What are the characteristics of high-performing audit teams? What are the bad habits that hold them back? See where your department stands, and learn how to build and sustain a successful audit department!
What makes a first-rate audit professional? An exceptional auditor displays strong critical thinking skills by consolidating information from disparate sources into the bigger picture. They have the flexibility to consistently adapt under changing conditions. A technologically-savvy auditor understands how to navigate through various tools and applications. The highest performing auditors are effective at building positive and strategic relationships. Most importantly, a top audit professional is always seeking to apply their skill set toward adding value to the team, organization, and profession.
It’s no surprise that the characteristics of great auditors are the same ones that make great audit teams. It’s crucial that audit department leaders understand the foundations and traits of effective audit teams, as well as bad habits to avoid that decrease a team’s effectiveness. By working to ensure that your group embodies these five key traits, you’ll be on track to build and sustain a successful audit team.
1. Internal Audit Has a Global Scope of Risks
Though audit teams may find it easy to reference the same schedules, checklists, programs, and controls to be tested from year to year, the internal audit function ceases to be effective if it doesn’t stop to consider whether its activities are aligned with an enterprise-wide risk coverage. One indication of a great audit team is that they align their audit plan and scoping areas with the business’s evolving risks and growth areas.
One way audit departments achieve this is by educating themselves about new compliance standards, regulatory frameworks, and changing laws, particularly in regions or countries where the business is expanding. For global companies continuing to grow internationally, internal audit can help by performing global reviews and ensuring that risk is being managed appropriately across new countries and regions. As risks increase in number and complexity, it’s especially important to have an enterprise risk management plan that ensures coverage over the global scope of risks.
Signs an audit scope may be limited:
- The audit plan lacks perspective on the organization as a whole
- The team is picking the same boilerplate risk and control lists and running checklist audits, or is only focused on SOX instead of operational audits
- The audit scope is repetitive year after year
2. Internal Audit Adds Measurable Value to the Business
It may seem like overhead is constantly being reduced, but company cost-cutting makes it more important than ever for internal audit departments to prove their contributions to company initiatives. Performance metrics are the evidence internal audit teams need to show their alignment with the business’s strategic objectives. Successful audit teams are ones that can clearly and effectively measure how their activities are supporting company goals, which puts them in a strong position to demonstrate their value to the audit committee.
Effective performance metrics to track include:
- A demonstrated decrease in issues and deficiencies year over year, due to education, audit results, and enhanced strategic partnerships with the business
- Decreased financial loss due to fraud year over year
- Increased auditee survey satisfaction scores
- Low internal audit team turnover
Signs an audit team may not be adding measurable value:
- Lack of instruction, direction, greater purpose, and/or specific goals
- No ability to measure and report on the team’s value and importance
- Difficulty engaging with and collaborating with auditees and executives
3. Internal Audit is a Partner to the Business
Great teams are built from members who can develop and maintain positive relationships. For internal audit, this applies to relationships within the department, but is also crucially important with audit clients, process owners, and control owners across the business. Internal auditors can sometimes come across as if they’re police officers monitoring for cheap tickets, when instead they can and should be working with auditees to help improve business processes and support company growth. Internal audit teams that develop constructive relationships with their auditees often find their audit customers are more welcoming and proactively helpful during the audit process, which leads to more successful audits.
Signs an audit team may not be acting as a partner to the business:
- Audit has a confrontational attitude and relationship with the business
- Clients frequently ignore emails and calls, and fear meeting with auditors
4. Audit Team Attracts and Develops Top Talent
As we know, successful audit teams are composed of successful audit individuals. Clearly, a great audit team is one that puts effort into recruiting and retaining top talent. When an audit department is performing at a high level, other employees in the business will want to join internal audit, recognizing the opportunity to work on exciting projects that expose them to all areas of the business.
One indication of a successful audit team is that it has little external turnover, but serves as a launching pad for careers across the organization. In many ways, working on a top internal audit team is akin to going through an MBA program within your own company. Whether the internal auditor moves on from their position to another part of the company or joins a new organization, time spent in the audit department prepares individuals to bring a culture of risk and compliance awareness wherever they go.
Signs of a stagnant and unappealing audit team culture:
- Team members feel like there is no change or opportunity for growth
- Team members are not engaging one another and keep to themselves
- Frequent external turnover
5. Internal Audit Leverages Technology for Efficiency
Audit teams that take advantage of technology to automate processes and maximize efficiency prepare themselves for success. The right technology, when implemented correctly, can help audit teams achieve better organization, communication, visibility, reporting, and allocation of time and resources, all of which add up to greater overall efficiency and available time to engage in strategic audits. An audit department that leverages technology signals creativity, forward thinking, and progressiveness, qualities that can help internal audit in its goal of attracting and retaining top talent.
Signs an audit team may be technologically lacking:
- Audit environment is still manual, and information is stored in spreadsheets and shared folders
- Technology is outdated and the team is not empowered to use tools toward their continued success
For internal audit department heads and hiring managers, the key to building and sustaining effective teams lies in understanding that successful teams stem from successful individuals. Building a great audit team doesn’t happen overnight, but understanding the traits of high-performing audit teams is an important step toward strengthening these areas in your own groups and gradually improving your department as a whole.