Heads of Internal Audit Virtual Forum

9 June 2021

Please note:

• All Institute responses are boxed and highlighted in blue
• Where the chair comments in that capacity, the box is highlighted in yellow
• For confidentiality, the identities of all delegates/attendees are anonymised

Participants

Chair: Derek Jamieson - Director of Regions, Chartered IIA
Institute: John Wood - CEO, Chartered IIA
Institute: Liz Sandwith - Chief Professional Practices Advisor, Chartered IIA

Key takeaways 

Liz Wright - Risk and Assurance Partner, RSM

Delegates gave the following responses in relation to the statement: Which is the biggest challenge you currently face?

• 50% - meeting the expectations of the business
• 13% - meeting the expectations of the team
• 37% - meeting the expectations of the audit committee and other assurance stakeholders

There are many expectational shifts around us - industry revolution 4.0 and Black Lives Matter are just two.

• Organisations tend to reward a fixed mindset
• Typically, transactional performance measures deliverables and avoiding failures, often likened to command and control
• Adopting more of a growth mindset enables innovation, reduces the risk of group think and recognises fewer tangible aspects of success
• The slides include ten traits associated with each mindset as a reminder
• Two broad leadership styles - transactional vs transformational
• Transactional works well in a scenario where there is little change and rules are clear
• Few organisations have been stable in the last 15 months – requiring transformational leadership
• Greater focus on innovation, creating a vision that people want to follow to develop leaders within the team
• Transformational styles enable positive risk cultures, effective decision making and inclusion
• The slides include traits associated with each style as a reminder

 Transformational internal audit leadership observations:

• Moving away from three-year audit strategies to six monthly rolling programmes
• Increased use of continuous assurance programmes
• Increased partnering with co-sourced providers to fill skills gaps
• Embedding of data analytics as a diagnostic audit tool
• Definition and agreement of assurance appetite with key stakeholders
• Developing a partnership approach with the business functions
• Focusing on empowering team members to drive their own knowledge and development

There are nine important 21st century leadership traits:

• Adaptability: Working in different ways including the complexity of professional scepticism for remote assurance
• Self-awareness: Conscious of own biases, strengths and weaknesses to build a team that complements it
• People skills: Ability to interact at a variety of levels and remembering that team members may think differently to us and respond to different reward mechanisms
• Purposefulness: Thinking about our role as internal auditors, we need to be clear about our strategy, mission, vision and gain buy-in from others
• Decisiveness: Making timely decisions – we’ve all experienced issues with indecisive people!
• Collaboration: Valuing the views of others and taking them into account, not being autocratic
• Walk the walk: Demonstrable values and leadership – graduates today are increasingly influenced in their choices by the values of an organisation and the person they will be working for and learning from
• Innovate: The tools are there for internal audit. We need to make the time to learn, develop and make room for them
• Execute: Having follow through – ‘talk is cheap!’

Click here for the session slides.

Chat box comments and discussion

• Experience of internal audit being transformational, well received by audit committee but challenging with management as it highlighted issues that needed addressing
• Speaker: Divergence of culture is interesting whichever way it happens. As leaders, it’s okay to pause and to not have all of the answers. Particularly at the moment, there is a lot of fatigue, and leaders have shouldered the concerns of the team, take a slower pace if necessary. As a proactive leader, both within my own teams and the profession, this year, since Christmas, I’ve noticed that engagement is ebbing away. My usual tools and techniques are not working. It’s more complex than ever
• Speaker: Seeing engagement issues across the board, you’re not alone. Also noticing a stratification of desire to come back into the office, a need to recognise individuals as we continue to adapt. We have found a need for honesty and leaders sharing their own challenges. Our findings also indicate that heroic leadership, working all hours, is not good leadership
• Speaker: Burnout is a major issue: engagement is the thin end of the wedge and a recognised concern within mental health charities
• For me, having to lead as I learn has been challenging. We have all been impacted by the last year but having to lead as I get on top of my own emotions has been draining
• It's been interesting. All of the comments and slides really resonate with me. Change has come fast, and you have to adapt and change both your working style and the way you look at work
• Over the past year, I have had two roles where transformational leadership has been needed. Bringing people resistant to change on the journey has been the biggest challenge, particularly where the business leadership style has been more transactional in nature
• Great points about engagement at the moment. I think it’s just that most of us are bored of staring into the computer all day. Little wonder people are just a bit fed up. No magic answer I'd say at the moment sadly!
• Actually, although back in March 2020 we might have thought "team" was paramount, now a year later we have found that remote working has pushed us towards more regular and formal unit catch-up meetings. Particularly when we are in different locations
• I thought the team (poll result) would have been higher and that is certainly my experience
• Team (poll result) is emerging as the hardest group to maintain high engagement levels
• I agree - I felt the team (poll result) should have been higher
• I found it difficult to choose between the three (poll result) - all of them apply