Mind of Jacka: Internal Audit’s Number One Objective

On LinkedIn, Tim Leech responded, “Why would rational managers share big concerns with internal audit if they risk being written up for material weaknesses/significant deficiencies or even offensive audit findings?” A valid question.

I replied that my comments were predicated on the idea that there was a good relationship between internal audit and its clients. I also made the point that, rather than originating from higher-ups, some of the most valuable information comes from those in the lower ranks — people who are just glad to have someone listen to them.

But his response gave me pause. How many audit shops are still residing in the land of the misfit employees — part of the organizational team, but not really part of the team. How many are still tainted by the image of previous internal auditors who would swoop down, find everything and anything wrong, and then ride off with the cry of “Look what we found!!!” How many still find themselves ostracized in the cafeteria, left out of all employee games at the company picnic, and sequestered to an office in the basement next to the boilers and years-old storage? How many accept all of this as their lot in life in an internal audit department?

And then look at how many departments seem to relish this reputation — in fact, revel in it?

Internal audit cannot survive without excellent client relationships. This seems obvious. But how long are we going to have to preach the need to constantly and consistently establish such solid, positive relationships? How long do we have to hammer internal audit over the head with the idea that it is not us against them, it is all of us working together? How long are we going to witness internal audit departments that are not willing to take up the challenge and rid us of this plague?

And how long will it be before all internal audit departments recognize that there is no more important measure than the unmeasurable state of client relationships?

Congratulations, you made it under budget. Hip-hip-hooray, you made every milestone in every audit. Hats and horns, you completed every single audit you scheduled a year ago when risks were completely different. Let’s hear it for you, you achieved every objective measure you made up a long time ago. But, if you did any of this at the expense of your relationship with the client, then it is all tin whistles in a snowstorm.

Building such relationships does not mean bending over backward to agree with them. It does not even mean you always have to meet somewhere on their side of the middle. And it definitely doesn’t mean sacrificing the quality of audit work or findings to be nice and just get along. (I’ve seen shops where this is the case and they are, without question, ineffectual.)

Instead, it means building time in the schedule for relationships, for meetings, and for understanding the client and their concerns regarding the organization, their department, and, most importantly, internal audit.

And remember that this is not solely the role of upper management; it is for everyone in internal audit, from the loftiest CAE to the lowliest clerk. Everyone has a role in getting to know everyone in client operations — understanding who they are and helping them understand who internal audit is.

(And that raises the question of whether you even know who or what your internal audit department is — a long discussion to save for later.)

There is no long-lasting success without building positive relationships with all in the organization. And the establishment of those relationships must be the number one priority for everyone in the internal audit department.