Internal auditors play a crucial role in ensuring good governance, risk management, and control within organizations. As the internal audit function evolves, so too does the spectrum of necessary skills for an exceptional internal audit leader. In this blog post, we will discuss the top 10 characteristics of exceptional internal audit leaders and why they are important
1. Credibility at a senior level
Exceptional internal audit leaders must be able to establish and maintain credibility at a senior level within the organization. They will need to go toe-to-toe with chief executives and other C-Suite stakeholders, which requires excellent communication skills and the ability to challenge the views of senior management. When doing so, they must incorporate solid evidence into a well-developed strategic plan. This plan or vision must fall in line with the organization’s business goals and include specific steps for achieving success.
Trust-building is essential for internal audit leaders, who must be able to establish and maintain trust with stakeholders at all levels, including management, employees, and external stakeholders. The best leaders can engage and influence stakeholders throughout the organization while cultivating a high level of trust and respect. By building trust throughout the organization, the CAE also increases engagement levels. Although developing these relationships can take time, the benefits are undeniable.
3. Good stakeholder engagement
Credibility at senior level and trust-building both feed into a wider characteristic that is becoming key for internal audit leaders: stakeholder engagement and building collaborative relationships. Successful auditors use effective communication to reduce push-back during the auditing process, promote a greater understanding of internal audit’s value in the business, and increase the speed at which information is shared in response to audit requests.
4. Technical competence
While employers are placing more emphasis on soft skills, technical competence remains fundamental to heads of audit positions. Key stakeholders expect the highest level of technical competence, and all internal auditors need to be familiar with how technology can support the internal audit activity, plus a range of data analytics platforms, particularly the ways in which they can be utilized to add value to the organization. Other considerations exist by industry. For example, regulatory awareness is especially important in financial services and banking, so having a skills inventory and a talent model that corresponds to the organization’s risks and needs is critical.
5. Strategic thinking
While audit is the third line of defense, businesses want more from their corporate governance areas and this often involves an increasingly active part in strategic thinking. Internal audit leaders must embrace and leverage new technologies to deliver on their strategic imperatives, and they must proactively preempt issues rather than simply stamp out fires.
6. Business acumen
Internal audit leaders must possess a solid understanding of the organization’s business operations, processes, and industry. Exceptional internal audit leaders must have strong business acumen and be able to apply their knowledge to identify risks and develop effective controls. They should recognize the essential elements that make their organization successful, adding value by building the internal audit department around these principles.
7. Well balanced
Alongside traditional auditing skills, internal audit leaders with specialist capabilities are in strong demand. Banks and financial organizations are keen to hire auditors with specific regulatory prowess in liquidity, credit, and risk. Individuals with knowledge of FARS, DFARS, and CMS requirements are in high demand, and considerations around IT internal audit skills are outstripping general audit demand.
8. Effective leadership
While the type of required leadership skills can differ from business to business, effective leadership requires a complex skillset that is constantly evolving. The best leaders are always looking for new ideas and ways to increase effectiveness. When it comes to developing leadership ability, persistence really does pay off.
9. Quick thinking and flexibility
The internal audit landscape is picking up pace and internal audit leaders must be willing and able to make changes to their annual audit plans as unexpected shifts in market conditions occur. Quick thinking and problem solving are key skills at the heart of internal auditing and the best problem solvers will apply creativity and innovation to address complex issues. With the continued evolution of regulatory demands, processes, and technology, audit professionals must take a forward-looking approach to providing assurance and advisory services, remaining open-minded and willing to engage in an appropriate risk level.
10. Culture influencer
Company culture is increasingly important to corporate governance and internal audit is no exception. The function is moving away from the once prevalent “tick the box” compliance approach to one in which internal audit leaders are vital role models in keeping executive teams on course. Instead of avoiding change, the best internal audit leaders work to inspire change, creating an atmosphere in which people are willing to take chances on innovative ideas.
How MorganFranklin Can Help
If stakeholders find internal audit leaders to be highly effective with the characteristics shared, then the internal audit activity, as a trusted advisor, provides significant value to its organization. MorganFranklin’s internal audit professionals, which include former Chief Audit Executives as well as technical and industry experts, enable internal audit functions to drive value by aligning organizational focus and resources on strategic objectives and risks that are most critical to stakeholders. We draw from the depth and breadth of MorganFranklin to design and implement internal audit solutions that drive value.