EXPECTATION OF THE INTERNAL AUDITOR IN REPORTING TO MANAGEMENT

May 27, 2018 News

Introduction

May is designated International Internal Audit Awareness Month by the Institute of Internal Auditors Global (IIAG). The IIA Guyana Chapter (IIAGC), which is affiliated to the IIAG is participating, as with other Chapters globally this month with a programme of activities.
One such activity is the writing of articles pertaining to the practice of this esteemed profession in Guyana. This article is focused on the communication between the internal auditor and its executive management (client) in working towards its goal of adding value to the organisation they serve.
The views expressed are based on my experience over the years as a practitioner and as an executive of the IIAGC.

The Reporting Process Requirements

As part of the audit engagement, the internal auditor is required to submit an audit report which will contain, among other things, the findings and recommendations to its client, that is, executive management. The auditor is guided by the IIAG’s International Standards on Quality of Communications which state that it must be accurate, objective, clear, constructive, complete and timely.
In doing so, the internal auditor must remain professional, objective, and independent at all times in conformity with the Standard on Independence and Objectivity.
Even when auditors are kind and positive, they should not abandon their fact-based findings in exchange for good cooperation from management.
Auditors at all times should have a positive attitude towards management. This might be one of the most important aspects of their work. They should avoid presenting their findings by restraining themselves from sensationalism, and try as much as possible to present positive aspects of their work.
They should explain to management how implementing corrective actions on the findings will be indeed benefit the organisations.
Even though internal auditors do their job based on facts, they need to have good working relationships with other employees in the organisation in order to ensure a long lasting cooperation.
When management understands what internal audit does, it is less likely to respond by making statements such as “Your findings are not true”, “We don’t have time for you’’, or “We are not implementing your recommendations”.
Auditors have been successful in their relationship with management by talking face to face as often as possible. Emails will not convey moods, feelings or body language.
They must use every opportunity to have direct contact and communication with management. In so doing, it will not only enable them to talk to management more easily, but also put them in a position to get additional information if the situation warrants it.
Another critical element of a successful audit is cooperation. A willingness to cooperate makes it easier for internal auditors to establish trust with management. They should always avail themselves to management in order to provide relevant information on time, organise regular meetings, send reminders, and be ready for meetings at management’s request.
The efficiency of internal auditors is centered on delivering quality work to management, being cost-effectively, and on a timely basis. Efficiency is measured by determining whether the auditors:
• Provided valuable recommendations both within and outside the audit engagements.
• Meet regular and special audit deadlines.
• Deliver high quality reports.
• Maintain strong relationships and communication with management.
Concluding Remarks
Maintaining a strong relationship is building trust, which is a long-term process. Auditors may encounter many obstacles, unpleasant people, and bad days, however they share with management a commitment to the same goal, and that is the success of the organisation.
By building trust, management is more likely to view auditors as advisors and partners that they are. The better the auditor’s relationship with management, the more open it will be to the auditor’s critiques and suggestions for improvements.
Since both the auditors and management have the same objective, which is to add value to the organisation, hence this will require an excellent teamwork relationship approach.
The challenge is to get our act together to establish and to maintain this management/auditor working relationship for the success of the organisation. (John Seeram–IIA – Guyana Chapter)