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Mind of Jacka: Time, Time, Time, What Has Become of Me

Blogs Mike Jacka, CIA, CPA, CPCU, CLU Jan 31, 2022

To begin with, ten extra points for those of you who got the musical reference in the title. Moving along…

Time. Seems like we never have enough of it. Even as we sat sequestered in our residences with what felt like unfathomable extra time on our hands, promising we would catch up on all the things we had put off over the years — learning a foreign language, doing more reading, pursuing a new hobby, developing a new skill, baking sourdough, cataloging our lint collection — how much did any of us actually accomplish?

Sadly, this is not particularly new for the audit profession.

Time. We in internal audit lament our need for more time — time to learn data analytics, time to catch up on the latest trends and applications, time to get training, time to get a better handle on risks, time to get a better feel for organizational operations, time to complete the needed testing, time to get the report written just so. All we ask is for one more hour, one more day, one more week, one more auditor, one more resource, one more anything that will give us the additional time we need to get things right.

Just give us time.

Time. To paraphrase Mark Twain, everybody talks about it, but nobody does anything about it. Nearly two years of experimentation allowed during the pandemic, and what have you and your department done about using time more practically and more efficiently?

I know there have been some solutions out there. In particular, some departments have used this situation to build better automations and analytics — using the power of computers to accomplish tasks faster and more efficiently. However, the majority of us are still facing the same issues that we have sworn we would conquer for many, many years.

The IIA has issued a new Global Knowledge Brief titled, "Audit Life Balance – Survey: Too Much Time Spent on Inefficient Systems" and it has something to say about the way we use time. (Note: you have to be a member to access the report. A reminder that [with apologies to American Express] membership has its privileges.) As with other IIA publications, there is good and interesting information contained in the report in an attempt to "capture some of the changes and challenges brought on by the pandemic..."

However, because we are talking about "time" here, I want to focus on the results for one question from the survey. The question was posed this way: "I currently spend too much time on: (Select all that apply.)" The question intended to show that internal audit needs to eliminate many of its manual processes. No argument here. As already noted, some departments have used this opportunity to explore new and better methods. However, as noted in some of my railings from the past, we are excellent at saying we need to automate, but then take little-to-no action in that regard.

However, the results related to this question have additional layers beyond the issue of automation. And each response tells a different story about internal audit, our processes, and our approaches to the work we do. Following are the responses to the questions indicating where too much time is spent, the percentage of respondents who felt that area applied to their situation, and some additional thoughts.

Reporting 42%  Is there anyone out there who is surprised that so many people felt too much time was being spent on reporting? We cannot seem to get a handle on report writing — that is, the process of writing the report. While automation may be part of the solution, I think there are more significant issues than automation can solve. Here are the kinds of things I have seen as I have worked with audit groups over the years. Audit management doesn't know what it wants. Audit doesn't know what its customers want. No one knows how to provide constructive reviews during the report writing process. Auditors don't understand what should be contained in a report (and, sadly, that includes not understanding what the 5 Cs are all about.) Auditors don't know what they are trying to say. Any of the above. Some of the above. All of the above.

Obviously, each of these issues can be a dissertation in itself, and I have disserted about them quite often in the past. But there isn't time to go into all this right now. Suffice to say that, if you really want to save time, if you want to more efficiently use your time, and if the process of report writing still gets you down, explore each of these questions and see if you really know the answers. And see if those answers don't lead to solutions.

Audit Follow-up 41% — Issue Remediation 33%  I am combining these two areas because I think they reflect some of the same issues. I will start by saying that this one caught me by surprise. Why would audit follow-up be so time consuming? First, if there is no automation, the amount of time spent identifying when follow-up should occur, when responses are due, if responses have been received, if follow-up is necessary, etc. might be a burdensome task. And there may be more behind this response regarding what follow-up means within the department and how that work is accomplished.

But I also wonder how much of this relates back to issues in report writing. The number of people I talk with who issue reports without agreed-upon corrective action is staggering. Even more staggering is the excuse I hear most often: If they waited for that corrective action, the reports would be delayed. This is foolishness. Our work isn't done until we have agreement. And if we can't get agreement at the time of the report, what makes us think true agreement will ever occur?

Further, if we are having troubles with follow-up and remediation, then we have to wonder how successful our identification of root causes and related solutions really is. If we have found a problem, and we have identified the root cause, and we have come up with a corrective action, and we have agreement, then actual follow-up and remediation should be a slam dunk. But the key lies in that one word…agreement. And without actual agreement from the client — not just lip service paid to get the auditors off their backs — then remediation will be almost impossible.

Collecting Evidence 40%  Another one that surprised me, but for a different reason. Collecting evidence strikes me as the root of what internal audit does. How can it seem we spend too much time on it? All I can figure is that respondents were reacting to the need to speed things up with data analytics — with the need to use the automation tools that are available.

I should note that, if auditors feel they are spending too much time in this area, then someone needs to ask questions about how the work is being done and what work the auditors feel they should be doing. If the auditors do not feel they are supposed to be collecting evidence, then what is it they think they should be doing? I'm not saying that any of this is wrong; I'm only saying it is an issue that might require closer scrutiny regarding the auditors' attitude and understanding of their work.

Staff Meetings 34%  How is this not higher? I will simply say that we know we all waste time in meetings. And I offer three questions to ask prior to every meeting: Is there a purpose and agenda? Who has been invited that doesn't need to be there? Does this meeting really need to happen at all? Answer these questions truthfully and you will find your meetings will be briefer and there will be a lot fewer of them.

Timekeeping 19%  Sorry, this is just funny. One-fifth of respondents felt time was being wasted keeping track of time. When I worked at Farmers Insurance, I know we spent too much time in this area. When scheduling, we were literally taking into account how much time was being spent keeping track of time. On the other hand, I worked with an audit department that did absolutely no timekeeping. I don't know how they did it — I don't know how they were able to accurately plan and schedule. However, I know they were successful; audits were being completed, and executive management was happy with their work. I saw the success, but I couldn't quite figure out or buy into the approach. (Even the most creative of us sometimes have trouble being flexible.)

Just note that, if the auditors think this is where time is being wasted, then someone should deeply explore what is going wrong in the way the department keeps track of time.

So, the above provide some interesting insights into how audit departments and auditors feel time is being wasted. And it says a lot about the work that is being accomplished in some departments. But it really comes down to the question that should be asked in every audit department and that every auditor should ask themselves. Where is time "wasted" — where is too much time spent in the department? Identify these areas, and then attack them. Find the time to find the time to save time.

A great quote from CEO and author Elissa Hartwig: "Instead of saying, 'I don't have time,' try saying, 'It's not a priority' and see how that feels." And let me turn it on its head. Instead of saying, "This is where we spend our time," say, "This is a priority." Then see if that really makes sense. (I'm looking at you, people spending too much time on timekeeping.)

P.S. For those of you who didn't get the musical reference, it's the opening line to Simon and Garfunkel's song "Hazy Shade of Winter." (Partial credit goes to those who identified the artist as the Bangles — a remake of the original.) And if you don't know who any of those people are then, well …Get Off My Lawn!!!!

Mike Jacka, CIA, CPA, CPCU, CLU

Co-founder and Chief Creative Pilot, Flying Pig Audit, Consulting, and Training Services (FPACTS), based in Phoenix.