Unexpected opportunities create more headaches for internal audit teams.
Opportunities and challenges for internal audit teams abound. In the wake of the financial crisis and the economic growth experienced since the second half of last year, business adjustments have created new risks and taken internal audit outside its known realms. But there are some best practices—gleaned during a meeting last week of The NeuGroup’s Internal Auditors’ Peer Group—that can guide auditing professionals.
First, the group agreed that a “hire now, apologize later” approach was best. If there is no one on staff to figure out the intricacies of the new business, buy the expertise. Or failing that, “rent to buy” as one member put it. Even if there is a hiring freeze, the audit group needs to find some way to acquire the needed expertise, or problems will arise that make the cost of a full-time employee seem trivial.
Second, find out exactly what the board’s audit committee wants. How much information are they expecting? And what is their benchmark for the group’s industry expertise? This last question may help internal audit recruit necessary skill sets.
Third, find out how you’re being evaluated. If you move into a new business or build out new areas of R&D, make sure you have return on investment expectations documented. On the R&D front, making sure return and market assessments are done at each project stage is a good idea, otherwise a project gets pushed out and eventually flops because, past the approval stage, no one does a subsequent check to see if technology has shifted and demand for the solution has waned.
With many eyes glued to the developments in the Lehman Brothers auditing news, it may be tempting to put off long-term structural fixes like the above. But this is the best time to execute changes, since the fallout from the crisis is still fresh in memory. And those opportunities stemming from the meltdown and subsequent recovery will justify a bit—if not a flood—of new investment.