Internal Auditors Moving Into “Trusted Advisor” Roles
An increasing number of internal auditors are using their deep knowledge of their organization’s inner workings to provide valuable counsel to those at the top. Increasingly, they are becoming “trusted advisors” to the C-suite, aiding them in making more informed decisions that can help define their outfit’s overall strategy.
The internal auditor’s traditional role has revolved around reviewing financial records and pointing out risks and liabilities. This part they play is an important one, but is often an underappreciated — and sometimes even an unwelcome — one.
Today, however, for many auditors, their role is expanding. Let’s take a look at exactly how this change is occurring and what it means for the profession.
An Evolving Role
The work of internal auditors provides them with deep insight into their employers’ activities. They can leverage this to grow beyond the provision of assurance services to advise on activities that can add value to their organization’s governance, risk management and internal controls.
However, becoming a trusted advisor, one on which the C-suite relies to help them make the decisions that steer the company, takes time. Such trust is something Sheila Ujoodha, CEO at MIOD and Chairperson of the Audit Committee Forum, says must be nurtured.
Becoming a trusted advisor happens in stages, Ujoodha points out, first by the auditor’s expertise being used to provide valuable insights into general business issues: IT concepts, business continuity plans, project management or process efficiencies. As the relationship matures, however, the internal auditor’s proficiency at problem-solving has them leveraged for broader strategic issues and advising more proactively on best practices that improve delivery, budget and quality.
Earning trust also requires internal auditors to possess certain hard and soft skills. In his book, Trusted Advisors: Key Attributes of Outstanding Internal Auditors, Richard Chambers lists nine attributes possessed by internal auditors who are seen as trusted advisors by stakeholders:
- Personal attributes:
- Ethically resilient
- Intellectually curious
- Relational attributes:
- Dynamic communicators
- Insightful relationships
- Inspirational leaders
- Professional attributes:
- Critical thinking
- Technical expertise
Finding the Right Fit
Internal auditors must find the ideal mix of assurance and advisory services. Paying close attention to the organization’s needs and equipping themselves with the right data will go a long way to helping them move into more of an advisory role.
Also consider that relationship building will in most cases be required for internal auditors to move into a more strategic advisory role. Some colleagues may not initially know that the audit department can bring additional value to the organization.
The pandemic has brought to the surface the question of what an internal auditor’s optimal mix of assurance and advisory work should be, and whether it’s time for a rebalancing. Many have taken on more advisory work, having the technical skills needed and organizational insights to help their organizations better navigate the crisis.
Both the individual auditor and the organization itself must decide what allocation between advisory services and core responsibilities works best for each other. Expect that some experimentation and adjustments may be necessary to reach the ideal mix.
How Technology Can Help
The detailed organizational insights internal auditors can provide are key to their role as trusted advisors. Powerful data analytics, like those provided by CaseWare IDEA, strengthen auditors’ ability to identify trends and patterns that lead to more informed business decisions.
Designed by audit experts, IDEA Data Analysis Software helps audit teams deliver more value by prioritizing areas of heightened risk, analyzing every transaction, identifying suspicious behaviour, and delivering better audit coverage and assurance. Armed with the insights it can provide around improving operational efficiency and compliance, audit teams can take an important step in enhancing their internal reputation and becoming trusted advisors.
Learn more about what IDEA can bring to your organization.