Saturday, June 24, 2017

We all have our fair share of stereotypes to deal with. There is, in fact, at least one for every perceivable slice of the society. There’s one for Asians, Middle-easterners, for Indians, for blondes. It’s quite natural – if you can gather a group of people based on a common characteristic, it’s pretty certain you’re going to arrive at something. Unfortunately for auditors, this ranges from the slightly passive “desk-jobbers”, to the eyebrow-raising “nitpicking fear-mongers”.

In recent years, Internal Audit teams the world over have started to take on a more proactive stance toward the performance of their functions, gradually shedding this stereotype in the process. This new way of auditing, however, isn’t technically “new”. It has been how audit has been defined for a long time already, and just now that auditors are starting to realize the full potential of their roles.

So what are auditors doing differently now?

They provide one thing management values highly – insight. More than just assessing internal controls and pointing out lapses in the implementation, auditors also provide insight into how management can improve the way it executes its processes.

Auditors can do this because auditors occupy a unique position in the organization. Internal auditors work with different business units throughout the audit year. This gives them an overview of the different business units and, in the case of process-based audits, an overview of an entire process, end-to-end. Having this kind of an exposure, auditors have an idea how alternatives to a decision affect the business units, as opposed to a rather confined view of a specialist from a single department.

The good thing is that this shift is timely. Running a business today is harder than ever, thanks to tighter regulations, tougher competition, more demanding customers, and a whole lot of other risks. It is in this time, that businesses need more partners they can trust. The decision makers need to be more confident that they are making the right call.

This year, the Institute aligns its initiatives to this movement, with the theme A Trusted Partner in Driving the Enterprise Forward. We will be challenging audit teams to drop stereotypical policing audits and instead start developing a partnership with management. For entities who have already adopted this thinking, we challenge them to make the most out of their built relationship with management.

All this is not to say that audit is to lose its independence. Audit need not yield to management pressure if it can advance a stronger argument than the former. It does not mean that everyone will get a green light for everything.

Internal Audit must maintain independence, but independence need not beget indifference. IA has to keep in mind that audit and management are working towards a common goal of helping the business attain its goals. We want auditors to be recognized for actual, tangible benefits that management has had because of their insight. We would like to see our profession evolve to something that, when the rest of the company looks toward the horizon and they turn their heads to the auditors, they’ll see us looking in the exact same direction as well.

This is the vision of the future, and we at the Institute of Internal Auditors – Philippines are ready to make it happen.