Common audit challenges

I am a disseminator of audit wisdom. Think of me as a little bee, flitting from flower to flower, spreading delicate yellow pollen.

Wait!  If you have ever met me in person, that image doesn’t work!  No one has ever called me little unless it was in reference to my brain capacity.

Physically, I am more akin to John Belushi’s character on Saturday Night Live, the Killer Bee.  I smoke occasionally, am overweight, and have more than a little bit of attitude.

Since I have worked with just about every type and shape of audit team there is, I see that we auditors are more similar than different.   I have ended up acting as a cross-pollinator, taking the best practices of one audit shop to the next.

I’ve worked with all levels of government auditors and monitors, CPA firms big and small, Fortune 5 corporate internal audit shops, universities, the military and and and.

I am covered in pollen.  🙂

So what do I see as I flit from flower to flower?

If you could see what I see as I buzz around, you would say to yourself, “Oh! That looks familiar. We have an issue with that, too!”

Even though each audit team views itself as entirely unique and unlike anyone else, they struggle with the same audit challenges as the next flower… I mean audit team.

This is not to minimize the struggle (because the struggle is real), but instead to bond us together as a profession (hey! no one else wants to bond with us).

Here are a few of the common audit challenges that you are also likely dealing with:

Common audit challenges issue #1: A struggle with the risk assessment process

Anyone claiming to have a perfect risk assessment process if full of it… and I’m not talking about honey!

Big corporations have the resources to pay top consultants to develop a risk assessment process for them, and like a killer bee, I can always shoot holes in it.

These tricked-out tools don’t work in the field or even in the classroom.  The audit teams dutifully fill the tool out without knowing what they are doing or why.  Some tools are burdensomely detailed, while other’s vagueness causes audit teams to work themselves into a frenzy.

This is – without a doubt – the step of the audit that can have the most impact on the significance of your audit report.  But as a profession, we still don’t have it right.  But we can look to the AICPA for help as they have clear guidance for audit risk assessments.

Common audit challenges issue #2: The audit report gives us fits

That is to say, audit reports give auditors fits if they care about the audit report.  Some audit teams think the audit report is the least significant part of their work and pay the audit report little mind.

But internal auditors, who care more about their audit reports than CPA firms do, sometimes obsess over little things…. like the font.  They can spend as much time on the report as they do on the audit, passing it back and forth, tweaking and crafting it… often for only incremental improvements.

All auditors could benefit from the guidance regarding reporting offered in chapter 9 of the GAO’s Yellow Book.  Pay special attention to the concept of timeliness.

Common audit challenges issue #3: Cycle time is never short enough

Because CPA firms recognize that each project has the potential to generate a profit, these auditors move at an exponentially faster pace than government auditors.  Government auditors are the most likely to have broad audit objectives, which ultimately cause most long, drawn-out audits.

Regardless of bee type, audit leadership prefers their audit teams to complete projects faster because everyone’s resources are limited.

These leaders might look to the GAO who best describes the parameters of an audit project (objective, scope, and methodology) in chapter 8 of the Yellow Book.

Common audit challenges issue #4: True auditor independence is elusive

Internal auditors are employed by their audit victims and CPAs get hired and paid by theirs.  Some auditors actually report directly to their main audit video, the Chief Financial Officer, who squelches the audit results.

Of all auditors, legislative auditors have the best chance of being truly independent.  And staying out of politics will allow them to tell the truth without suffering painful consequences.

The GAO, who is the legislative auditor for the federal government, does the best job explaining the concept of independence in chapter 3 of the Yellow Book.

Common audit challenges issue #5: Leadership matters

Getting the technical aspects of an audit is hard enough.  But add to that a weak audit leader, and audit team members might just as well study for some sort of professional certification during worktime instead of working on an audit project, because conducting an audit is likely to be torturous and the resulting audit report will be missing some teeth.

But no degree of technical competence can overcome a leader who can’t or won’t articulate his or her expectations clearly or who refuses to get their hands dirty directing the team early and throughout the project.

Of all of the audit standards, the IIA standards best define the role of the audit executive.

What’s a poor bee to do with these common audit challenges?

To overcome these challenges, we auditors have to pick our heads up out of the day-to-day activity of making honey – excuse me – performing audits and make some changes.  Auditors often go years tolerating these challenges instead of acting to resolve them.

And auditors who have their nose to the grindstone are also not interacting with other auditors much.  New ideas and tools often do come from other auditors.

All professionals should have bee friends from other hives with whom they can share ideas, tools, and dilemmas.  But make sure you gather plenty of ideas, because some hot audit trends like ‘agile’ may not work for you and your team, so you’ll have to find other solutions.

When this virus lifts, I hope to see swarms of auditors attending conferences and sharing the latest tools to overcome these common audit challenges.

As John Belushi sang..Together we can make honey baby, the world has never seen.

Buzz, buzz! Baby.