Dreading your next internal audit? You’re not alone. Apprehension around audits is a fairly normal feeling, particularly in highly regulated industries such as automotive and consumer finance, and especially when employees’ jobs could be on the line.
But consider the fact that an audit can impact your team’s quality of life in positive ways, too. Fair and balanced reporting, writes Norman Marks for Internal Auditor, assesses individual performance issues as well as organizational shortcomings. It’s about finding opportunities to grow and get better, and not necessarily laying the blame at someone’s feet.
Marks illustrates his point through a hypothetical internal audit that discovers that a company’s financial reports are usually delayed for weeks, exposing the organization to significant risk. Is the financial team’s manager at fault? Take a look:
“In response to our questions, the team leader says that the manager of the area seems swamped with work and highly stressed. He is frequently still at the office when the team leaves at 7pm, and is always there when they arrive at 7:30am. The accounting staff also seems stressed, although their work days are only, on average, 10 hours long.
Everybody seems capable and concerned about the delays in performing the reviews and reconciliations, but they say they are so busy they can’t get to them promptly. They are fighting fires with customer billing, disputes over delayed payments to vendors, and so on.
Should this affect the audit assessment? Perhaps not. But there is more we need to know.
Additional inquiry helps us learn that the accounting staff has had three open positions for several months. The manager tells us that he has been unable to hire replacement staff because the HR department has established pay ranges for the positions he needs to fill that are substantially below market levels. In addition, his manager won’t let him hire temporary staff because there’s ‘no money for it in the budget.’
Should this affect the audit assessment?
We are starting to discern the reason the critical controls are not being performed. It’s not the manager’s fault that he doesn’t have the resources to get the job done. Is it fair to issue an audit report that leads management to blame him, counsel him, and cut or eliminate his bonus?
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