Internal audit has a critical role in providing independent assurance as well as acting as a trusted advisor to the business — but there are specific traits that set a high-performing audit team apart from the rest. What are the characteristics of effective audit teams? What are the bad habits holding the internal audit team members back from greatness? See where your department stands, and learn how to build and sustain a successful audit department!
What is an audit team?
An audit team is an independent function in an organization that helps management achieve its objectives by evaluating the risk and control environment. Yet, internal audit departments rarely look in the mirror and perform a critical assessment of their own traits. While we spend so much of our time thinking about how other teams are performing, it is an essential exercise to perform for ourselves if we will continue to grow and succeed.
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 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, an exemplary audit professional is always seeking to apply their skillset toward adding value to the team, organization, and profession.
It’s no surprise that the characteristics of great internal audit professionals are the same ones that make effective audit teams. Audit department leaders must understand the foundations and traits of effective audit teams, as well as bad habits to avoid that decrease an internal audit 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 internal audit teams may find it easy to reference the same schedules, checklists, programs, and controls to test from year to year, a more effective internal audit function considers whether its activities align with enterprise-wide risk coverage. One indication of an excellent 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 teams 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 essential 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 chooses the same boilerplate risks, and controls, and checklist audits, or they only focus 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 continuously 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. Effective audit teams 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 member turnover.
Signs an audit team may not be adding measurable value:
- Lack of instruction, direction, greater purpose, 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 internal audit team members develop and maintain positive relationships. This applies to relationships both in the department and with audit clients, process owners, and control owners across the business for internal audit. 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:
- The internal audit team has a confrontational attitude and relationship with the business.
- Clients frequently ignore emails and calls, and they fear meeting with internal audit teams.
4. Audit Team Attracts and Develops Top Talent
As we know, effective audit teams are composed of successful audit individuals. A great audit team puts effort into recruiting and retaining top audit talent. When an internal audit department is performing at a high level, other employees in the business will want to join the internal audit team, recognizing the opportunity to work on exciting projects that expose them to all areas of the business.
One indication of a successful internal audit team is that it has little turnover, but serves as a career launching pad for internal audit team members 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:
- Audit team members feel like there is no change or opportunity for growth.
- Audit team members are not engaging one another and isolate themselves.
- Frequent external turnover.
5. Internal Audit Leverages Technology for Efficiency
Internal audit teams that take advantage of technology to automate processes and maximize efficiency prepare themselves for success. When implemented correctly, the right technology 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. By leveraging technology effectively, an internal audit team 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:
- The 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.
The Key to Building and Sustaining an Effective Internal Audit Team
For internal audit department management and hiring managers, the key to building and sustaining effective teams lies in understanding that successful teams stem from successful individuals. Building a great internal audit team doesn’t happen overnight, but understanding the traits of high-performing audit teams is an essential step toward strengthening these areas in your groups and gradually improving your department as a whole.
Great internal auditors gainjob satisfactionwhen they spend more of their time and resources aligned to their organization’s key objectives. If you are ready to learn more about building and sustaining an effective audit team, download our free Audit Plan Checklist. The Audit Plan Checklist explains how internal auditors can create more meaningful and engaging audit projects.
Aaron Wright is a Director of Product Solutions, UK&I at AuditBoard. Before joining AuditBoard, Aaron was an Internal IT Audit Advisor at Cardinal Health, where he managed a risk-based audit plan and led internal audit projects focused on infrastructure, cybersecurity, and applications. Connect with Aaron on LinkedIn.