ACCOUNTING, AUDITING & ATTEST
Internal Audit: To Yield Value, We Must Collaborate BY JOSE M. BORBON, CPA, KEARNY BANK
While internal auditors must remain independent to provide objective assurance, to add value they must also deliver expert advice to improve an organization’s operations. Consulting activity, by its very nature, is collaborative, and internal auditing is no exception. By fostering collaboration, internal auditors can expect to receive desired behavior, quality information/support and expanded explanations for select business transactions from their auditees. To establish the rapport necessary to enable collaboration throughout the company, it is recommended to start with “why,” offer a value proposition to auditees and encourage inclusive real-time information sharing. START WITH “WHY” Most people within an organization need to motivate others to act for some reason or another, this is particularly true for internal auditors. Although auditees
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SPRING 2021 | NEW JERSEY CPA
are required to provide information, fulfill requests and answer questions, the way in which auditors communicate can determine how promptly the information will be provided as well as the quality and depth of said information. One way that auditors can communicate with their auditees is by using the concept of The Golden Circle. Introduced by author and motivational speaker Simon Sinek, The Golden Circle essentially states that individuals and companies are inclined to achieve more if they start with “why” before stating “how” and “what.” For instance, instead of sending a request to “provide off-balance-sheet commitments by xx date” one could instead say, “In order to properly assess the company’s cash flow, we are in need of the off-balance-sheet commitments as of xx date.” This may sound simple, but it is highly effective in conveying purpose and inciting action. This is very important when people have
competing priorities and operating constraints due to the ongoing pandemic. OFFER A VALUE PROPOSITION Internal auditors must highlight the value that can be achieved by contributing to business activities such as being involved in a core system conversion, consulting when acquiring a company or participating in corporate training. By welcoming internal auditors as active participants when these business activities take place, auditees benefit from having a person who is independent from the activity, has a bird’s eye view of the event and is risk-minded ready to opine and consult. Internal auditors benefit from having a seat at the table by receiving material information in real time, thereby enabling them to plan the audits of the impacted business lines accordingly, adjust risk assessments and aid with continuous auditing efforts.
