Coronavirus (Covid-19) has escalated from a few isolated cases in a foreign country, to a global pandemic affecting all aspects of American life. There is much we don’t know about how this pandemic will change our lives in the financial services industry over the coming weeks and months. However, what we do know is that as Internal Auditors we need to adjust to these ever-changing circumstances. I want to share some timely advice to help position you and your team as an asset to your organization during this time of crisis.
Adjust Your Audit Plan
We have experienced major changes in our risk universe. So, the first thing you must do is adjust your audit plan to the new circumstances. Call an emergency meeting with your Supervisory Committee (via teleconference, of course) and get their perspective on the changing environment. Chances are, something that seemed very important during your planning in December just doesn’t seem critical anymore. You also need to think about areas of your credit union that will be affected and stressed the most during this time.
Frontline staff will be highly burdened during the pandemic. Not only are there concerns with social distancing, limiting hours, and closing down waiting rooms, but with the financial markets in a volatile state and many people losing work, branches may also be dealing with a lot of fear and uncertainty from members. Now is a good time to pivot away from extensive branch audits and audits affecting the staff dealing directly with the public. The FDIC and NCUA have even said they will both not be conducting in-person visits. They will be completing what work they can off-site.
Take some time for self-reflection. Look over your audit plan to see what you think your team can feasibly accomplish over the next few months. What audits could you complete without much contact with frontline staff? Is there any training you can complete online? Can you add value through consulting engagements?
Back to the Basics
When I face a crisis, I find it helpful to pause, take a deep breath, and think about the most fundamental aspect of whatever I am doing or whatever is troubling me. So, let’s do that together. Take a moment, breathe, and let’s get back to the basics of Internal Auditing. The International Professional Practices Framework (IPPF) from the IIA states that “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.”
In light of the pandemic, I am looking at this definition in a completely different way than I have before! Many times Internal Audit is considered as watchdogs, or the department that is always trying to catch someone or something wrong. (If you read this blog regularly, you know Olivia and I don’t believe these stereotypes, but we are very aware of them!) But now, what I find most crucial in that definition is that our goals as Internal Auditors are to “add value” and to “improve an organization’s operations”. So let’s take a look together at how we might be able to accomplish these goals in the current climate.
So What Should You Do Now?
A moment of uncertainty is a time to prove your true worth and added value. And the IIA has given us the freedom to fill many different roles. Internal Auditors have a unique perspective that can provide much needed objective insight into planning and addressing our current situation. So, consider whether your role and skill set would be suited to acting as a consultant to your Credit Union for a portion of your time during this pandemic.
If you are not currently included in conversations about business continuity and disaster recovery at your organization, then it is time to approach management. Hopefully, you have been consciously working to create a good relationship with the management team at your company. (If you haven’t, try implementing some of the strategies I outline in my article on creating better working relationships with management.) Now is the time to continue to build those relationships. Offer your thoughts on how to address risk management, control, and the governance process.
As Internal Auditors, we see many aspects of our companies’ operations. We also look at potential risks from an alternative perspective than management. This unique point of view can provide management with insight into potential scenarios they might not otherwise consider. If you haven’t already, reach out to see if you and your team can provide some independent objective consulting on how best to understand and address the full spectrum of immediate risks.
If you are looking for more ideas about how to help management during this pandemic, I recommend you read Richard Chambers, the president and CEO of the IIA’s, article addressing this issue. He lays out some key factors to consider when addressing the risks we are facing surrounding the coronavirus. I also suggest taking a look at the IIA’s bulletin titled Rethinking Preparedness: Pandemics & Cyber Security for a detailed glimpse into things to consider when assessing how adequately your Credit Union is prepared.
If you are new to conducting consulting engagements at your Credit Union, I want to provide you with an important reminder. You only have the authority to assess the situation and make appropriate suggestions for improvement. You do not have the authority to make and implement the final decisions. That responsibility lies with management. While it may be frustrating, it can also provide you some relief.
What Other Projects Should You Consider?
Now is also a great time to work on those projects that typically end up at the bottom of the pile. Do you need to research new external audit firms and get the RFP process started? Now is a great time to conduct that research and send a formal RFP. Have you updated your Internal Audit Charter, policies, and procedures within the last year? Take the time to review them and make the appropriate updates. Do you have a Quality Assurance and Improvement Program (QAIP) in place and have you completed your Quality Assurance Self-Assessment? If not, this is a great opportunity to work on those projects. These endeavors will not burden critical staff that is likely struggling to keep up with the current demands of the pandemic.
Remember To Be Kind!
This is a tense time for many people in our county and in the world. I’m sure you are feeling some of the pressure yourself. The most important suggestion I can give you today is to be kind to those you come in contact with. You never know if someone is dealing with a sick relative, financial pressures, or anxiety about our current events. As an auditor, people look to you for leadership. Please do your part to help and bring stability in a time of so much uncertainty.
Do you have any suggestions for projects to complete during the Covid-19 pandemic? What ideas do you have on how Internal Audit can help add value in light of our current situation? Leave a comment below!