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Earn while you learn: the value of internal audit apprenticeships A&R magazine Jul Aug 23

 

Where do good internal auditors come from? Increasingly, the answer is “everywhere” – all parts of the business and at different stages in their careers. As the scope of organisations’ assurance requirements widens, and requests for other forms of input and management support increase, internal audit teams must draw on a variety of experiences and expertise. A diverse mix of internal auditors has never been more important.

At the same time, there is a skills shortage. The jobs market has been tight since the pandemic and skills needs are evolving. Increasingly, internal audit teams must compete with other functions within their own organisation, as well as within the profession, to attract the best people – and many cannot afford the top salaries.

These factors make apprenticeships an attractive option. The apprenticeship levy means that all organisations with an annual wage bill of over £3 million already pay 0.5 per cent of their total wage bill into a fund for apprenticeships. This money reverts to the government if it is not used. Furthermore, organisations that do not qualify for the levy can claim “co-investment” funding, so they pay only five per cent of apprenticeship course costs.

By “growing their own” internal audit talent, chief audit executives (CAEs) can search a wider pool, knowing that recruits will get a thorough grounding in internal audit theory and practical skills. Trainees learn on the job, so contribute to the team from the moment they join. Aptitude and attitude are more important than experience and professional skills. 

A fresh view

The benefits do not stop there. Those who have been involved in running apprenticeship schemes have noted other advantages. Enthusiastic recruits from a wider variety of backgrounds ask questions that would not occur to experienced internal auditors, and these can inspire ideas and change.

“Apprentices bring a fresh pair of eyes, which is phenomenally interesting,” says Liz Sandwith, Professional Practices Advisor at the Chartered IIA, who is one of the trainers for the IIA Certificate, part of the level 4 internal audit apprenticeship. “Many of those I tutor are young, bright, switched on – but have no idea about business. This means they ask all the questions that practising internal auditors will think are obvious. For example, they may say “why does an organisation need a strategy?” and then we can discuss the alternatives. It makes me think again about how and why we do things.”

Not all apprentices are straight from college. Increasing numbers are starting later in their careers and this introduces another dynamic to group learning (and to the teams they join), which also sparks thought-provoking discussions.

“It’s good when apprentices challenge me and tell me what they do in their organisations. We can then discuss alternatives and the reasons why some approaches work better in different circumstances,” Sandwith continues. “It’s essential that they all know our Standards and Code of Ethics, but it’s also important that they understand how to challenge politely and constructively, since this is part of the job.”

The growth in internal audit apprenticeships is indicative not only of their success, but also of shifts in the skills marketplace and the profession. Sandwith admits that once she would have said that internal audit was not a profession for school-leavers. Now, she believes she was wrong. “I thought they would lack empathy with managers and would not understand how people and businesses work, but this isn’t true,” she says. “Furthermore, apprentices are often open-minded and enthusiastic about opportunities to use technology and change how we do things and these qualities will be essential for the profession in the future.”

“Apprenticeships are a great opportunity for the internal audit profession to attract people with different ideas,” agrees Marian Silltow, another Chartered IIA Certificate trainer. “We get a real mix of people from those in large organisations’ apprenticeship programmes to people in compliance who realised their team would benefit from a better understanding of the wider controls environment. It’s a great opportunity to get more people fully trained to IIA Standards so they understand better what internal audit does.”

She notes that more sectors are seeing the advantage of apprentices. Whereas most used to come from the large financial services firms, she is seeing people from the NHS, the police and other public-sector bodies and from medium-sized enterprises.

Working together

So what does a good apprenticeship scheme look like – and how do the employers and training companies work together? Ian Speakman, Senior Manager, People and Engagement, in Group Internal Audit at Lloyds Banking Group, set up his firm’s apprenticeship scheme in 2019. The scheme won this year’s A&R Award for Best Innovation in Training and Development. From accepting four people in the first year, they took on six in subsequent years and will take on 14 in 2023. “Once the new cohort arrives, ten per cent of our audit team will have started as school leaver apprentices,” he says.

The scheme is ambitious. Every apprentice is expected to complete level 4 and level 7 over four and a half years. They rotate through different internal audit teams and spend a period in a team in the business, earning promotion as they progress. When they complete level 7, they move into their preferred internal audit team. The scheme is highly structured and has developed with experience. For example, the first apprentices were placed in the finance audit team early on to inform their studies, but managers found they contributed more if they moved there after completing the finance learning module.

A close connection between employer and trainer is valuable, says Neil Carver, Internal Audit Tutor at training company MBKB. “Where possible, we plan the whole programme with line managers so they know what the apprentice will be learning at which point and can support it in the job,” he explains. “There’s no set pattern for modules. We can tailor the course to suit individual needs and experience and work schedules.”

Apprentices appreciate the extra support they get from having tutors as well as line managers, since it gives them two sources of information and they can compare advice. “We are often asked for practical advice on audits by apprentices and we offer training on interpersonal skills, such as assertiveness and time-management, to those who need it,” Carver says.

Equally importantly, apprentices get support from colleagues and other apprentices at work, and those studying with the same training provider. “We try to do group training sessions so individuals can mix with other students, network and work in break-out groups, rather than being told what to do,” Carver says. “They can share ideas and working with others builds their confidence.”

Speakman admits that some in the team and management were initially sceptical about recruiting school-leavers. “We argued that it would broaden the diversity of our intake in terms of socio-economic background as well as protected characteristics,” he says. “We saw it as an opportunity to attract people who wouldn’t normally think of internal audit as a career.”

He adds that the scheme aims to train future leaders for the organisation – it is a springboard, not just a route into internal audit. “We want people who are inquisitive and happy to ask questions – it’s the intellectual energy that apprentices bring in that has added the most value for us.” 

What is an internal audit apprenticeship?

The internal audit apprenticeship has two levels – 4, which equates to first-year degree level, and 7, which equates to a Masters degree. Apprentices must also become members of the Chartered IIA. Those who achieve level 4 should go on to get their IIA Certificate in Internal Audit and Business Risk  to become Internal Audit Practitioners. Those who attain level 7 become Chartered Internal Auditors and studies at this level are focused more on the skills required to be an effective internal audit leader.

The Chartered IIA has been the accredited end-point assessor for internal audit apprenticeships
since 2019. This means that every apprentice must be assessed by the institute before they can complete their apprenticeship.

“I think it’s essential that we assess whether apprentices have the competencies to join our profession – we must be part of the process,” says Keith Jenner, End-Point Assessment (EPA) Manager at the Chartered IIA.

Demand for internal audit apprenticeships is accelerating – in the next academic year there will be 135 apprentices at level 4 and 34 at level 7 (176 people have completed level 4 in the past and 16 have completed level 7).

“It’s looking incredibly healthy,” Jenner says. “I’m particularly pleased with the number undertaking level 7, because these are very senior internal auditors, but it’s also encouraging to see the take-up at level 4, because these are all new to the profession. It’s also good to see the range of roles and sectors expanding.”

Those doing the level 4 apprenticeship must complete an online assessment of case studies, produce a continuing professional education (CPE) journal and have a one-to-one discussion demonstrating their knowledge, skills and behaviours through their experiences. Level 7 candidates must give a 30-minute presentation and answer questions on it, and have a one-hour professional discussion about a 4,000-word report they’ve written on a specific project.

A longer article on the award-winning apprenticeship scheme at Lloyds Banking Group will appear in a future issue of Audit & Risk.


Kieran Coult, level 7 apprentice at Lloyds Banking Group and winner of the Audit & Risk Judges’ Award for Outstanding Apprentice.

“When I finished school, I first thought of going to university, but I had a part-time job at the Co-op and wanted to carry on earning,” says Kieran Coult. “I had enjoyed the finance modules of my business and economics A-level and I was keen to join a big financial services firm.”

A conversation at a careers fair made him realise that he could do a degree-level apprenticeship and he applied to around 30 firms. “I reached the final interviews at Lloyds Banking Group and two others and was accepted on to Lloyds Banking Group’s internal audit apprenticeship scheme – I later found out that there were over 2,000 applications for six places,” he says.

Coult joined the firm in September 2020, in the middle of the Covid pandemic, so initially he had to work from home and didn’t meet his colleagues, tutors or auditees in person. Despite this, he completed his level 4 apprenticeship and in September 2022 he embarked on his level 7 apprenticeship at Birmingham City University.

“We’ve spent three years learning and following the approach Lloyds Banking Group takes to conducting an internal audit, but different industries and sectors do things differently, so it’s helpful to gain insights into how others do things,” he says. “I now feel I’m building on what I know from doing the job and learning how to manage internal audit and engage with stakeholders at varying levels.”

The apprenticeship programme also focuses on important interpersonal skills, and Coult has been encouraged to go into schools and colleges to talk about his experiences and encourage others to apply. “I explain my journey so far and advise them that you don’t need to know much about what your role is as an apprentice – they will teach you that – you need to think about what you want to do and your skills and whether the organisation aligns with your values,” he says. 

A longer interview with Kieran Coult will appear in a future issue of Audit & Risk.


 

Alexander Hamilton, level 4 apprentice at The National Trust

“I was looking to do an apprenticeship when I found this one,” says Alex Hamilton, apprentice at the National Trust. “I went to university briefly, but didn’t enjoy it and then did a variety of jobs – from postman to retained firefighter and truck driver – but I really enjoyed my time at Nationwide and could see my future self in that type of role. I wanted to get a qualification while I was working, so when I saw this, I went for it.”

Hamilton was the first internal audit apprentice that the National Trust had taken on and he was told that if he were successful, there might be more in future. “No pressure, then!” he says. They needn’t have feared. He took to the job immediately. “If anything, it’s been even better than expected,” he says. “I didn’t realise how great a reach internal audit has. We’re a small team, so we get to do and see everything the organisation does.”

On their part, the National Trust has been so impressed that they nominated him for this year’s Audit & Risk Awards - for which he was shortlisted.

“The benefit of doing the apprenticeship has been learning all the technical aspects and seeing how the frameworks fit together – it gives such a thorough understanding of why we do what we do,” Hamilton explains. “At work, you only see what your own organisation does. The apprenticeship gives you an understanding of what lies behind it all and the opportunity to see how others do it too.”

He was at first reluctant to ask when he needed extra support, but soon found that he needn’t have worried. “I’m dyslexic, so I knew some aspects would be challenging, but if you don’t ask for support, people won’t know you need it.”

Hamilton is now preparing for his end-point assessment, but says he is tempted to do level 7 once he has more practical experience. “If someone asked me whether they should do this, I would tell them to consider all the possibilities and not just to go to university as a default option,” he says. “This way, you gain a qualification while you work and end up with a three-year headstart on graduates.”


 

Laura Kemp, Senior Auditor and level 7 apprentice at SWAP Internal Audit Services

“I didn’t want to do an apprenticeship – I thought they were aimed at school-leavers and I already had a Masters degree,” laughs Laura Kemp. “I was wrong. It’s a great foundation and I am a more competent and confident internal auditor because of it.”

She started at level 4 and soon met other older apprentices with business experience, particularly when she started working towards her level 7 apprenticeship with Birmingham City University. “It’s the perfect way to start any business career because you get to look at all parts of the organisation,” she says.

“I’m autistic and am in the process of getting a diagnosis of dyscalculia, so I struggle with numbers, yet I got 76 per cent on my finance module. I wouldn’t have achieved that if I’d been studying for the CIA exam without the support of my tutor on the apprenticeship programme.” She adds that this also demonstrates the inaccuracy of perceptions that internal auditing is about “crunching numbers”.

“It’s about getting to the root of a problem, finding solutions and helping people to put these into action – not just numbers,” she says. “If you draw internal auditors only from one pool of people with similar skills and aptitudes then you get a narrow perspective on issues. Internal audit requires a broader perspective.”

For Kemp, the process of understanding what the data tells her, connecting the dots to make patterns and spot trends and bringing these together to solve a problem comes naturally. Understanding how people operate and respond has been more of a challenge.

“The apprenticeship gives you so many tools, tips and techniques for getting the best from people and that’s useful in life as well,” she says. “I’ve had lots of jobs, but this finally feels like the career that fits my skills. Everything I’ve done in my life before has led up to me being able to do this.” 

 

This article was published in July 2023.