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    What Makes A Sucessful Internal Auditor In 21St Century

    What Makes A Sucessful Internal Auditor In 21St Century


    Audits are first and foremost intended to give comfort to shareholders or investors on the integrity and quality of a company’s financial statements. - Audit engagement leaders are often required to carry out a number of business duties at any one time, which can impact strongly on an engagement. It is therefore essential that they are surrounded by experts who are at least as specialised as the people they are auditing. The snowballing amount of new regulations, the increasing complexity of accounting standards, stronger competition, the pressure to reduce audit fees, peer review, and the dangerous sophistication of audit fraud have made it exponentially more difficult to successfully perform audit engagements.

    The role of the auditors needs to evolve in a number of ways

    • Judgment on the value of an asset, transaction or product in an international context (as is the case with transfer pricing) should be presented in a full and transparent manner
    • Vague, ambiguous, abstract language should be avoided in disclosure statements and good governance reporting should be encouraged
    • Skills should go beyond mechanically applying the new accounting rules, with new assessments, checks and judgments inevitably creating a need for new skills training is not only critical, it is the prime tool that larger firms are using to attract the best talent.

    The most effective auditor of the future possesses wide range of non-technical attributes in addition to deep technical expertise.Advancement of the audit function as it accelerates requires portfolio of skills which determine professional success. Technical skills remain absolutely necessary, but they are no longer sufficient on their own.

    Based on the research it indicates that many senior audit executives place growing value on attributes such as business and risk acumen, analytical skills and communication savvy. These insights requires further inquiry what method do the best audit communicator commonly use; what exactly does business acumen consists of in practice. On the basis of the recent studies it indicates business acumen qualifies as a crucial audit professional to possess, professional auditors indicates that this general attribute area consists of numerous equally important dimensions including :

    • A service orientation
    • Ability to recognize and respond to diverse thinking styles, learning styles and cultural qualities
    • Desire for knowledge
    • Persuasiveness
    • Non-technical attributes has been recognized as competitive differentiators – soft skills are the new hard skills.


    Future role of Internal Audit ’s

    Internal audit would submit the annual audit plan to the audit committee, once approved; the document would guide the function’s activities during the subsequent twelve months. In today’s context the audit plan can change in the middle of the year, although these changes rarely qualify as complete overhauls, they still require sudden shifts and high degree of flexibility.

    The pace of change also has intensified as the business world has grown more global and more interdependent. Regulatory change, economic headwinds and the inter connectivity of business requires most companies to operate in a more agile manner so they can quickly escape threat and exploit opportunities. This dynamic forces internal audit – which is responsible for providing assurance internal controls, risk management and corporate governance as well as consulting services to the business – to remain vigilantly informed of the latest global developments affecting the company and of how the company intends to respond to external drivers of change.

    Audit professionals are expected to operate with the same agility that their companies need to exhibit amongst ongoing external volatility. On a professional level, this agility has two dimensions,

    Ø The intellectual ability required to constantly absorb new information and

    Ø      The flexibility that enables them to switch priorities and projects quickly and comfortably in response to rapidly changing business conditions.

    Seven effective process for Success

    If internal auditors are to help improve the company, their most important capability may getdown to understanding the reality that the world and its companies are changing constantly and quickly as new risks can emerge virtually overnight. Given the pace and magnitude of change, agility and flexibility are far from the only attributes leading audit professional seek. Other highly valued non-technical capabilities include the following:


    Personal integrity is a must have quality at all levels of the audit function. Auditors have a professional mandate to exhibit integrity as well as trust, independence, objectivity and similar qualities in all of their work. When hiring, developing, and promoting internal audit professionals, Partners and their Managers evaluate the degree to which the internal auditors demonstrate the ability to fulfill the mandate. Integrity requires confidence, as well as balance.

    Building relationships

    Cultivating trust and respect with other professionals throughout the business is one of the most pervasive objective across all the internal audit function. Developing healthy relationship with all the levels of business is a long process. Countless hours are invested building trust throughout the Organization. Effective relationship building requires several others attributes, including business acumen, knowledge of the Company and its risks, persuasion and empathy. Internal auditors should start thinking from the management perspective for better understanding of the business and related issues.

    Fostering this credibility helps

    • Reduce resistance during the audit process
    • Increase the speed and volume of information that business partners can deliver in response to internal audit requests
    • Encourage the business to understand and embrace internal audit’s consultative role.


    Effective partnering requires the ability to spot and share best practices, inspiring partners to adopt best practices, requires change management skills. Change management requires an understanding of the current state of a business process as well as clear guidance to business partners regarding how they can think through the system processes and people changes they need to institute to achieve a best practice state. Partnering helps in understanding who the project leaders are, where are they spending their money on, their top risks and their emerging risks, these are important for the audit plan because this is a proactive risk coverage and the business leaders see tremendous value addition by improving the operational efficiencies, identifying potential risks and ultimately making the Organisation a better one.

    At the same time it is also important to stay balanced between providing customer service and meeting all regulatory requirements.


    The nature of organizational communications is changing rapidly, effective communications is a valuable internal audit attribute. Emergence of ever increasing supply of organizational data and information, this transformation places fresh demand on internal audit professionals. People need to maintain an ongoing and two-way dialogue, both formally and informally with the rest of the company. Effective communication skills extend beyond well written reports and verbal communication skills.

    Preparation of audit report requires a sharp written skill that conveys a crystal clear message in as few, well chosen words as possible. Some audit reports are too lengthy therefore it is advisable to read the draft audit report aloud to more easily identify to present crucial information more efficiently and in a more compelling fashion.

    There also exists an increasingly valuable and often overlooked communication skill, internal auditors should focus on sharpening and this is referred as “visual analytics”. As the use of continuous auditing and mon itoring grows steadily, internal audit functions have massive amounts of information to support their conclusions and guidance. The visual presentation of powerful analytics insights remains neglected facet of the internal audit functions communication capabilities.


    The highly integrated nature of the business processes internal audit examines requires intensive collaboration among the auditors with different areas of technical expertise. The same partnering attributes that internal auditors apply while serving their customers also help foster better relationships with internal audit colleagues. This is very crucial and that’s why audit manager identify teamwork as a top competency. Different areas of expertise typically resides in several different internal auditors who must collaborate to deliver seamless service. The ability to thrive on a team requires emotional intelligence supported by sharp business acumen as a key components of this attribute set.


    Stronger teamwork can be achieved through diversity. Changing demographics and the accelerating pace of globalization require internal audit functions to influence and consult with a larger variety of ages, cultures, and subcultures within their companies. It is essential to manage diversity in a comprehensive sense – one that also addresses different thinking and learning styles. Diversity of thought, experience and generational differences are also critical. Auditors could work with different generations and must learn how to flex their styles to communicate with each person they interact with to recognize those differences.

    Continuous learning

    Auditors must have a passion for truly understanding the business and a knack for remaining inquisitive within environments that can change from time to time. The passion for continuous education should sustain throughout one’s career. The need for this continuous learning gene makes perfect sense given the accelerating pace of business change. This is accomplished through a combination of formal training and development programs, certification, rotational assignments, self-guided learning and voracious reading. There is so much one need to learn simply from a business standpoint, never mind from a technical standpoint, and never mind from a leadership or interpersonal standpoint.

    Internal audit function must possess a combination of broad and deep capabilities they will include technical skills, to update the existing technical skills and acquire new technical skills. If an internal auditor has to succeed in this profession in the future they need to be active, flexible, resilient, ethical, empathetic and diverse learners as well.

    This article is contributed by Partners of SBS and Company LLP – Chartered Accountant Company You can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.

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