Audit Skills - Dick Anderson`s Deck for the Presentation

Career Skills for
Aspiring Auditors
Beta Alpha Psi
October 24, 2012
Richard Anderson MBA, CPA
Partner (Retired) PricewaterhouseCoopers LLP
Trustee – IIA Research Foundation
Where did this topic
come from?
The question I received from
PwC staff;
“What skills are most
important to develop to
qualify and be successful
at higher levels in the
1) Look at skills from two different perspectives;
• Skills Development for You
– Core / Traditional Skills
– How they are evolving
• Skills Now Needed for Higher Levels of Advancement
Expectations of Your Key Stakeholders
2) Some thoughts on managing your career
First Response – Focus
on Core/Traditional
Audit Skills
People Management and Teamwork
Effective Communications
Technical Auditing Skills
Critical Thinking Skills
Business knowledge
Traditional Skills –
Evolving and Changing
IIA’s Audit Executive Center Spring 2012 Survey
Traditional Skills –
Evolving and Changing
Critical thinking skills
• Most sought after skill in AEC semi-annual
surveys last two years
• Some IA groups are now testing for this
Traditional Skills –
Evolving and Changing
Business knowledge:
• Consistently one of the top five skills since
surveys were started by the AEC in 2008
• IA groups get this knowledge through a
variety of ways
• “Pre-condition” to enhancing risk
assessments and providing assurance over
risk management
Traditional Skills –
Evolving and Changing
Technical Auditing Skills:
• Quite likely will include data mining and
data analytical skills going forward as core
technical skills expected of all staff
Traditional Skills
• What wasn’t on the list?
Changing View of
Traditional Skills
• They are important “foundational” skills
• Critical to “qualify” for consideration for
upward movement
• However: they are not necessarily the
skills for long term success
• Gets you into the game
• May not be game winners at higher levels
Career Focused Skills
• Not necessarily new, “undiscovered” skills
• Have a higher significance and premium
because of today’s more complex and more
dynamic world
• These skills demand more than just
– Acknowledge the need to master, and
– Actively develop the skills
Career Focused Skills
All are applicable to auditors seeking
high-level advancement inside or outside of
the profession;
“ Nearly seven in ten CAE’s see internal audit as a
springboard for advancement into other
executive management positions at their own
companies or into a CAE role with greater
auditory at a larger company”
Grant Thornton Chief Audit Executive Survey 2011
Career Focused Skills
More broad-based, personal
attributes for future development;
Continuous Learning
Talent and Diversity Management
Charles Darwin: “……’s not the
strongest of species that survives,
nor the most intelligent, but the one
that is most adaptable to change.”
The ability to change to fit changed circumstances.
Critical for long term career success
Proactive personal adaptation vs. reactive
Involves taking some personal risk
– Experimentation
– Improvisation
“Future leaders will be people who adapt
their jobs, working styles, and skills to
stay ahead of the curve as they see change
Dick Anderson – “Critical Skills for CAE
……the ability to
change to fit
CEO with his leadership
What will the organization
look like in 10 years?
The only things CEO was
certain of;
• different organization
• different industry
• different business
• A mindset
• A positive perspective on change
• An expectation that we have to continually adapt to take
advantage of the changing environment
• A willingness to take personal risks
– Experiment
– Improvise
“Take control of your career rather than feeling
you are being constantly whipsawed by
– Dick Anderson
Continuous Learning
Individuals must maintain personal relevance and
capabilities by innovating and investing in
How do I continue to distinguish and differentiate
What capabilities do I need to take advantage of new
ideas and trends?
Where and how do I get the training or education I need
Move away from just a CPE/Compliance mindset to one of continuous,
personal learning.
Continuous Learning
• Maintaining one’s personal and
professional relevance
• Requires personal commitment
• An enabler of “adaptability”
• More than just “continuing professional
Continuous Learning
• Recent examples;
– “Cloud” computing
– Social media applications
– Regulatory overload
– “Cybercrime”
– “XBRL”
– “Big data” / “Unstructured data”
• Not a new skill but has become even more
• Complexities of today’s world places a
premium on this skill- “Trusted Advisor”
• Critical for success as an auditor
– Critical issue recognition
– Risk prioritization
– What, and to whom to communicate
Judgment as a Process
Requires the development
and exercise of good
decision making skills
“…the judgment tendencies and shortcuts
that human beings often rely on can
short-circuit such a process and as a
results, our decisions can be biased.”
Judgment as a Process
COSO “Enhancing Board
Judgment as a Process
COSO “Enhancing Board
Common Threats to Good Judgment:
• Rush to Solve: select the first seemingly workable alternative
• Judgment Triggers: an initiating force that triggers a decision
• Overconfidence: leads to under investing in defining the problem,
considering too few alternatives or skipping information
• Confirmation: see and overweigh confirming information
• Anchoring: anchor on initial information without being able to
adjust away from that value
• Availability: limit alternatives or information to what readily
comes to mind
A Final Comment on
• Might be on the verge of another personal
attribute or a variation on the judgment
– You also have to be able or have the
courage to speak up and stand
behind the good judgments and
decisions you make
Talent and Diversity
• The ability to acquire and nurture a diverse
– A shifting mentality from diversity as “a
good social objective” to something that
is “necessary to conduct business”
• The continuing effects of demographics and
Talent and Diversity
Acquire and nurture talent and a diverse
• How to acquire talent?
• How to develop talented people?
• How to challenge and reward?
• How to build and operate diverse teams?
• How to retain a talented diverse
Related to diversity, but presents new challenges:
• Need to form and operate global teams that may
never actually meet in person
• Motivate people to accept international
• Recognize and reward staff for working outside
the home country
• Recognize and value nondomestic professional
and academic credentials
• Understand and manage cultural differences
What are the “skills”
that your stakeholders
A Strategic Player”
Rittenberg & Anderson
• Our attempt to look at CAE
skills through the eyes of the
• Focused on 6 key criteria
6 key criteria
• Stature and presence
• Understanding of the organization’s
• Strategic audit focus
• Ability to exercise sound judgment and
communicate clearly on audit issues
• Development of human resources
• Management of technical auditing activities
Some thoughts on managing
your career
Set long-term goals but manage your career
in “orbits¹”
• 2 – 5 year increments
• activities that enhance your skills and experiences
• prepares yourself to move to a “higher orbit”
Source: Dr. Alex McKenna, McKenna International
Some thoughts on managing
your career
Create your own opportunities – Fix a big
best way to
– Gain unique experiences
– Get noticed!
Some thoughts on managing
your career
Always understand the needs of an employer
or potential employer
avoid mis-alignment
match with your skills (this is why Dick
was never a capital markets trader!)
Some thoughts on managing
your career
Constantly challenge yourself;
“What am I bringing to the table?”
• How are you differentiated from your
• Look at your resume
– Facts vs qualitative attributes
• How do you interview?
Some thoughts on managing
your career
Understand the role and nature of
is very important to all of us, however;
it is not a long-term motivator
it is a dynamic not a static event
it can be a major reason why a new job
or opportunity does not work out
Some thoughts on managing
your career
A final rule in managing your career;
• Communicate
Communicate some more!
“While training and support for personal
development are expected from any good
employer, above all, personal development
is a shared, personal responsibility of each
individual to see to their own development.”
- Dick Anderson
So…………..Are you preparing
yourself to win the race?
Dick Anderson
[email protected]

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