Intro Video Transcript

Welcome, everyone, in on today's session. Today, we're going to be speaking about Top Skills for Internal Audit Management. You may be a new Audit Manager, possibly a new Audit Director, or even a Vice President of Audit, or Chief Audit Executive, as it's sometimes referred to. And we're going to discuss a little bit about the various skills and the challenges within this role and how you can approach those.

I am a past Chief Audit Executive. My name is Lynn Fountain. I am a subject matter expert in areas of Sarbanes-Oxley, Internal Audit, Enterprise Risk Management, fraud, risk and compliance types of issues, and I have over 30 years of experience in those roles. I have been a Chief Audit Executive for two separate internationally-held companies. So I have some good experience, both on the challenge side, as well as on the success side. And I want to share with you those experiences and maybe some of my insight into regards to how to maneuver and walk through those challenges and hopefully come out at the most successful area.

You can see my contact information at the bottom of the screen, as well as my website. After you've viewed this webinar, I encourage you to reach out. Let me know what you thought. If you have any questions, I'm always happy to speak to people further about what their challenges are and brainstorm about what can be done.

With that, I'm going to introduce just a little bit more about what we're going to be speaking about within this topic. And then there will be a series of topics that's really designed for internal audit management. Today's Chief Audit Executive role... You see I have CAE there. That's how I'll refer to it sometimes. But even not just Chief Audit Executive, but if you're an audit director or if you're an audit manager, it's very difficult. The dynamics of today's business continues to evolve. We have ongoing regulations and legislations. Our shareholders are expecting more. Our stakeholders and board members are expecting more. We're seeing an increase in instances of fraud in the workplace and then disclosures for financial statement purposes. There's also just many more issues that come up.

In today's internal audit world, it's much more than just a compliance view or a check and balance-type function, as we may have seen it in years prior to Sarbanes-Oxley. The role of Internal Audit Management continues to evolve also, as our businesses evolve. But what hasn't probably caught up to the plate yet is although the Institute of Internal Auditors does a great job of putting standards out there for internal auditors to follow, sometimes management isn't fully aware of what those standards are and what they mean to the internal audit function. So we're going to address that a little bit as we go through our challenges or our skill sets today and talk about how we can utilize the Professional Practices Framework to actually synergize and then enhance our processes within an internal audit.

As I said, audit management is an integral role for any company these days, and hopefully companies are starting to recognize that and are allowing internal audit management more into the seat at the table, sometimes I'll say. But management has to embrace that role, and they have to look at auditors more than just the back end check and balances. And the tough part is how do you get that done? And if you're in an organization that has had a function for quite a while and the function has stayed fairly static, sometimes the evolution to change is difficult. So those are some of those things we're going to talk about.

Now, what I want to point out here - and I've seen this phrase in other places - but this is really an evolution. It's not a revolution. We're not out there as internal audit management trying to change companies, but we're trying to enhance our role as professionals and allow management to see that we're partners with them and that we, indeed, want what is best for the company and best for our shareholders overall.

IA Management, though, has not always been one of those areas of strategic importance. When it was originally put together years and years ago, if you really research the concepts of internal controls, you'll notice that it goes way back to Egyptian times, when you had the tax collector who collected the money and then someone else counted the money. But as it's evolved, it got very much into -in the 80s and 90s, we were very much a check and balance function. Lots of times, it was on the operational side because they allowed the "external monitors" to really look at the financial statements.

And in those cases, if you are in an older generation, you probably know that we had a lot of audit work programs and standard audit work programs that we would go by. And then once we got into the 2000s and the Institute of Internal Auditors started updating their standards, we started going more towards risk-based auditing in trying to get that "seat at the table" for an internal audit management to be able to be of true value to the organization and not just the monitoring and the check and balance function.

Now, Sarbanes-Oxley itself, the legislation really opened the eyes of the investment community to the importance of things, like internal control and internal auditors. If you go back and look and Google back in 2000 when that first came out, there's topics that'll say, "Internal auditors are now rock stars." Well, I'm not sure that's the exact instance, but the point was it was a lot more focus on what internal auditors could really bring to the table. However, we still have a long way to go. Management sometimes still sees internal audit as lagging in priority, in regards to areas that should be "having that seat at the table" or integral to companies' strategy. And that's where audit management needs to step up to the table. And to be able to do that, you have to gain some of the buy-in and understanding and confidence of management in various ways.

I'm going to give you a little bit of a real world view and to some of the challenges we face, and I'll talk a little bit about my experiences. But it's not just my experiences that these series is going to bring to bear. I have the opportunity to train a lot of internal auditors. I do training for the Institute of Internal Auditors. I've written some books. I do a lot of trainings for other conference groups. So I'm out there quite a bit and talking to internal auditors about the challenges that they are facing. So this is to bring that to bear too, and I'm bringing forth those ideas to help you understand what some of your challenges may be.

There's an old saying that says, "If you can't stand the heat, stay out of the kitchen." And I used to laugh when I was the Chief Auditing Executive and say, "Sometimes that kitchen got really hot." But if you are not a person that can manage that type of atmosphere, who can take the criticism, who can stand up for what you believe, and stick up for your priorities, maybe the role of internal audit management is not one for you. But we're going to talk about those various things, and you can evaluate that as we go through.

So here's our agenda for today. We're going to talk about some of the top key and critical skills for Internal Audit Management, which includes both technical skills, as well as soft skills. And I will say that soft skills often are those that come with the bearing of time or as you have matured through an organization or through a business. We'll also talk a little bit about the variance between the ethical and legal standards and how that causes issues for Internal Audit. And then we'll discuss a little bit about how you can prepare to transition into the role or even if you're already in the role, if there's some things that you feel you need to change or enhance, how that can be done. So that's our agenda for today.