In American football, a good game plan uses all the players on the field to execute a great play. When you begin an audit, the internal audit entrance meeting is your kick-off to a good game. If there is an opponent, it’s not the audit customer—it’s undefined expectations and fears.
As the audit quarterback, you get to direct the team to overcome these fears. To do so, you need a good kickoff that rallies the whole team, both the audit team and the audit customer. Here are some best practices to kick the audit off right.
The meeting starts with introductions and administrative items but should then jump quickly into the audit process. The entrance meeting doesn’t need to be longer than an hour. It should state the objective while setting the tone for the audit.
Joe Langenfeld, VP of Internal Audit at The MENTOR Network, talks about the specifics of creating a solid start.
“The entrance meeting and the audit are collaborative. We want people participating. We want to keep the client fully informed.”
The entrance meeting is the time to determine points of contact. Ask the audit customer who in their group should receive status updates, how often, and which way (e.g., face-to-face, weekly meetings, PowerPoint). Consider weekly meetings. They help you and the client stay on the same game plan, resolve issues as they arise, and maintain an on-time report release date.
When audit customers feel that they’re on your team, they are more willing to support the audit and make the entire process easier.
When communicating over the phone, introduce the audit team members with pictures. Associating an auditor with their image creates a friendlier atmosphere and helps your audit customer connect to your team.
After you’ve established a collaborative approach, establish objectives. Typically, entrance meetings are presented in PowerPoint. Keep the slides simple so your audit customer knows what to expect.
Marco Loures, VP of Internal Audit at Broadcom, states, “Entrance meetings are very straightforward. You have templates; the auditors come in and have to speak to the slides. The slides are the only thing you tailor for each entrance meeting. You tweak the objectives. The expectations are the same. Processes are the same.”
Loures is upfront with the audit customer about expectations.
“We expect the audit customer to be available, answer emails timely and accurately, and when we need dates and reports, we get those.” Establishing expectations and clear timelines allows the client to develop proper procedures for communicating with you.
The more structure, the better, says Loures. Collaborating and organizing with the audit customer is key to a winning audit.
After you establish audit objectives, share the steps of the process. Take the client through the process, be transparent about the actions, what they entail, and what level of engagement you need at each step.
To help the audit customer understand better, you can present the audit in “Phases:”
Understanding and the walkthrough
Testing of transactions, controls, and data analytics
Share everything. Audits should not have surprises.
Establish how the audit will be rated. Emphasize that the rating is the final outcome of the audit and field any questions. Being clear and upfront about how issues should be found, shared, and rated prevents misunderstandings later during the reporting phase.
Audit clients often feel that a report exposes their performance to executives and committees beyond their control. The information can be intimidating!
Alleviate as much anxiety as possible by showing clients what the report will look like and who will receive it.
You can say something like, “This is how the final report looks. We write all of our audit issues in a specific way. We hope that during the audit, we can engage in thoughtful discussion on how to resolve findings. You will know beforehand issues long before they go into the report. In this final report, you’ll have a chance to write a short management response and commit to a timeline of resolving the issue. We expect to receive management responses before [XX] date.”
This situation is where templates come in handy for Loures’ team. They have a template for everything—the way the audit issue is written, the report, and the executive summary. “Having solid structure cuts back on surprises. Standardizing the process is the only way to have efficiency.”
Let the audit customer know how you plan to release the audit report. Langenfeld and his team allow time to share the draft report. “We put the [audit customer] at ease with letting them know that they’ll get to see the audit report draft before it’s finally released.”
Every company has a different size, different culture, and different needs. Just like the quarterback adjusts the game plan to match the team, so will you.
Here are the takeaways: be upfront, honest, and polite. Assume the best scenario and share your excitement with your audit customer. If you can keep all stakeholders on your team, the rest is easy.