Chief Audit Executives (CAEs) and their teams have been busier than ever trying to prioritize and manage the increase in projects due to COVID-19. We asked project management expert Moira Alexander, founder of PMWorld 360 Magazine, to collect some of her key project management principles and tips to help you successfully manage audit projects during uncertain times.
The pandemic has devastated many businesses worldwide and created a new normal for internal auditors. In an Institute of Internal Auditors survey, “COVID-19 Impact on Internal Audit,” about risk assessment, audit plans, staffing, and budgets, 39% of audit departments have gained new projects due to the crisis, and 15% increased the scope for some engagements.
While nearly half of departments reported canceling some planned audit engagements, 37% of organizations have redirected their internal auditors to conduct non-audit work. Not only does it show a substantial change to the traditional role of auditors — it also signals an uptick in new projects.
Institute of Internal Auditors, COVID-19 Impact on Internal Audit, 2020.
Audit’s new normal within organizations
Many organizations have been focusing on crisis management throughout COVID-19 — and even at this stage when planning for the future may not have recognized the need to directly involve CAEs in a pandemic response task force. This is a critical factor since audit leaders can greatly assist in identifying and managing new risks as decisions are made.
Going forward, CAEs and their teams will need to align more closely with all teams to assess new risks, conduct audit planning, and secure sufficient resources and budgets. Audit planning activities need to be in lockstep with organization-wide and general project management planning.
Institute of Internal Auditors, COVID-19 Impact on Internal Audit, 2020.
Successfully managing your organization’s audit projects during uncertain times means developing or bolstering your audit team’s skill sets to focus on what matters most. These nine project management principles can help to achieve success.
1. A formal project management structure
Establishing a formalized structure for audit projects, including processes and tools like a project charter and project plan, helps ensure tasks are prioritized and successful. This structure provides your audit team with a uniform guide to conduct project work and ensure deliverables are held to the same standards. Standard audit methodology should be captured in templates in an audit management platform to promote this structure and consistency across projects.
2. Project sponsorship
Prosci’s Chief Innovation Officer, Tim Creasey explained that almost 50% of teams say a lack of active or poor executive sponsorship is the cause of project failure. Without executive sponsorship, projects typically fail for these reasons:
- Change saturation
- A disconnect in roles
- Lack of knowledge and ability
Audit projects require the support and guidance of a project sponsor who determines the vision for the project, champions the team’s efforts, and provides guidance when conflict arises, or escalation is necessary.
3. Clear and objective goals and outcomes
It’s not enough to just set goals — it’s essential to document and communicate your project goals to all auditors and relevant stakeholders — and each goal must be S.M.A.R.T.:
- Specific — the goal is well defined, clear, and not ambiguous.
- Measurable — the goal has specific criteria that measure progress.
- Achievable — the goal is attainable, not impossible.
- Realistic — the goal is reachable, realistic, and relevant.
- Timely — the goal is within a clearly defined timeline.
4. Documented roles and responsibilities
Team members need to be assigned an audit project and tasks, with each of their respective responsibilities clearly documented and communicated. This is important in ensuring that each team member understands how their task ties back to the goals. Technology can help organize role-based assignments, with personalized dashboards summarizing all of an individual’s tasks in a single location, as well as automated notifications and reminders.
5. Risk assessment and management
As new post-COVID decisions are being made, there needs to be a shift in thinking. CAEs need to be heavily involved with helping organizations take a more holistic approach. The key lies in re-assessing an organization’s risk appetite and existing internal controls, then looking at the past and current state of each area of the organization and thoroughly assessing how each potential decision might create a risk point. These three tools can help:
- Business impact assessment — to get a pulse on crisis management
- Control impact assessment — to validate critical controls and identify potential failure
- Identify new and emerging risks — that threaten the business’s top strategies.
The impact of each risk point will need to be weighted (using a risk matrix) and strategies identified to manage it. Auditors should work collaboratively with project managers and change management specialists: their collective knowledge and experience will be strengthened by a coordinated approach. Technology can play a key role to help facilitate and streamline these activities as well as aggregating and visualizing results to enable better decision-making.
6. Change management
Managing change and employee expectations pre-COVID was a challenge: post-COVID, it will be more difficult. Why? Change management involves how people think, behave, and work. Employee and stakeholder expectations need to be set and adjusted — and every change, its impact, and decisions made will need to be monitored and clearly documented.
Controls will need to be revisited to ensure they are adequately addressing existing or new risks. Auditors can play a leadership role to anticipate the risks and communicate the implications of change before it happens — for instance, within the medical industry where there could be a risk to human life.
7. Delivery capabilities and capacity planning
The pandemic has presented far-reaching implications for organizations in terms of resourcing. CAEs will need to plan and monitor resource allocation and utilization with precision, made more complex through remote working. This will mean carefully taking stock of all available resources with project-specific skills, then pairing the right talent with each specific project. It also requires evaluating and selecting the right software or tools to plan, monitor, and balance resources effectively and efficiently. Audit teams can enable remote collaboration with audit management tools that simplify workflow, document management, issue remediation, and reporting.
8. Communication management
Communicating with audit teams, leaders, project managers, and all other stakeholders has become a challenge for many organizations. Until now, many audit teams had not necessarily anticipated the need for remote teams, nor acquired secure web-based collaboration tools to work and meet under these circumstances.
Going forward, there needs to be a shift in thinking and behavior regarding more frequent and timely virtual check-ins, planning sessions, and status updates. CAEs will need to assemble remote audit teams and adopt technology to improve efficiency and communication — and all technology will need to be secure and in compliance with data protection and privacy laws.
9. Performance management baseline
Without close coordination and communication, scope creep can quickly become an issue. CAEs need to closely align their team’s efforts with portfolio and project managers’ activities to avoid overlap, conflict, missed objectives, and new risks.
The scope of audit projects relies on meeting cost, schedules, and quality, and there should be a baseline or plan against which to measure performance. This is key to identifying which projects and tasks were successful — and which were not.
Following these nine essential project management principles can secure your audit project’s success during times of uncertainty.
Learn how AuditBoard's integrated suite of easy-to-use software (audit management software, SOX compliance software, risk management software, audit workflow software, and compliance management software) can empower your team.