Financial Audit Leadership and Management

AUDIT LEADERSHIP AND MANAGEMENT

Ross Hilton([email protected])

Leadership: Tasking, advice and motivation of an audit team.

Management: Support, planning and monitoring of an audit.

Leadership = PeopleManagement = Things

Aim of both is to work efficiently.


AuditTasking

Advice

Motivation Support

Planning

Monitoring


Management:Support, planning and monitoring of an audit


Support

Planning

Monitoring

Manager: You have to support your people to get the audit completed. You need to know them, understand them, and help them to work.

1. Support:

People: People are the only real resource.People are not machines. They have feelings, wants, needs.

Feelings: Happy, sad, depressed, angry, bored. Wants: to be needed, respected, liked. Needs: friendship, understanding.


Group theory:

1. Forming: meeting and comprehension (“Hi, I am Mary, I am working in this team with you on the PUB audit”)

2. Conforming: consensus in early stages (“I agree PUB needs auditing as soon as possible”)

3. Storming: differences and conflicts (“I think we should wait until the stocktake is completed, but John thinks we should start now and sort the stock out later”)

4. Norming: sets standards and goals (“I agree we should use CARKEYS, and have this audit finished by 12th august. I am happy with that”)

5. Performing: work at full effectiveness (“I am doing the fieldwork at PUB this week, and its going really well”)

6. Adjourning: signaling completion (“we are completing the audit report this week. We move off site on Friday”)

7. Mourning: parting and nostalgic (“remember the PUB audit, it was so funny”)


Values:

Cultural values:· National culture (driven by history, climate, location etc) · Religious culture (respect for elders etc)· Company culture (how the people in the company work together)· Group culture (Departments, friendship groups, common interests, age groups etc)

Individual Values:· Trusted · Honest· Friendly· Respected and respectful

Manager: know your team, know how they feel, know and shape their values. Values CAN be changed and created. Make sure you create good ones.


Equipment:People cannot work without physical resources:• Laptops, pens, paper, light, power.• Data and information• Somewhere to work. Desks, office.

Manager: You need to make sure your team has everything they need to complete the audit. They might not tell you they don’t have it or need it. You have to find out, and then you have to get it.


2. Planning:

Simple planning.

Three things:• Calendar. Deadlines (when do you need to finish?). Holidays (national and people).

• Task list of things to do & List of team members.

• Simple Gantt chart showing tasks and times.


Five Stages of an Audit:

Initiating (getting started – ALL, APM, LOU pick team)Planning (the audit plan – list of tasks, team, dates, locations)Execution (the audit fieldwork)Controlling (setting tasks and goals, measuring the team against those goals)Closing (The Audit Report and signoff)


Initiate Plan Execute Control Close

Gantt chart:Simple blocks of time, starting at the top and moving down and across.Easy planning tool. Put the start in, put the expected and in, put holidays and other problems in, then plan the workload.

Start simple – the three stages of an audit: Plan, Fieldwork, Report.Then expand to cover the details.

PLAN

FIELDWORK

REPORT

Week 1 Week 2 Week 3


Planning:

• Use a checklist of standard audit areas. (Section Dividers)

• Cross off areas that are not valid for the entity.

• Estimate the effort for each task (people days or hours).

• Consider who can conduct the audit work for each area.

• Consider how you will monitor each of the areas.


Manager: You MUST plan the audit. What needs doing, who will do it, When it well be done. You team expects YOU to do this, not them. Without a plan the audit will be chaos.


Week 1 Week 2 Week 3 Week 4 Week 5 Week 5 Week 6 Week 7Pre Engagement Meeting AEL AAL APM Planning Meetings Payroll Creditors Cash RevenueAssets Inventory Investments Term Debt contingencies Journals Testing GL & Journals Control Draft Report First Review Report Final Report

3. Monitoring:

Reviews and Reports.• Weekly debrief.• Performance reports and appraisals.• Knowing what to expect, then measuring against it.• What to do if things go wrong. Fallback plans.

Manager: You MUST monitor what is happening, and measure it against you plan. You MUST have alternative plans, and solutions, if things go wrong.

REMEMBER: Managers earn their pay when something goes wrong, not when it goes right!


Leadership:Tasking, advice and motivation of an audit team.


Tasking

Advice

Motivation

4. Tasking:

•Deciding who does what.•The career development problem•Succession and career planning.•Do you give inexperienced people a chance?BE FLEXIBLE.

Manager: You have to decide who does what. You have to know the skill levels, the values, the attitude of your team members. You have to be sure they can do the tasks you give them.


5. Advice:

• Know the subject.• Be free to provide guidance and advice.• Make decisions.• Be approachable• Know your limits. You are part of a team. Remember – “any ideas anyone?”. Your team are smart people. You are not always right.

Manager: You need to know what the team is doing, and understand how they do it. If you have a problem ASK THE TEAM.


6. Motivation:

Management by objectives:Tasks, timelines and deadlines, reviews, signoff. Relies upon authority.“Peter, please do the Journals Testing, I would like it complete by Friday, so you have four days I will review it on Monday and if its OK I will sign off on it.”

Agile Management: Autonomy. Free to work how they like. Relies upon enthusiasm.

“Someone needs to do the Journals Testing before the end of this week”.

Charismatic leadership: People admire and follow you because you are interesting. Relies upon Character.


Team:

Enthusiasm: Team MUST be enthusiastic about an audit.

Knowledge: The team need to know what they are doing any why.

Manager: You have to motivate the team to do the work. You can be an example (work hard, arrive early, leave late), or use MBO, setting tasks and times when you want work completed.



Final Notes:

1. You are all Managers. You manage your own time and resources.

2. You need to understand management practices and theory to work with a Manager.

3. You should all plan and aim to be Managers.

Thank You!

Documents

Financial Audit Leadership and Management