A Consultative Approach to Auditing Rachael Moyer

Report
A Consultative
Approach to Auditing
Presented by:
Rachael Moyer
Business Consulting Solutions
Objectives
 Internal
 IIA
Audit vs. Consulting
Standards for Consulting
 Why
Internal Auditors as
Consultants
 Consulting
Skills for Internal Auditors
Only 45% of 1,800 audit committee
members surveyed are satisfied
that their company’s Internal Audit
function delivers value.
Who are the internal
customers?
IA Customers
Audit
Committee
Auditee
Senior Management
External Auditors
Regulators
Internal Audit vs. Consulting
Internal Audit
Focused on historical
data
Results in an audit
report
Initiated by CAE
Results provided to
Audit Committee
Consulting
Focused on future
activity
Results in
recommendations for
implementation
Initiated by business
manager
Results provided to
requestor
IIA Standards & Definitions
“Internal auditing is an independent, objective
assurance and consulting activity designed to
add value and improve an organization's
operations. It helps an organization
accomplish its objectives by bringing a
systematic, disciplined approach to evaluate
and improve the effectiveness of risk
management, control, and governance
processes.”
IIA Standards for Consulting
 1000.C1-
The nature of consulting
services must be defined in the
internal audit charter.
 1130.C1
– Internal auditors may
provide consulting services relating
to operations for which they had
previous responsibilities.
 1130.C2
IIA Standards for Consulting
1210.C1 – The chief audit executive
must decline the consulting
engagement or obtain competent
advice and assistance if the
internal auditors lack the
knowledge, skills, or other
competencies needed to perform
all or part of the engagement.
 1220.C1 – Internal auditors must
exercise due professional care
during a consulting engagement.

IIA Standards for Consulting
1220.C1
1220.A1
Relative complexity and
extent of work
Relative complexity and
extent of work
Cost/Benefit
Cost/Benefit
Needs and expectation
of the client
Adequacy/Effectiveness
Probability of significant
errors
IIA Standards for Consulting

2010.C1 – The chief audit executive
should consider accepting
proposed consulting engagements
based on the engagement’s
potential to improve management
of risks, add value, and improve the
organization’s operations.
Accepted engagements must be
included in the plan.
IIA Standards for Consulting

2120.C1

2120.C2

2120.C3 – When assisting management
in establishing or improving risk
management processes, internal
auditors must refrain from assuming any
management responsibility by actually
managing risks.
IIA Standards for Consulting

2130.C1 – Internal auditors must incorporate
knowledge of controls gained from
consulting engagements into evaluation of
the organization’s control processes.

2201.C1

2210.C1

2210.C2

2220.C1

2220.C2 – During consulting engagements,
internal auditors must address controls
consistent with the engagement’s objectives
and be alert to significant control issues.
IIA Standards for Consulting

2240.C1

2330.C1

2410.C1

2440.C1

2440.C2 – During consulting
engagements, governance, risk
management, and control issues may be
identified. Whenever these issues are
significant to the organization, they must
be communicated to senior
management and the board.

2500.C1
Objectives
 Internal
 IIA
Audit vs. Consulting
Standards for Consulting
 Why
Internal Auditors as
Consultants
 Consulting
Skills for Internal Auditors
Why Internal Auditors as
Consultants
 56%
saw the audit as a routine
chore that varied little from year
to year.
 Just
over 60% of the companies
said their auditor did not raise
any issues or ideas that were
used in their business to enhance
their processes or decisions.
Why Internal Auditors as
Consultants
We know COSO. We know SOX. We’ve
performed that same accounts payable
audit the same way 3 years in a row with no
major audit findings to date. It’s time to infuse
our IA department with creativity and ask
ourselves, what more can we be doing for
our internal customer? How can we perform
this audit differently to add greater value?
What Are The Risks?
 Risk
of Political Exposure
 Project
Failure
 Management
 Conflict
Expectations
of Interest
 Maintaining
Independence
and Objectivity
 Consulting
Assignment
Consulting Skills for Auditors
 Include
consulting services in
annual audit plan/budget
 Define
and communicate
scope early and often
 Gain
client buy-in
 Don’t
be afraid to say no
Consulting Skills for Auditors
 Identify
areas
process improvement
RVA
– Real Value Added
BVA
– Business Value Added
NVA
– Non-Value Added
6 Tips for a Consultative Approach
to Audit
 Strive
to understand the
business on a deeper level
 Align
of risk
resources to critical areas
 Develop
in-house expertise
 Build
trust through relationships
 Offer
something extra
 Speak
business, not audit
Now It’s Your Turn…

Does your internal audit department offer
consulting services?

What concerns/questions do you have
that this presentation did not address?

What advice can you offer to the person
sitting next to you about internal audit
and/or consulting?

What is one thing you learned from
today’s presentation or networking?
Contact Information
[email protected]
512.843.2318
Thank You

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