All Federal Statutory Bodies are now required to set up internal audit units.
Based on the Guidelines on the Management and Governance of Federal Statutory Bodies, these internal audit units must evaluate and improve effectiveness in risk management, conduct internal controls and recommend improvements to an agency's management, among other things.
There will be a search for good internal auditors. It is worthwhile considering some of the attributes of a good internal auditor.
Due to the pivotal roles that internal auditors play, there is a need for these qualities and attributes to be more pronounced in them. Good is not enough. Excellence should be the order of the day.
Internal auditors play a crucial role in ensuring that organisations operate efficiently, comply with regulations, and achieve their objectives. The effectiveness of an internal audit function hinges significantly on the qualities and attributes of the internal auditor.
Integrity and Ethical Standards
Integrity is the cornerstone of any internal auditor's role. An internal auditor must uphold the highest ethical standards to maintain trust and credibility. A good internal auditor demonstrates honesty, fairness, and impartiality in their work. They must be committed to doing the right thing, even when it is difficult or unpopular. Ethical dilemmas are common in the profession, and auditors must be able to navigate these challenges with integrity, ensuring their assessments are unbiased and accurate.
Warren Buffett famously stated, "Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don't have the first, the other two will kill you. You think about it, it's true. If you hire somebody without integrity, you really want them to be dumb and lazy."
Objectivity and Independence
Objectivity is essential for an internal auditor to provide impartial and reliable insights. They should maintain independence from the activities they audit, avoiding any conflicts of interest that could compromise their judgment. This independence allows them to provide an unbiased assessment of the organisation's processes and controls.
Effective internal auditors avoid personal biases and focus purely on the facts, enabling them to deliver credible evaluations that can withstand scrutiny.
Analytical and Critical Thinking Skills
Strong analytical and critical thinking skills are indispensable for internal auditors. They must be able to dissect complex processes, identify risks, and evaluate controls effectively. This requires the ability to scrutinise details while also understanding the broader context. Critical thinking allows auditors to question assumptions, identify patterns, and draw logical conclusions from their analysis. A good internal auditor can synthesise information from various sources, assess its relevance, and use it to make informed recommendations. Internal auditors provide assurance on controls, risk, and governance. They are expected to be experts in these three, which are embedded in the definition of internal auditing.
Communication Skills
Effective communication is vital for internal auditors. They must be able to convey their findings and recommendations clearly and concisely to various stakeholders, including management and the board of directors. This includes both written and verbal communication. A good internal auditor tailors their communication style to suit the audience, ensuring that complex issues are explained in an understandable manner. Moreover, auditors often need to ask probing questions and gather information from diverse sources, which requires strong interpersonal skills and the ability to listen actively.
The audit ends when the message is effectively communicated, not when the audit report comes out. Directors expect concise, relevant, well-articulated verbal presentations of key audit findings.
Technological Proficiency
In today's digital age, technological proficiency is increasingly important for internal auditors. They need to be comfortable using audit software, data analytics tools, and other technology to enhance the efficiency and effectiveness of their audits. A good auditor understands how to leverage technology to analyse large volumes of data, identify trends, and uncover anomalies that could indicate potential risks. Additionally, they should stay informed about new technologies that could impact the organisation, such as cybersecurity threats or emerging financial technologies.
Adaptability and Continuous Learning
The business environment is constantly evolving, and so too must internal auditors. Adaptability is crucial as auditors encounter new challenges, such as changes in regulations, shifts in business models, or advancements in technology. A good internal auditor is committed to continuous learning, seeking out opportunities for professional development and staying informed about changes in the field. This adaptability ensures that they can effectively address emerging risks and provide relevant, up-to-date advice.
Teamwork and Collaboration
While internal auditors often work independently, they must also collaborate effectively with others. Auditing can involve working with different departments, management, and external auditors. A good internal auditor is a team player who can build strong relationships across the organization. They understand the importance of collaboration in achieving audit objectives and are skilled at working with others to gather information, share insights, and implement recommendations.