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This week’s video is about some myths and misconceptions related to risk-based internal auditing that are hurting our profession. Instead of being stuck down in the weeds, we need to be more aligned with management at the strategic level.
If you missed the first webinar I did on this topic, you can listen to it through the cRisk Academy on-demand platform here: https://ondemand.criskacademy.com/p/establishing-or-improving-a-risk-based-audit-approach/
I have a follow up deeper dive Q&A session on risk-based internal auditing scheduled on the topic on Thursday, October 31, 2019 · 9:00 AM PDT. Here’s the link to register for the FREE webinar: https://www.bigmarker.com/crisk-academy/Deeper-Dive-Risk-Based-Audit-Approach-with-Questions-and-Answers-Q-A
To go even deeper and get the step-by-step process, check out the new and updated course on risk-based internal auditing. You can also receive your Certified Risk-Based Internal Auditor (cRBIA) professional designation when you complete the course and pass the exam: https://ondemand.criskacademy.com/p/certified-risk-based-internal-auditor-crbia/
If you register for the cRBIA course before 30 November 2019, You can also save 60%.
More to come on risk-based internal auditing. Stay tuned 🙂
Transcript
00:00
welcome to another edition of the chief
00:02
audit executive briefing hey in this
00:05
week I wanted to follow up again and
00:07
talk a little bit more about risk based
00:09
internal auditing and you’re gonna hear
00:12
me talk a lot about this and again some
00:15
of you may be wondering why are you even
00:16
talking about this this is kind of old
00:18
news we understand it the reason I’m
00:21
talking about it is I think there’s a
00:23
lot of misconceptions and myths about it
00:26
and in fact when I’m actually looking at
00:29
working with other chief audit
00:31
executives working with internal audit
00:34
teams and I dig a little bit deeper I
00:37
find out that they’re not actually doing
00:39
risk based auditing now here’s some of
00:44
the problems around that and these are
00:46
some things that we’re seeing in the
00:48
industry in general and and when I
00:51
explain these you’ll see why I’m talking
00:54
more about risk-based internal auditing
00:57
because here’s the reality you know I
00:59
teach lots of people on the CI a I have
01:02
a CIA review course that helps people to
01:06
be able to prepare and pass the exam so
01:09
they can get certified and I’ve got to
01:11
tell you honestly the information in the
01:14
material and the information about risk
01:16
based audit that is on the CI a exam in
01:20
my opinion is actually wrong okay but I
01:24
have to actually teach that to help
01:26
people pass the exam so what I’m doing
01:29
now is through different means I’m
01:31
actually teaching you what it actually
01:34
means and again because I think there’s
01:37
a lot of myths and misconceptions around
01:39
that now to talk about why I’m talking
01:44
about this let’s talk about some of the
01:47
challenges that we have currently in our
01:49
profession we see that internal audit
01:52
continues to be stuck down in the weeds
01:55
we’re down at low levels in the
01:57
organization we’re doing good audit work
01:59
but for the executive management team
02:02
they’re thinking why are you focusing on
02:03
those little things way down in the
02:05
organization
02:06
and we continue to get stuck there and
02:08
part of the reason is we’re not using a
02:11
true risk-based
02:12
and that’s why we’re so far down now
02:15
we’re also seeing that management is
02:17
believing that internal audit is not
02:19
adding as much value and some of you may
02:22
say what your that doesn’t sound right
02:24
well from lots of different surveys that
02:26
have been done executive management has
02:30
a much lower view of internal audit much
02:34
much less believing that we’re adding
02:37
significant value than what we believe I
02:40
mean it’s usually about 40% lower than
02:43
what we think
02:44
which means there’s something going on
02:46
there they’re not seeing that we’re
02:48
adding as much value as we believe we
02:51
are and that’s an issue that we have to
02:53
address now what we’re seeing from that
02:57
is a lot of internal audit groups are
03:00
becoming obsolete or getting downgraded
03:03
so what does that mean well if executive
03:06
management does not believe that you’re
03:08
adding value the way they need the value
03:11
they’re gonna start new departments that
03:14
do a lot of the work that internal audit
03:16
used to do or what they’ll do is cut
03:19
back on the internal audit resources and
03:23
so we’ve seen this in a lot of different
03:25
positions where the chief audit
03:27
executive used to be maybe a senior vice
03:29
president or a vice president and those
03:32
positions after the person leaves when
03:36
they’re being refilled you see those
03:38
actually downgraded so instead of hiring
03:41
a vice president level as a chief on an
03:44
executive the next go-around
03:46
it’s a director level position less
03:49
money less exposure in the organization
03:53
reporting lower and lower in the
03:55
organization and again as I said we’re
03:58
seeing this quite a bit throughout the
04:00
organ and it’s a challenge that we
04:04
really have to address and one of the
04:07
ways that we can do that is through
04:09
doing more truly risk-based auditing
04:12
because when you do that you align much
04:15
more with management with the key
04:17
objectives of the organization that they
04:19
are dealing with at a much higher
04:22
strategic kind of level instead of
04:25
getting stuck
04:25
down in the weeds now when we do that
04:28
and when we are actually able to
04:31
increase and improve our soft skills
04:34
along with our technical skills we can
04:37
actually start to be seen as a trusted
04:39
adviser in the organization because what
04:43
we’re doing is more again risk-based
04:46
focused on the key objectives and we’re
04:49
moving away from the traditional
04:51
historical auditing into something that
04:54
is much more proactive
04:56
which is exactly what management needs
04:59
okay
05:00
so again that’s why you’re going to be
05:02
hearing me talk a lot more about risk
05:05
based internal auditing there’ll be more
05:07
webinars more things on the podcast
05:09
about this because again it’s an area
05:12
that I really feel passionate about and
05:14
I think that the old traditional
05:16
internal audit model that a lot of
05:19
people continue to use and that
05:21
continues to be perp perpetrator or
05:23
perpetrators propelled forward by some
05:28
of the professional service firms and
05:30
other organizations is actually hurting
05:33
the profession and we need to wake up
05:35
and actually do things a little
05:37
different so that’s why I’m talking more
05:40
about this you’re gonna see more about
05:42
it and I’ve included some links down
05:44
below if you want to go in a little bit
05:47
deeper to learn more about what I’m
05:49
talking about in more depth because
05:52
again in just a couple minutes video I
05:54
can’t really give you everything that
05:56
I’m thinking about
05:57
so with that go out have a great week
06:00
and hope to see on some of the things
06:04
that are coming up around risk based
06:06
internal auditing we’ll see you later
