In Times of Change, Internal Audit Offers Stability and Value

Business leaders face difficult decisions that may have both short-term and long-term implications for their business, employees, investors and stakeholders. There are ways Internal Audit professionals can provide value to leaders during these uncertain times.

Open communication is critical and Internal Audit can assist in driving necessary conversations. Communication with executives and management can identify new ways in which Internal Audit can support the organization.

• Executives are navigating uncharted waters. Internal Audit should proactively talk with leaders and offer insights on risk – positive and negative – for the decisions and options being evaluated; as well as assess the potential impact on processes and activities that occur regularly across the business.
• As changes occur within the organization, Internal Audit should initiate conversations with managers to discuss issues and challenges facing their unit. Internal Audit can assist managers in evaluating new procedures and consider the risks associated with modifying traditional processes. Additionally, Internal Audit can identify opportunities to connect individuals experiencing similar issues and increase collaboration between departments.

The COVID-19 pandemic has required all organizations to modify processes and adapt their personnel to a new way of working. With social distancing and a remote workforce, many traditional, day-to-day procedures were turned upside down almost overnight, resulting in “on the fly” changes to activities that were previously meticulously designed. 

• Social distancing may limit the ability for in-person collaboration and controls that traditionally are performed in unison and must now be redesigned. Consider procedures and controls that occur in the field or on a production floor, either in close proximity or by two individuals working in unison that must now be altered. Internal Audit can assist managers with identifying key controls that require modification and making creative suggestions to ensure objectives are still met.
• Remote working may impact how controls are executed and documented. Consider controls that were previously evidenced in a manual nature. Do employees responsible for executing manual controls have the ability to print, scan and retain evidence required to document execution? Documentation issues that are not proactively addressed could result in deficiencies that require more work down the road.
• Employee turnover is another area in which Internal Audit can step in and help the business manage risk and avoid deficiencies. Workforce reductions are an unfortunate reality in the current business environment. As executives make these difficult decisions, the remaining staff must find ways to carry on with fewer people and identify actions that must be transferred to another individual. All of this must be done without introducing an unacceptable risk from the lack of segregation of duties. Internal Audit can provide insight on the control activities that must be reassigned as well as the design of new controls and processes that are necessary after a workforce reduction.
• New legislation has already been issued in response to the pandemic, with more possibly to come. Internal Audit can assist leaders in understanding the advantages, disadvantages, and possible new compliance requirements of legislation and, where necessary, offer guidance on the integration of new activities that are the result of legislation.

We are living in unprecedented times and uncertainty is high. Amidst the challenges, there are opportunities for Internal Audit to work alongside and consult with business leaders to develop a proactive response to the current pandemic. If Weaver can be of assistance to your organization in evaluating risk, process and control, please contact us today.

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