholders are lying or hiding their intentions, though. While stakeholders may feel like they have a good idea of what is going on and that they understand what the potential threat is to their company, in some cases their concerns are misplaced or are focused on problems that are actually just the tip of the iceberg. They just do not know it.
In crafting an effective internal audit process, experienced auditors – like those at Corporate Investigation Consulting – know to take the stakeholder’s stated concerns with a grain of salt. They know to dig into them and search for the unspoken worries and the risks that are really causing them, but are hidden from the stakeholders’ often relatively inexperienced eyes.
3. Provide Experienced Feedback to Pin Down the Real Goal
If that seems to be the case and stakeholders are missing the real threats to their company that could be addressed in the audit, auditors should press stakeholders on these issues before creating the audit procedures. This needs to be done during the planning stage, or else the audit will have run at least some of its course before it becomes apparent that it will not be addressing the root cause of the problems faced by the company.
Generally, this can be done by asking pointed questions about the context surrounding the need for an audit and providing experienced feedback about the underlying cause of the stakeholders’ concerns.
4. Figure Out How to Deliver on That Goal
Once the true risks and needs are ascertained, the next step is to use them as the foundation for creating the internal audit processes. How the audit runs its course should adhere closely to the needs of the company and its stakeholders. However, audits can be executed in a huge variety of ways. Choosing the one that is appropriate for the calls of the situation can be difficult. Importantly, the risks of not getting it right at this stage can keep the audit from producing results that the company can use to streamline its business or insulate itself from potential liability.
5. Create the Audit Procedure That Executes Efficiently
However, delivering on the goal of an internal audit is only the most basic part of a successful review. Good audits do not just deliver; they deliver a streamlined and efficient result that does not overcharge the stakeholders or their company or waste any time or resources.
This added level of success is something that all internal auditors strive for, and is something that the professionals at Corporate Investigation Consulting take very seriously. Pursuing the goal of the audit without a care for the efficiency of the process increases the costs of the inspection exponentially, and all for very little value added to the company. The results provided in the final audit report end up being expensive to produce, but are often duplicative, meaningless, and little more than filler.
A good internal audit process should strike a balance between these competing demands: The rigid requirement that the audit be all-encompassing and thorough and the conflicting, but softer need that it is also not wasteful.
The Professionals at Corporate Investigation Consulting Can Help
Creating the internal audit process is one of the most important phases of a good internal audit. Without a solid process in place, even a perfect execution will fail to address the needs and concerns of the stakeholders and their company.
The auditing consultants at Corporate Investigation Consulting have helped numerous companies, both large and small, in the past. With CIC’s help, internal auditors have drafted procedures to follow that were both thorough and streamlined, providing effective and actionable plans in the audit report without entering the field of diminished returns.
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