Ruler

Valuing Internal Audit

The Audit Library was recently engaged in an interesting consulting engagement. We reviewed and rewrote all the job descriptions for the Internal Audit department of a Credit Union with almost $1.5 billion in assets. Once we received the original job descriptions, we realized there was nothing wrong with them. However, it was difficult for those without knowledge of Internal Audit to truly understand the value of each position. The Chief Audit Executive (CAE) who engaged us had been struggling to impress Internal Audit’s professional value upon the Human Resources department. 

All too often, this is the case in Internal Audit. We struggle to help others appreciate what we do. It is difficult to articulate to others how we add value to the organization, and it is often hard to fight for the appropriate compensation we deserve. 

So, Olivia and I rewrote each job description. We began with the intern position and worked our way up to the CAE. It was important that we show how each employee adds value to Internal Audit and the organization. We expanded on the hard and soft skills required for each position in order to give the reader a better understanding of the difficulty of the duties each position entails.

Once our client was satisfied, he submitted the job descriptions to the Human Resources department. In the end, all the positions, except for the intern, were upgraded to an exempt status. Each title was graded with a higher salary value, and the CAE got a raise! That went way beyond our best expectations for this engagement, and we were thrilled!

This scenario begs the following questions: 

Do others in your organization understand what Internal Audit does? 

Does your team understand how Internal Audit adds value to the company? 

Are Internal Auditors compensated for the work they do, and valued as professionals?

If you didn’t answer a resounding YES to each of those questions, then read on to gain an understanding of how you can help raise awareness, and in turn the value, of your Internal Audit department. 

How Internal Audit Adds Value 

It is easy to understand how most employees add value to the organization. Let’s take a financial institution. Tellers help customers on the front line, loan officers assess the risks and determine whether a loan should be approved, Accounting ensures financial accuracy and stability, and so on.

But what about Internal Audit? How does Internal Audit add value to an organization and why are Internal Auditors critical to the success of your organization? 

Internal Auditors add value by providing the assurance, insight, and objectivity that are essential to the organization. Additionally, Internal Audit suggests cost saving mechanisms, monitors for compliance to avoid costly fines, and makes recommendations for increased productivity. The mere presence of a well functioning Internal Audit department within an organization can help protect a company’s reputation. 

Now that we understand a little more about how Internal Audit adds value to your organization, it is time to help others understand.

Inside The Internal Audit Department

A great way to get your department on board is to ensure they fully understand their job duties. Review job descriptions for all Internal Audit positions. Make sure they are well written, and include information about how each employee is adding value to the department and the company. Check out the CAE, Senior, Staff, and Intern job description templates available in the library! Then, have each Internal Audit staff member review their job description, and answer any questions or concerns. 

Another way to make sure you and the other employees in your department understand how they add value to your organization is to provide them with articles to read, like this one! Once they better understand their importance, encourage them to include conversations about their non-confidential work with others in the organization. 

This is a grassroots effort to help your organization appreciate Internal Audit. If you can change the way Internal Audit looks at itself, then Internal Audit can improve the perceptions of others.  

Outside the Internal Audit Department

Now it is time to teach everyone in the organization about Internal Audit. This may seem daunting at first. Take it step by step and add information about Internal Audit to as many company-wide communication avenues as you can.  Include information about Internal Audit in your company’s internal newsletter or on your intranet page. Give a presentation about the importance of Internal Audit in a continuing education classes your company offers. Consider sending out a quarterly memo from your department.

Anything you can do to help all of the employees in your organization understand what you do and why it is important will help raise the value of Internal Audit. The Audit Library also offers presentations to organizations about the importance and value of Internal Audit. Contact us today to find out more!

Senior Management and the Board of Directors

Depending on your organization, explaining the value of Internal Audit to top-level management and the Board of Directors can be the most challenging part of this process. Preferably, the CAE reports administratively to the CEO, is included in meetings with senior management, and attends Board meetings. Whenever the CAE speaks at these meetings, it should be with the strategic intent to show the value of Internal Audit. 

One of the best ways to help show Senior Management and the Board of Directors the value of Internal Audit is by having an external firm perform a Quality Assurance Review (QAR). The final report will go to the CEO and the Board of Directors, and if your Internal Audit department is functioning well, the report will show those parties that Internal Audit is highly valuable. In our experience, once the Board of Directors has the QAR final report, they will typically mention it at a board meeting and hopefully tout how well the Internal Audit department is doing. 

We love hearing about companies with strong Internal Audit departments that are appropriately valued by their senior management and Board of Directors! Contact us today to talk about The Audit Library completing a QAR for your organization!

Join the Good Fight!

Knowing your value is extremely important in a profession that tends to be overlooked. You frequently have to fight for the respect you deserve. But it is worth it! A healthy, well respected, and appropriately compensated Internal Audit department is an essential part of your organization. Try the suggestions above and help your company understand your true value. 

Readers, I would love to hear from you!  Does your company value Internal Audit? Have you tried any of our ideas, or anything else that successfully showed others the value of Internal Audit? What suggestions are you going to implement for your department?

Let me know in the comments section below. I look forward to engaging with you and answering any further questions.

In the meantime, thank you so much for reading.  I hope that this post rings true to other auditors out there, and encourages you to show others your value!

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