Achieving Auditor Excellence

About the Author

                                                                              

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.



Achieving Auditor Excellence


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

Doing more with less

Delayering, downsizing, right sizing

Mergers of various activities and acquisitions

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
2) Reassessing the New Economy Environment and Auditor Roles
3) Developing and Using Audit Metrics as a Way to Achieve Auditor 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.

David McNamee shares his vast experience through the use of over 300 PowerPoint slides and 80 pages of documents.

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

Auditor Skills Required to Succeed

"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:

The Internal Auditor as “Consultant to Management”

The Roles of Internal Auditors

Audit Interaction Model

The Relationship of Role to Other Internal Audit Elements

The Role of the Consultant

5 Skills that Make A Good Consultant

Teams and Team Work

Internal Auditors and Teams

Setting Up a Team

How to Gain these Skills

"Marketing the Audit Presentation"

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


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:

Why Marketing

What is Marketing


The Marketing Plan Model


Marketing Plans and Internal Auditing


How to Develop a Marketing Plan


Marketing Plan:  MKTG 101


Fundamental Plan


Action Plan


Internal Auditing Goals and Products


Internal Audit Process Model


Defining Who Our Customers are


Marketing Factor Models


The Power of Attributes


The Four-Factor Model and Internal Audit Products


Internal Audit Customers


High Product Attributes of Major Internal Audit Customer Groups


Internal Audit Customers and Products


Determining What Customers Want


How to Find Out What Customers want


Design the Marketing Communication


Internal Audit Marketing Communications


Other Communication Opportunities


Marketing Plans for the Internal Audit Function


Market (Product) Planning


Market (Customer) Segmentation


Market Research


Market Communication (Advertising)


Marketing the Audit


Competition in the Marketplace

7 Steps to Competitive Readiness

"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:

CSA Workshops Require A Different Set of Skills

Understanding People


MBTI Personality Type Indicators


MBTI Clues


Other Personality Descriptors


Change Management


Change


The 7-Step Change Process


Controlling and Measuring Change

Overcoming Resistance to Change


Change Affects Everyone


Dealing with Change


Building Teams


Planning Steps for Building Teams


Rules on Ground Rules


Team Roles


Team Meeting Cycle


Team Meetings


Agendas


Team Roles and Team Dynamics Facilitation:  Making it easy


10 Success Factors for Teams


Managing Teams


The Facilitator


CSA Problem Solving


The 9-Step Problem Solving Model


Working with CSA Groups: Following Ground Rules


Working with CSA Groups: Dealing with Dysfunctional Behavior


Common Team Problems


Technology and CSA


Building Survey Instruments


Low Tech CSA


High Tech CSA

Reassessing the New Economy and Auditor Roles

"The Nature of Change Document"

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

Defining Audit Scope for Excellence

Achieving Established Objectives


Internal Audit Processes/Outputs


The Excellence Equations


The Audit Scope


The Traditional Audit


“Audit By Walking Around” (ABWA)


“The Quest for Test”


Effects of Vague Assignments


Overcoming Strategies


Understanding the Business Process


Six Steps to Excellence


The Audit Equation


Using the Hypothesis


Deming Improvement Cycle


Involve the Customer


Risk Assessment


The Usual Survey Strategies


Working Paper “Rules”


Leave These Out


Internal Audit Processes/Outputs


The Value Equation


The Six Steps to Excellence

"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:

Using Risk Assessment to Build a Plan

Risk, Uncertainty and the Environment

Risk is a Concept


Managers Put Assets at Risk to Achieve Objectives


Risk Assessment is


Risk and Internal Auditing: The Current Paradigm


The Role of the Internal Auditor and Risk


Auditing without Risk


The Key to Audit Effectiveness


The Equivalent in Annual Plans


Risk-Based Auditing


The Emerging New Paradigm


The Issue of Store Audits


Benchmark Results


The Role of Self-Assessment


The Six Steps to Successful Audit Planning


Linking Internal Audit Assurance and General Management Strategy


Risk Management: A New Paradigm for the Millennium


A New Relationship with Management


A Convergence and Integration


Strategic Planning and the Audit Universe


Linking Annual Plans to the Strategic Plan


Changes to the Individual Audit


Implications for the Internal Auditor:  A New Paradigm


The Opportunity to Build Value


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:

Empowerment has gone from buzz word to reality.

What Empowerment is All About

Three Key Elements for Empowerment

What Internal Audit Needs to Know

Downsizing, Rightsizing, and the Consequence of Change

The Nature of Change

The Cycle of Change

The Paradox of Control

Reengineering and the Cycle of Change

Accountability, Empowerment and Internal Control

Internal Controls for the Empowered Organization

Obligations

Empowerment as a Competitive Advantage

A Systems View of Controls

Controls and the Business Process

Controls Must Be Flexible

The Key Role of Ethics

The Risk of Fraud

The Nature of Fraud

The Three Factors of Fraud

 The Key Factor is Opportunity

 Conditions for Fraud

Taking the Right Line on Fraud

Dealing with the Sociopath

The Role of the Auditor

The Three “Must Have” Conditions for Empowerment

The Role of MIS

The Role of Culture and Vision

The Role of Strong Financial Controls

The Role of Deselection

A Prescription

"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:

Competition, Cooperation and Collaboration

Audit Interaction

Collaboration

Conditions for Success

Building Trust

What is Risk Assessment?

Prudent Management Takes Risks

Understanding the Road Map

Assets at Risk

Risk and Internal Auditing

Auditing without Risk

Risk-Based Auditing

An Approach to Risk Assessment

Measuring Risk

Measuring Subjective Factors

Prioritizing Risk

Adding Dimensions to Risk

Profitability and Quality

Strategic Risk/Opportunity Curve

Collaborative Risk Assessment

An Improved Technique for Assessing Risk in the Audit

Easy Risk Assessment and the Audit Process

"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:

Competition, Cooperation and Collaboration

Audit Interaction


Collaboration


Conditions for Success


Building Trust


What is Risk Assessment?


Prudent Management Takes Risks


Understanding the Road Map


Assets at Risk


Risk and Internal Auditing


Auditing without Risk


Risk-Based Auditing


An Approach to Risk Assessment


Measuring Risk


Measuring Subjective Factors


Prioritizing Risk


Adding Dimensions to Risk


Profitability and Quality


Strategic Risk/Opportunity Curve


Collaborative Risk Assessment


An Improved Technique for Assessing Risk in the Audit


Easy Risk Assessment and the Audit Process



Developing and Using Audit Metrics to Achieve Auditor Excellence

"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:

Improving Productivity

Quality Improvement Process

Audit Productivity Factors

Audit Outputs/Work Products

Audit Process Productivity

10 Productivity Principles

Project Management Techniques and Productivity Improvement

Productivity Controls

Methods for Self-Assessment

Auditing Techniques for Productivity Improvement

Using Kaizen for Productivity Improvement

Personal Productivity Tools

Performance Measurement

The Intangibility of Internal Audit

Quality Control for Internal Audit

The Service Relationship

Systems Thinking

Our Inward Focus

Our Assumptions

Bottom-Line Measures of Performance

Bottom-Line Effectiveness

Multiple Measures of Organizational Impact

Audit Metrics

Efficiency Measures

Effectiveness Measures

Human Resource Measures

Measuring the Investment in People

Measuring the Inventory of Talent

Measuring the Value to the Organization

Quality Factor Measurement Systems

Quality Factors

The Cost of Poor Quality

Typical Internal Auditing Appraisal and Failure Costs

Analyzing Processes for Improvement

Performance Measures and Productivity

"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:

Organizational Development

The Wealth Loop

Why the Monitor/Audit Function Exists

Strategy:  Time-Driven Planning

The Effect of Time on the Organization

How Auditors Contribute to Wealth

Audit Roles and Expectations

Audit Focus:  Dealing with the Right Things

Audit Process:  Implementing the Role

Audit Impact:  The Effect of the Process

Using the Interaction Model to Deliver Value in Times of Change

"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:

Why Reducing Cycle Time is Important

KAIZEN Steps

Understanding the Business Process

See Clearly:  Defining Audit Scope for Excellence

The Link to Excellence

Know Your Audit Process, Products and Customers

Reducing Cycle Time by Reducing Working Papers

Reducing Cycle Time in Report Writing

Eliminating Audit Reports at General Electric

Using Technology to Reduce Cycle Time

DELPHI Exercise to Improve Audit Group Excellence

"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.

Other Resources


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.


Order Online


Please tell other Audit Professionals during your sharing about these resources.

Thank you,

Joseph R Pleier

President
Pleier Corporation