Technical proficiency and analytical skills are always prized over soft skills in internal auditing

It’s become a truism that the ‘new normal’ as the world emerges from Covid-19 lockdown will not, and cannot, be like the old normal. But what does this mean for internal auditors? What skills will be most in demand and what can you do about it if you do not feel that you have enough of these at the moment?

As in other areas of the wider economy, many of the skills that are going up in value and demand (and those that are going down) reflect longer term trends that have been exacerbated by the crisis. A strong suite of technical auditing skills now puts more emphasis on so-called ‘soft’ skills and less on some traditionally prized abilities to sift and process information, although independent judgment, logical reasoning and analysis will always be important.

IT auditing is becoming an increasingly specialist preserve that is beyond the scope of most internal auditors, however many employers now expect all internal auditors to have a strong grasp of the basics of data analytics and of what analytics programmes can do for audits and assurance. This IT-savvy must go hand in hand with a wide imagination about the potential uses of the technology and how it can be employed more effectively.

What is new, however, is that ‘soft’ skills and IT experience are no longer nice-to-haves. Whereas a few months ago, there was a shortage of internal auditors in many sectors, now employers are likely to be able to pick and choose. The post-Covid landscape is likely to be bleak for many sectors and internal auditors will not be immune. There will be redundancies and people will need to look more broadly at their CVs, personal skills development and, possibly, at the options available to them in a wider range of sectors.

Russell Bunker, director at Barclay Simpson, says that the highest demand is currently for “experienced internal auditors operating at the delivery level”. Fewer organisations are hiring senior audit managers or trainees, he says. However, he added that a number of fixed-term or interim job opportunities are emerging and there are new jobs appearing as a consequence of an increase in co-sourced internal audit work. Some of these trends may be short-lived, of course, and may reflect temporary bans on permanent hiring.

So, what are the key skills internal auditors will need to thrive in the short and longer term?

1. Communication is key

Emotional intelligence may not have always been top of the list for internal auditors, but it’s hardly a new requirement. Internal auditors have to be great communicators – if you cannot talk to people – and, just as importantly, listen to them – you can neither learn from them nor persuade and influence them.

As computers take on ever more of the analysis side of auditing, we need humans who understand how people operate in real life, what makes them tick? Internal auditors need to pick up the nuances to spot when things may be wrong behind the scenes. They need to use the right language to relate to the people they need to get on their side or to persuade people to change the way things are done and to understand the need to better governance. And they need to be able to convey important messages simply and effectively. This is not always about being ‘nice’ – it’s about being effective. Some of these messages may be tough and they need to be understood and acted on.

It’s also about being able to demonstrate the behaviour that you preach. Actions really can speak louder than words.

2. Business acumen

This has always been important, but is becoming ever more so. Internal auditors see the whole of the business from the inside, but they also need to be able to look beyond it, and beyond their sector and region, if they are to appreciate emerging risks and the bigger picture. They need to understand what keeps their CEO awake at night – and, even more importantly, what should be keeping him or her awake at night.

Increasingly, they are being expected to know a lot about the potential impacts of everything from macro economics to climate change and the complexities of supply chains. Sourcing and reviewing the most up to date and reliable information is vital, but you also need the acumen to know how this could affect your business and to spot the risks and opportunities. Those who do not display this knowledge will not gain the respect internal audit needs from senior management to be effective. 

3. Flexible and agile

Speed is of the essence. How can you offer assurance more effectively, more rapidly and more effectively? This is the holy grail of internal audit and will become even more so in the post-Covid landscape. Technology can help, but it takes people to think about how they can use it better. Those with the imagination and the drive to improve, adapt and change will be most valuable to, and valued by, management. 

4. Personal relationships and networking

Use your personal relationships and find out what peers, colleagues, friends and family are doing. Be curious and ask questions. This is partly about being well-informed and partly about good communications. There are loads of ways to keep in touch so use them – from social media to Facetime to old-fashioned phone calls. You never know what may come in useful in future but the broader the net, the more you are likely to benefit. 

5. Proactive – use your imagination

Imagination and curiosity are now so important that they deserve a mention on their own. Again, they are not new skills for internal auditors, but they have never been more important. You don’t need a formal mentor to tell you to think about where you want your career or your audit team to be in six months’ time. But it can help to take some time out of your normal routine to practise thinking more imaginatively. Many things in the near future will need to change and someone will need to identify potential changes and the ways to achieve them.

Equally, imagination is an important part of effective communication.  What are your auditees doing and why? What are they going through? What do you want them to be doing in future – and how can you help them to get there? 

6. Sell, sell, sell

It’s been said that everyone is selling something – and if they say they’re not, they’re lying. Selling has a bad reputation in the UK. It’s seen as duplicitous and bad-mannered. However, sales skills are just as vital for good ends as for bad. Internal auditors are going to have to compete for attention even harder and many will have difficult messages to convey in the near future. If you want management, auditees and colleagues to listen to you and respond to your messages, you will need adequate sales skills.

And, if you’re in a sector that has been badly affected by the pandemic, you may need to brush up your CV and prepare to sell your own skills more aggressively. If you have what it takes to help organisations weather this crisis, don’t sell yourself short.

For more on leadership skills see the September 2020  issue of Audit & Risk - https://www.iia.org.uk/audit-risk-magazine/

The Chartered IIA runs a wide range of virtual and online training courses that can help you to develop crucial skills for an uncertain future - https://www.iia.org.uk/training-and-events/ 

Content reviewed: 8 April 2021

It goes without saying that as an Internal Auditor, your usual cycle is; Planning, Execution, Completion, Reporting, Repeat! Save for an investigation or management assurance provision exercise here and there, throw in an RCSA (Risk Control Self Assessment) Review, a Standards re-certification or surveillance audit or a trip out of town because...well...audit! But there's more to the job, and that more, is the soft skills required to connect with the human element of our organizations,

Let's dive right into it! To borrow from the SC&H Group, some of the soft skills required for us to effectively carry out internal audits are:

Communication

This could be by word of mouth or by written reports of sorts. There is always some unexcepted news to deliver to your client at some point, either that, or you're dealing with management disagreeing with your report. It is important in these moments that you understand your audience and specifically use verbal or written communication styles that suit them and derive the desired effect. Sometimes, take a keen interest in researching your clients' work area and what exactly makes them tick, this will give you insight into what speaks to them and may be a good place to start in building a solid connection.

Verbal

Communication, particularly by word of mouth is inevitable as you go through an audit. Kick off meetings, walkthroughs, fieldwork/testing, closing meetings are places where you'll find yourself speaking, a lot! It may sometimes be daunting; the experience of having to present your list of findings in your closing meeting at the tail end of the audit to all these executives in management that really only understand the issues raised at a high-level, and this could in some instances insight some negatives remarks. As a professional internal auditor, you have the responsibility to present your findings in an objective, non-discriminatory manner, and that demands a deep understanding of the business at hand and the processes therein. The point you may be driving across at this stage, may be easily cushioned by zeroing in on the solution and recommendation rather than the issue raised.

Written

Documented communication may take many forms: E-mails, lists of requirements, workpapers, reports, visualizations, dashboards, and so on. You can avoid pushback when working on an audit by presenting information in the most factual, concise and plain manner possible. Never drop the ball on communicating with your client as the audit progresses. Exceptions that pop up should be appropriately classified, discussed, validated and documented. It is cardinal to avoid vague terms such as “sometimes”, “many”, “a few”, “may”, and “must” because these raise questions as to the ambiguity of the analysis. On the flipside, however, I will let you know, having spent time in a big 4 firm, that using terms such as 'all', 'absolute', 'definitely', 'total', or 'everything' is just as much of a red flag. Instead, provide specific quantitative information which gives management a clear understanding of the findings and the nature of the observation I.e numeric statistics, graphs that show a pictorial representation of trends and dynamic visualizations based on a set of data that varies based on input.

Relationship Building

When you walk through the door, as an auditor, the first things you say or do could either make or break your relationship with your client. Further, every touch point during the audit is a chance to cement trust, credibility, and to build a relationship. This journey begins on day one o the audit.

Respect for clients as subject matter experts

As an Internal auditor, remember; you are an auditor! The client, is an expert in their field of operations. While auditors are not expected to be experts of every industry, we are expected to be process and risk experts. If your client believes that auditors are asking repetitive questions or are not listening or understanding information provided quickly, patience may begin to wear thin and the auditor may lose credibility. As a risk management expert, it is the auditor’s responsibility to pair his/her knowledge of risk management with the client’s expertise in the process area under review to provide meaningful insights. To build a strong relationship, it is important that auditors understand not to overstep the boundary of expertise that clients have established through their careers.

Honest and transparent lines of communication

Auditors should be humble, demonstrate respect, listen, and work to establish relationships with their clients. As an auditor, you run thr risk of not being able to receive candid, open, honest, detailed information that will help improve the effectiveness of the audit when you downplay the meaningfulness of relationships that can be formed with your client. Additionally, internal auditors want to be viewed as a trusted resource beyond a specific project or audit. Once a relationship is established, the likelihood that internal audit is proactively contacted when challenges present themselves, is improved. If you work in operations, your key input into this relationship building process, is understanding the auditor’s role as a risk management expert and the your role as the expert in the process under review.

Continuous Learning

The classification of audits, Standards, Policies, Standard Operating Procedures, risks, controls, laws/regulations, and clients that internal auditors will review/support throughout their career vary. As a result, auditors should embrace a continuous learning mindset. This goes beyond just researching your client's processes and understanding what they do based on the audit process; this etches into achieving word-renowned certifications such as CIA (Certified Internal Auditor) offered by the Institute of Internal Auditors (IIA), CISA (Certified Information Systems Auditor) offered by the Information Systems Audit and Control Association (ISACA) or CFE (Certified Fraud Examiner) offered by the Association of Certified Fraud Examiners (ACFE), among many others that suit your career path.

Adaptability while using both soft and technical skills

Internal auditors must be able to adapt and learn various processes quickly, knowing when to leverage soft and technical skills to navigate projects. An effective internal auditor should be well rounded and learn to apply these skills in any subject area. This however is not easily learnt, we must be able to dig into soft skill training sessions and technical training sessions, at a balance.

Healthy Skepticism

Ideal personality traits for an auditor include natural curiosity and inquisitiveness. Successful auditors have a healthy skepticism and are able to dig beyond basic, surface level answers, showing a desire to truly understand the business environment. This feeds into the value we are then able to provide.

Non-technical Trainings

While it is important for internal auditors to have adequate technical training, it is also important for auditors to focus on non-technical trainings that address soft skill topics, such as leadership or emotional intelligence (EQ) in the workplace training. These non-technical trainings will provide an auditor a skill that compliments his/her technical skills.

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