Being Agile is all about exchange
ComplianceFinanceTax & Accounting2월 16, 2022

Being agile is all about a value exchange

When I look at the IIA’s Mission of Internal Audit, I believe that how we communicate, and how often we communicate, is critical to achieving this Mission:

“To enhance and protect organizational value by providing risk-based and objective assurance, advice, and insight.” IIA - Mission of Internal Audit

As an agile coach, I’ll often joke that I simply earn a living from asking people to talk to each other. There’s definitely truth in that, as the real challenge in internal audit is better communication and doing more of it. 

Let’s start with our communication with audit clients, business leaders and other stakeholders.

Auditors need to be accountable for delivering value (assessment of risks aligned with strategic imperatives), but require value in return (input, information, access) from their auditees, business leaders, and other stakeholders.

It’s a value exchange and I think it’s strongly net positive for internal audit as everyone involved benefits.

Agile audit delivery means sharing our observations or findings as we go, undertaking a value exchange, every week or two, in rapid cycles or Sprints, rather than at the end of the audit.

It’s imperative that it’s an exchange, not simply a tell. Think about communication being a two-way value exchange, not a one-way push. We need to gather insights, encourage and solicit feedback. As auditors we must practice deep listening, to fully understand, not to respond. It’s a conversation, not a sell.

That example is arguably the most important value exchange, so let’s explain that and also look at others throughout the audit workflow or process:

Value exchange between (people)

How  (workflow / process)

CAE and
internal audit leadership

Audit Committee

Continuous rolling audit planning

Value exchanges with execs and Audit Committee – more frequent sharing of audit risk assessments, audit plan and updates.

Move away from a big and complex annual process, towards a rolling 12 month plus annual plan that’s “always-on”, up-to-date and is adaptive to change. Thinking about the audit plan as a prioritized list. Obsessing and prioritizing the near-term audits to ensure they’re “audit ready” and spending less time scrutinizing the placeholders in the medium to long-term.

Tool: Continuous rolling audit planning and team design

Business execs

Internal audit leadership and management

Audit clients

Audit ready

Value exchanges with audit clients to ensure they’re ready to start the audit in the confidence that they will be available to engage.
Move away from audits starting and then being postponed or cancelled (which is wasteful and demoralizing), towards ensuring that audit clients are ready and available to start without any issues or delays.

Defined and enforced acceptance criteria of “audit ready”.

Audit delivery team

Lean audit start

A value exchange with all the essential information for the audit delivery team to start the audit in the best and most informed way possible.

Tool: Lean audit canvas or audit memo, high-level terms of reference.

Audit delivery team

Audit clients

Agile audit delivery

Agile audit delivery means sharing our observations or findings as we go, each week or two, in rapid cycles or Sprints, rather than at the end of the audit. Value exchanges as we progress with the audit, eliminating surprises at the end of the audit for the audit client and stakeholders. The goal is for the audit delivery team to share with audit clients not only what was done but most importantly what was learned. They, in turn, can share input based on their experience or new information to help guide the next Sprint to ensure it is optimally focused on delivering value (risk insights).

It’s imperative that it’s an exchange, not simply a tell. Think about communication being a two-way value exchange, not a one-way push. We need to gather insights, encourage and solicit feedback. For example, seeking client views in terms of what they are expecting you to find in upcoming testing. Are there known business or control issues that they want to flag at this point? What would surprise them, if found? i.e. tipping into risk appetite conversations. With focused, timely, and frequent exchanges, the overall value provided by the audit engagement, as well as the efficiency of the audit process can only improve.

Just to add an important point. I have learned from experience that it is essential to signpost this approach upfront to our audit clients. To say that we will share as we go, but in return, our thinking will mature over time.

Tool: Agile audit delivery (Sprint) framework

Draft report and close out

Value exchanges and sharing as we go, will remove the frustrations of hostile or confrontational close-out meetings. Working this way will reduce rework, and also allow you to reduce the length of your reports and enable greater brevity in your reporting.

Tool: Agile audit delivery (Sprint) framework

Management actions closure

Regularly circling back and value exchanges on the status of management actions will close the actions more quickly.

Move away from waiting for the due date of the action, towards regular discussion and updates on status.

Tool: Continuous rolling audit closure

QA and methodology owners

Quality assurance (QA) reviews

More regular communication and value exchanges with audit methodology owner(s) and QA reviewers to ensure continuous improvement and learning across the whole internal audit function or department.

Tool: Continuous improvement

Within audit delivery team

Agile audit delivery

Central to the agile team-level framework are four communication and value exchange meetings that build better, higher-performing audit delivery teams:

  1. Sprint Planning Meeting – “Plan as a team”.
  2. Daily Sync – “Share progress and challenges as a team.”
  3. Sprint Review – “Present observations and gather input.”
  4. Sprint Retrospective – “Debrief, get better”

Tool: Agile audit delivery (Sprint) framework

I believe that we need to practice better and more frequent value exchanges. It’s called practice for that reason. You’ll need to practice this to form new and better behaviors, and to make lasting change that sticks.

Let’s be agile; let’s become optimized for value exchanges. In audit it’s an obvious way of working to create better audits and have more value placed on the audits by our audit clients and stakeholders.

How might we measure this? Time to value. That’s the time it takes to deliver value to our audit clients and stakeholders. Our goal: reducing that time to value. The agile ways of working that I’ve talked about here all help with this. For example, working in Sprints - every week or two, the audit team has an enhanced value exchange with the audit clients. Not only does it reduce the time to value from the end of the audit to a matter of weeks, but it’s the act of exchanging feedback that leads to better audits and more value being placed on our audits. What other metrics could you see being used in an agile environment? I would welcome your feedback on this article. Please email me at [email protected].

Mark Williams bio headshot
Agility in internal audit consultant, coach, trainer and keynote speaker
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