Knorr-Bremse’s reputation depends on technical excellence and reliability, so its internal audit team needed a solution that could help them stay one step ahead.
Technical excellence and reliability are integral to the ethos of Knorr-Bremse, which has been developing and manufacturing braking systems for rail and commercial vehicles for more than 115 years. The company’s internal audit function must therefore provide a similarly innovative, efficient, and reliable service to offer assurance across the whole organization. No easy task for a company that has grown by acquisitions and has 160 auditable locations with varied systems and processes – and a slim audit.
The company now has ambitions to take its auditing and controls framework to a new level. Knorr-Bremse’s Head of Internal Audit plans to introduce more predictive auditing and to combine internal audit and risk and controls data to create a single system for the risk and controls framework and ensure consistency across the organization.
“The main issue is to find a common language so that we can talk to each other effectively. We want to be able to spot an issue in, say, petty cash, and be able to come at it from both the internal audit and controls angle and use all the available data from all sources,” he explains.
These ambitions are spurred partly by ongoing initiatives to align risk, controls and audit across the different organizational entities, and by new regulatory requirements introduced as a result of its flotation on the stock exchange in 2018. Knorr-Bremse’s Head of Internal Audit has worked to develop the company’s second line assurance capabilities to free internal audit up to offer more services more efficiently.
“The people at the coal face are doing their jobs well and the third line is also operating effectively, but the second line has not played such an important part in the past and internal audit has often stepped in to help make processes work better and standardize them,” says the Head of Internal Audit. “Now we are listed, we need to improve the way the second line provides assurance. Internal audit used to go into offices to talk to people at their desks. Increasingly, our focus is on integrated assurance, so we are going to the second line to identify what assurance they can offer. The work we are doing is similar, but the focus has shifted.”
The company adopted TeamMate AM in 2014 to automate its auditing processes and enhance consistency. One of Knorr-Bremse’s Internal Auditors was brought into the team to use his experience setting up and running service centers and his expertise in rolling out new technology.
“I’m not from a traditional audit background and I was invited into the team because of my operational experience in the business,” he explains.