Achieving Auditor Excellence

                                                                              

DAVID MCNAMEE, CIA, CISA, CFE, CGFM

David McNamee has thirty years experience in audit and data systems, including previous experience as a Director of Internal Audit at a multi-billion dollar corporation.  He is President of his own consulting firm, Management Control Concepts, to offer his expertise in internal audit and risk management to others for the past dozen years.

David McNamee has been a frequent invited speaker at international and regional internal auditing conferences on the topics of ethics, risk assessment, and internal audit management, as well as local chapter meetings and seminars for the IIA, AGA, ISACA and others.  He is the author of many articles in professional internal auditing journals, including an award-winning research paper on resolving ethical problems.  In addition, he has authored several books published by the IIA on risk assessment, procurement and operational auditing.  He has been active in the Institute of Internal Auditors at the local and international levels.

David McNamee is a Certified Internal Auditor, a Certified Information Systems Auditor, a Certified Fraud Examiner, and a Certified Government Financial Manager.  He has contributed to improving the audit function with industry, government and not-for profit organizations all over the world. 

David McNamee holds a Master of Science in Telecommunications Management, a Master of Business Administration, and a Certificate in Purchasing Management.  He has taught Financial Accounting at the Santa Clara University Graduate School of Business and is an invited lecturer in Auditing at San Francisco State University and at universities in New Zealand and Australia.  For seven years he was an instructor in the CIA Review Course sponsored by the San Francisco Chapter of the IIA.

In this electronic publication he shares with us the vast amount of knowledge he has gained in his 30 years experience about “Internal Auditing: Basics and Best Practices”.

His other publications include “Auditing Fraud”, “Auditing Purchasing and Contracts”, “Control Self Assessment”, "Internal Auditing: Basics & Best Practices", and “Risk Management and Risk Assessment” electronic publications available on CD at http://www.pleier.com.

Additional references and information are available at http://www.mc2consulting.com/.



All organizations including public companies, governmental organizations, and non-profit organizations have changed significantly in recent year including:

Audit Departments wishing to achieve excellence and succeed recognize these changes, adapt to them, and evolve the role of the Audit Department.

Over the past two decades David McNamee has been privileged to help a number of Audit Departments improve the capabilities of their internal audit department as they work toward the goal of “Achieving Auditor Excellence”.

In this electronic publication David shares some of his leading edge thinking about what significant issues and considerations successful audit organizations at every level must address and confront in order to achieve auditor excellence including:

1) Auditor Skills Required to Succeed

• First Class Consulting Skills
• Marketing Skills
• Facilitation Skills

2) Reassessing the New Economy Environment and Auditor Roles

• The Nature of Change
• See Clearly
• Building Risk-based Audit Plans
• Using Collaborative Risk assessment
• Recognizing the Relationship of Empowerment and Fraud Potential
• Reducing Cycle time

3) Developing and Using Audit Metrics as a Way to Achieve Auditor Excellence

• Performance Measurement
• Productivity tools
• Defining Audit Scope for Excellence

When the entire list above is considered the Audit Department needs an excellent tool to improve group excellence.  A DELPHI exercise that gathers information from experts in a structured fashion is an excellent tool to consider evaluating progress in Achieving Auditor Excellence.  This electronic publication provides an actual DELPHI exercise used by a group of internal auditors from various separate audit department to improve their audit departments.

Your feedback at pleier@pleier.com about this publication would be most appreciated.   Please include the subject “Achieving Auditor Excellence”.

"The Internal Auditor as a First Class Consultant  Presentation"

Webster’s dictionary defines a consultant as “… a person who gives expert or professional advice”.  

To achieve auditor excellence auditors must be consultants who offer expert advice about improvements, conservation of the organization’s resources, and assistance to managers in managing.

Auditors must be consultants who assure the organization receives the best use of its human, physical, financial, and informational assets.

This 17-slide PowerPoint presentation offers a number of practical suggestions and thoughts including the following topics:

"Marketing the Audit Presentation"

As auditors we know about our products from the IIA Statement of Responsibilities:

• Tangible products:  Furnishes the organization with analyses, appraisals, recommendations, counsel, and information concerning the activities reviewed.
• Intangible products:  Promoting effective control at reasonable cost

Unfortunately, not every person in your organization is a member of the IIA.  In fact most of the people in your organization are NOT AUDITORS.

Since this is the case, you need to spend time continually marketing the Audit Department’s valuable services, just as every other product and service must be marketed to be successful.

This 36-slide PowerPoint presentation reminds us that “Each audit is an opportunity to show the customer how Internal Audit and the internal auditor are truly valuable” with practical suggestions and thoughts including the following topics:

"Facilitation Skills for Internal Auditors Presentation"

To achieve auditor excellence auditors must be able facilitators who understand people and use that knowledge to facilitate making changes in their organization.

Examining the facilitation skills required of an auditor in facilitating a CSA workshop might help us better understand this facilitation role.

Another of David’s electronic publications “Control Self Assessment” – see www.pleier.com/csa.htm – provides extensive coverage of Control Self Assessment.

This 40-slide PowerPoint presentation offers a brief overview of what we can learn about the value of the facilitation skills of an auditor including the following topics:

"The Nature of Change Document"

In this 7-page document David McNamee makes these points about the nature of change:

• The uncertain environment does not change or evolve in a straight line.
• There are many "environments" -- each of which is changing.  This complicates the issue so that precise prediction is nearly impossible.
• Knowing the path of change (the change model) and the characteristics of the three phases of change, makes prediction of the path the organization will take somewhat easier.
• The most significant risk to an organization is to lose touch with its environment.

The implication for internal auditors and risk managers is that these two groups within the organization become "porthole watchers" and signals-keepers.  Internal auditors and risk managers need to continually assess the organization's abilities to see beyond its own boundaries.  When warning signs appear, these are the people who must raise the alarm at the highest levels.

"See Clearly: Defining Audit Scope for Excellence Presentation"

To achieve auditor excellence auditors must be able to expertly define the scope of each audit. 

This 37-slide PowerPoint presentation discusses specifically the importance of defining the scope of each audit in the context of understanding the business process, preparation steps, action steps, and the link to excellence including the following topics:

"The Nature of Change Using Risk Assessment to Build a Plan: Auditing in a Retail Environment  Presentation"

To achieve auditor excellence auditors must be able to expertly build an Audit Plan using Risk Management.

Another of David’s electronic publications “Risk Management and Risk Assessment” – see http://pleier.com/rmra.htm – provides extensive coverage of both risk management and risk assessment.

This 30-slide PowerPoint presentation uses the retail environment to share some thoughts about what risk is, how to plan for an audit in a retail setting, and steps to successful audit planning, and the link to excellence including the following topics:


Another excellent reference about Risk Management is “Risk Management: Best Practices, Case studies, and Related Materials” – see http://pleier.com/riskmgmt.htm.

"Fraud, Ethics, and Empowerment Presentation"

To achieve auditor excellence auditors are scrambling to deal with the issue of “Empowerment” that has caused controls chaos throughout many organizations.

Another of David’s electronic publications “Auditing Fraud” – see http://pleier.com/Fraud.htm – provides extensive coverage of the subject of  fraud.

This 35-slide PowerPoint presentation shows what Internal Audit needs to know about Empowerment and its effect on both internal controls and fraud including the following topics:

"Assessing Audit Risk: Collaborative Risk Assessment Presentation"

Auditors use Collaborative Risk Assessment as one of their tools in their search to achieve auditor excellence.

This 28-slide PowerPoint presentation discusses the conditions for success in using this powerful tool that facilitates easy risk assessment including the following topics:

"Assessing Audit Risk: Collaborative Risk Assessment Presentation"

Auditors use Collaborative Risk Assessment as one of their tools in their search to achieve auditor excellence.

This 28-slide PowerPoint presentation discusses the conditions for success in using this powerful tool that facilitates easy risk assessment including the following topics:

"Performance Measure and Productivity Tools Presentation"

To achieve auditor excellent requires an auditor and the audit group to operate as productively as possible and to measure that performance.

This 47-slide PowerPoint presentation discusses the conditions for success by evaluating the factors for improving productivity, determining the best candidates for improvement, establishing performance measurement, examining the cost of poor quality, and analyzing the audit process including the following topics:

"The Role of the Internal Auditor and Performance Measurement Document"

The role of Internal Audit is a natural and necessary part of organizations.  Different stages of organizational growth require that the internal auditor assume different roles - each specific role for a different stage of growth or change.  Organizations and internal auditing are both going through some profound changes. 

Organizations are restructuring, reinventing and reengineering themselves to change their goals and their processes to meet a changing environment

In times of significant change, a general theory or model can be useful as a guide through the “white water” or ”turbulent” times.  Internal auditors also can derive some useful tools that help to continue to deliver value to the organization.  A general theory also answers the fundamental questions, “Why does Internal Audit exist?” and “Does the audit function really add value?”

Our research has developed a number of models that explain the answers to our fundamental questions.  One model helps explain why Internal Audit is a necessary function of all organizations.  Another model explains a number of audit roles and relationships and where internal auditors contribute to organizational value.  Our models also give some practical means of assessing ourselves so that internal auditors can measure their own organizational effectiveness.  Finally, our models point us along a path of growth and increasing value to the organization.

In this document David addresses specifically these items:

"Reducing Cycle Time Document"

Our audit customers' biggest complaint is that, "Audits take too long!"  Not only does the length of the audit tend to irritate the audit customer, but lengthy audits have higher costs and lower value.  Information has value that is quickly eroded by lengthy delays.  All of these issues can be addressed by better audit focus through goal alignment, redesign of paper flow, and reengineering of audit communications.

Managing a process to achieve economy, efficiency and effectiveness is the real objective.  Reducing cycle time is a buzz word.  Nevertheless, reducing cycle time does help focus the process improvement where it can have a large operational and financial impact:  time.  The sources of time-wasting are paper- and labor-intensive operations.  To reduce cycle time in the internal audit process, we need to address our labor-intensive preliminary survey, our paper-intensive working papers, and our reporting.

Reducing cycle time must always be completed in the context of improving customer satisfaction with products and services.  Understanding who the customer is, what the customer wants, and when the customer wants it done are important steps to applying the principles of reducing cycle time.

In this 31-page document David McNamee addresses specifically:

"Delphi Group Q&A for Internal Auditing Excellence Workbook"

When the entire list above is considered the Audit Department needs an excellent tool to improve group excellence.  A DELPHI exercise that gathers information from experts in a structured fashion is an excellent tool to consider evaluating progress in Achieving Auditor Excellence.  This electronic publication provides an actual DELPHI exercise used by a group of internal auditors from various separate audit departments to improve their audit departments.

This workbook lists 26 actual questions with example answers related to “The Internal Audit Function”.  In addition this workbook contains similar questions with spaces for responses from the group participating in this Delphi workshop to apply the Delphi tool in your audit group to determine whether of not your audit group is moving toward Achieving Auditor Excellence.

If you like the quality of this electronic publication on CD check http://www.pleier.com or call (949) 830-1575 9AM to 4PM California USA time for additional information.

Current Publications – Click the link to preview:
 

• 21st Century Audit Management – Opportunities and Challenges – by a number of contributing authors
• A Practitioner’s Guide to Performance Auditing by Muhammad Akram Khan
  
• Auditing Fraud - Complete Publications, Threat Scenarios, Purchasing & Contracts Fraud - by David McNamee
• Auditing IT Infrastructures by Alan Oliphant
• Auditing Purchasing and Contracts by David McNamee
  
• Control Self Assessment by David McNamee
• Internal Auditing: Basics & Best Practices
  
• IT Auditing: The Basics
  
• Internal Auditor Toolkit by Michael Lapelosa
• Modern Integrated Audit Approach by Michael Lapelosa
• Risk Management - Best Practice, Case Studies, and Related Material – by a number of contributing authors
• Risk Management and Risk Assessment by David McNamee
• Systems Analysis and Design by Bill Anderson

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