Internal Auditor As An Agent Of Change

When we think of internal audit, what comes to mind for most people are images of a kind of corporate gestapo

. Gray individuals and blue or Grey suits, clean cut, hardworking, and singularly fixated on the one thing and one thing only - compliance!

The job is about as thankless as that of a parking compliance officer or a border guard. The work is dull, and the career path. And at the end of the day, no one really likes you.

Many would say that this is just the way it is. In the great pageant of life we need all kinds, and compliance officers are a necessary part of corporate existence. But is this necessarily so? What if we're to think of control in a completely different way? Instead of being inside the expense and revenue cycles it was something external. The focus now becomes maintaining transaction flow by removing the restrictions. This impacts not just the rate of flow but the bottlenecks they can destroy the rhythm of flow of transactions within the company.

From my experience in the construction of carriage trade homes, an old, Italian worker once told me that you can gauge the quality of the management of the project by the sound of the site. Instead of intermittent staccato bursts of intense activity, there was a smooth continues hum - never frenetic, but continuous that was the hallmark of a well man its site. This is impossible to achieve in a controlled environment.

Another, often overlooked aspect is employee morale. People do not like being watched and scrutinized. Over time it starts to wear them down and eventually manifests in absenteeism, poor quality of work, inefficiency and our cover your asp attitude. If this goes on long enough eventually a kind of blowback takes place wherein the lower management creates a kind of passive resistance which subverts the directives coming down from on high.

It frees up internal audit to work with client departments, as opposed to against them, to look for ways to remove roadblocks to flow. In this way internal audit, is working with instead of against those and the client apartments. Employees will thus be far more forthright in providing auditors with an accurate picture of what's really going on beneath the surface. The auditors will now be seen as liberators rather than much hated appendage of the corporate state.

by: John Berling Hardy.

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