Pages: 3

This chapter focuses on people as internal audit departments need to hire, develop and retain talent better. Organizations need stronger IA functions and leadership practices; auditors must be more effective and efficient when constructing and completing risk assessments, conducting business monitoring activities and managing audit engagements. They need to identify smart audit scopes, complete audits faster or in 90 days, design and implement more continuous auditing tools and leverage relevant data (e.g. in audit engagements, including risk assessments, business monitoring activities and issue validation activities). Audit leaders must build stronger relationships with stakeholders and manage and motivate their audit teams too. Organizations worldwide must focus on audit transformation, and COVID-19 has accelerated this. Audit leaders need to challenge audit teams to look outside the box to leverage key data, understand the business under review and the regulatory landscape, and to align the assurance activities to the areas of highest risks where the most value could be added.

Pages: 15

This chapter covers how to manage internal audit engagements or other audit activities more effectively. Stakeholders have higher expectations regarding internal audit departments as the control environment is more complex, and companies are exposed to higher risks after the pandemic. It is relevant to select, retain and develop talent, and have more proactive and continuous audit tools to identify emerging risks and relevant findings to add more value to the stakeholders. Internal audit leaders need to make innovation a centrepiece. This chapter includes key ingredients that a leading IA function should have in place and consider elevating the internal audit role in an organization.

Pages: 9

This chapter covers the three lines of defence model. Understanding the three lines of defence model is relevant to build good relationships with stakeholders and to drive change in an organization. The three lines of defence model can help an organization grow, strengthen and always win. Audit leaders have an important role to manage and improve the communication with others; the three lines of defence should work together to improve the control environment. This chapter covers some of the best internal audit leading practices for a successful integrated three line of defence model. Why is it so important to engage with others and how? This chapter will answer this question and more.

Pages: 6

This chapter covers how to add more value to the organization through audit engagement, audit activities and other interactions with stakeholders. When you speak with auditors, they are so convinced that adding value to the organization is their high priority. However, when we reach out to their stakeholders sometimes there is a disconnect. Thus, having a clear definition of how to add value to an organization is not an easy step and requires constant working, good communication and transparency with our stakeholders and the board of directors. This chapter covers how to add more value to audit engagements and during key audit activities (data analytics/innovation, issue validation activities, advisory activities). Are you adding value to your stakeholders? How?

Pages: 11

This chapter covers important tips to help auditors to conduct more effective audit engagements. Conducting timely and smarter audits is expected but not always happens due to different challenges faced by auditors. This chapter describes key activities, milestones and key deliverables during each regular audit phase (planning, fieldwork and reporting), including a new audit phase, the pre-planning one. Audit leaders need to build closer relationships with their stakeholders and include their concerns, challenges in the risk-based audit plan and the audit scope to add more value to the organization. Thus, auditors need a more structured and disciplined approach to succeed; thus, tips and tools will be provided.

Pages: 6

This chapter covers how to conduct detailed and effective business monitoring activities to identify relevant findings and add value to your stakeholders. An auditor should consider taking a value approach when designing business monitoring activities every quarter. Business monitoring activities should provide a quick assessment of the current control environment by identifying emerging risks, new trends outliers and may require accelerating audits, if relevant concerns are identified. This charter also introduces continuous auditing tools which also complement business monitoring activities. Thus, a proactive approach is highly recommended but will require more data analytics tools and of course more audit hours to build and utilize new innovative tools.

Pages: 6

This chapter covers how to complete detailed risk assessments for auditable entities. An audit risk assessment is critical to conduct effective and efficient audits. Risk assessments need to be flexible. Risk assessments will add more value to stakeholders, if more detailed and flexible risk assessments are maintained and updated often; automation is key here to facilitate the audit plan construction. This chapter covers how to design and implement a more effective and efficient approach – the value approach – by considering key risk drivers, leveraging more data and considering other important ingredients. For example, it considers the relevance of data, metrics, business knowledge in completing or updating a risk assessment.

Pages: 9

This chapter covers the audit plan construction. Audit leaders need to be more flexible with the annual audit plan; organizations need more proactive audit leader to drive the audit transformation. Organizations need audit leaders who have the passion to lead the IA transformation, who can challenge things and drive more positive changes in the organization. We need to deeply support those IA leaders that become passionate about taking a value approach when defining the audit plan; they will be able to transform the way audits are being conducted. Innovation is key and the time is now.

Pages: 9

This chapter introduces the concept of audit plan capacity and how to allocate effectively resources to audit engagements and other audit activities. Managing audits effectively requires good strategic planning whilst ensuring that all internal resources are appropriate and effectively allocated to the most critical audits and advisory activities. A model approach is shared to determine the right capacity and the allocation of resources timely to different audit activities; it will also help to manage the annual budget better by reducing cost. In addition, a skills gap analysis is required to identify the potential resource gaps; timely identification of resource gaps will facilitate the resource planning and allocation of resources to the most critical audits and other audit activities.

Pages: 12

This chapter covers issue validation activities by taking the value approach. Auditors need to monitor the issue pipeline constantly to complete issue validation on time. They need to engage with stakeholder effectively to provide credible challenges and relevant feedback before issues are ready for internal audit validation. This chapter covers some critical challenges faced by auditors when issues appear to be ready for validation but they are not, and how to help the business to reduce the re-open rates (e.g. self-identified, audit and regulatory issues) by engaging much better with stakeholders. Auditors need to be more efficient when validating issues, and this chapter covers relevant tips and best practices.

Pages: 6

This chapter covers the audit working papers and how important it is to complete detailed reviews before publishing the audit report. It includes workpaper requirements, relevant tips and best practices. Audit workpapers support the audit conclusions and could be requested by others including regulators. Documentation should be clear enough to understand testing conducted, exceptions identified and final conclusions. The documentation must stand independently and allow another person to reach the same conclusions. All working papers must support the detailed findings in the audit report, as well. Thus, good tips are shared to improve the quality of workpapers including the final audit report.

Pages: 9

This chapter covers how to manage the stakeholder relationship. For any audit function to succeed, auditors need to identify their key stakeholders first in order to manage and improve relationships with them. Building stronger relationships requires a well-thought-out action plan. This chapter includes tips to build trust, communicate difficult audit findings and manage critical conversations, including how to manage different stakeholders’ styles. To be an effective and influential audit leaders, they must build and maintain strong relationships, need to be involved in key initiatives and projects, and have a seat at the table. Managing conflict is also necessary; conflict can sometimes be the best way to drive change in an organization.

Pages: 13

This chapter covers tips for planning a smart audit. Auditors need to be more efficient during pre-planning, planning, fieldwork and reporting phases. Auditors need to complete audits faster and within 90 days. However, auditors face several challenges during the audit engagements; this chapter includes auditor’s challenges and additional tips to facilitate the successful audit completion. Audit leaders need to be engaged with their teams, encourage a disciplinary approach and set clear and realistic deadlines and expectations. Auditors need to leverage more data analytics and engage often with their stakeholders to gain additional knowledge, share feedback and define a smarter audit scope.

Pages: 14

This chapter covers the relevance of data analytics tools and continuous auditing. Audit leaders need to elevate the internal audit role in the organization and take additional steps to build a stronger data analytics function to support the business transformation. Data analytics is key to any word-class IA department. While the use of data analytics has certain benefits, some IA departments are still struggling to find the resources or to understand how to get access to the data. This chapter includes good ideas to build design, implement and use more data analytics tools that could be used during issue validation and business monitoring activities, and audit engagements.

Pages: 8

This chapter covers tips and techniques to complete audit engagement in 90 days. Auditor faces several challenges that impact the audit timeline. Having a more disciplinary approach during the audit planning, fieldwork and reporting phase could facilitate this process. However, additional work is required during the pre-planning and planning phase. This chapter helps auditors to facilitate this process by implementing a more disciplined approach, sharing the rules of the engagement with stakeholders, leveraging more data analytics and sharing audit findings fasters, among others. Proper preparation will significantly speed up the entire process. Auditors and stakeholders must be fully prepared and engaged during the audit.

Pages: 9

This chapter covers how to build and recognize a first-class internal audit team and what are the most critical qualities to look for when selecting auditors. This chapter will cover some of those qualities such as critical thinking, good team players, diversity and inclusion, data analytics, motivation to learn, curiosity and other relevant skills, among others. Collaborating closely with stakeholders can benefit the business and IA teams. Active communication with stakeholders throughout the audit process or issue validation activities in the pre-planning phase is essential to minimize re-open issues and to add more value to the organization. This chapter covers also the soft skills required to manage difficult conversations. Audit leaders must inspire change, lead with passion and have an excellent attitude to impact others. Human nature is relevant and important.

Pages: 6

This chapter covers how important it is to develop audit team by coaching and designing adequate training. An internal auditing (IA) function that encourages continuous training will impact the development of skills gaps, enhance team effectiveness and provide more value to stakeholders. The training set and offered should meet the complexity of the industry and areas to be audited, including business and systems knowledge and data analytics, as well. This chapter highlights the current skills gaps and how audit leaders can successfully address all in short and long terms by focusing on developing personnel. This will help them to remain competent in the growing and dynamic profession of IA.

Pages: 9

This chapter covers great tips to manage and motivate your audit team. This is a very important topic as some audit departments are suffering a high attrition rate and have not figured out the best way to resolve this. People join organizations but leave bosses, so this chapter is relevant and describes great tips to motivate your team in this current environment (remote work). Organizations must invest more in talent retention, management selection, coaching and development. Audit leaders make all the difference; they must empower people by trusting them and providing them with the right technology tools and opportunities to discover the best in themselves and others. Good leaders develop better leaders.

Pages: 8

This chapter describes how to recognize a world-class internal auditing (IA) function. Organizations that can achieve the “World-Class” distinction have a competitive advantage such as better reputation; more confident shareholders and board of directors; better IA methodology; best practices, policies and procedures; lower attrition rate; high team morale and so on. This chapter describes some of the key attributes to build, recognize and maintain a “World-Class” IA function. Strong leadership is required; more innovative leaders must focus on key business initiatives, strategies, digital transformation and talent retention and development. Innovation and data analytics also play a key role in the IA transformation.

Pages: 17

This chapter covers top risks and hot topics, including fraud, cybersecurity, digital transformation, technology, business continuity and crisis response, third parties and regulatory risks, among others, and how IA can add more value by reviewing these topics earlier and more effectively. In a turbulent environment and with increased operational losses, fraud and cyber risks, auditors need to adjust their audit programmes, have flexible risk assessments, update their testing approach and leverage more data to identify emerging risks faster. Many third-party vendors may not have robust security policies and are more vulnerable to these events so IA can help with a more innovative testing approach.

Pages: 18

This chapter describes the internal audit role in fraud assessments. With the pandemic and considering other potential black swan events, organizations need to be much more proactive, flexible and innovative to proactively identify, discuss and implement measures to minimize fraud risk. This chapter describes key risks and hot topics to cover during audit engagements, how to build more analytics tools and how to help the business to implement better self-assurance activities, monitoring tools to identify trends and patterns faster. This chapter will also provide great examples to enhance fraud testing activities to provide more value to your stakeholders. Thus, organizations need more preventive controls to identify, discuss and implement additional measures to minimize fraud risk.

Pages: 8

This chapter covers the IA role in auditing culture; why it is so relevant to auditing culture nowadays, current audit challenges, key risks and controls to test; and how to identify a culture risk (root cause analysis approach is shared), including the resource capacity and skills required to conduct this review. Ethical behaviour is a critical ingredient of good corporate governance. The chief auditor can be a fantastic leader to drive the IA transformation, and to enhance the culture embracing challenges, and looking for additional opportunities to develop and enhance the skills required to conduct culture audits. Data plays an important role here but identifying the right data is relevant to identify potential trends and concerns.

Pages: 10

This chapter covers the internal auditing (IA) role in auditing blockchain, current challenges, key risks and controls to test and how to select and develop the audit skills required to audit blockchain. Audit leaders must build teams with proper skills to audit blockchain technology and cryptocurrencies. Subject matter experts (SMEs), stronger IA testing programmes and more innovative tools will be required to monitor and review key controls. The technology will advance so much that new tools and enhanced protocols across industries will be a new reality. No standard testing programme will be sufficient to audit blockchain and cryptocurrencies and must be adapted to each organization as this technology continues to evolve. Thus, IA has a marvellous opportunity to provide excellent value when assessing new or emerging risks and technologies.

Pages: 12

This chapter covers the relevance of the chief audit executive’s role in an organization. It will also covers certain important questions you may have such as what is the best leadership style for a world-class audit?, how to recognize good leaders?, and what’s the future of leadership, including holistic leadership? The IA function should have a more impactful role by challenging senior management, key projects or business initiatives by leveraging more data analytics and technology tools. Audit leaders must have the courage to challenge the traditional approach and to drive more changes and value. We need strong leaders to drive change and to take an organization and the audit team to the next level.