Infrequent but significant crises present new challenges for assurance leaders. But with challenge comes opportunity. Opportunity to re-assess how assurance activity is performed and, most importantly, how it can be improved.
Assurance leaders are seldom presented with an opportunity for a strategic reset. You must leverage the opportunity a crisis provides to ask the questions that shape your work:
- Are we focusing on the right things given the changing needs of our business? For example, are we helping to ensure that our organization is meeting customer/citizen needs?
- Do we have the right balance between BAU audits, project/active audits, management requests and advisory engagements? Should we be undertaking BAU audits at all during a crisis?
- Are we aware of, and properly considering, emerging risks (e.g., heightened cyber threats, work health and safety, bandwidth and connectivity, cash flows, revenue loss, supply chain disruption)?
- Do we have the right skills within the team to deliver on the revised audit plan, and are we structured correctly to deliver it?
- Are we making best use of our unique position (e.g. with a view across the organisation, not just within existing silos) to maximise our impact and contribute to new organisational priorities?
For performance auditors, are we properly using our privileged position (e.g. access to wide-ranging information across entities) to target public interest matters and to maximise our impact?
If you are not asking these questions, will you remain relevant?
If you are not asking these questions, are you demonstrating leadership to your team and your organisation in these challenging times?
Opportunity not complacency
But crises – such as global pandemics – do not mean everything is doom and gloom. Quite the opposite, in fact. There is an opportunity for assurance to enhance the value it provides to its organisation (internal audit) or to the parliament and members of the public (performance audit).
Significant changes to an assurance function’s operating context will bring about the following changes:
- A compacted assurance work program, with greater focus on matters that could pose an existential threat to the organisation and/or the delivery of some public services.
- Ongoing flexibility in the work program – the external environment is changing so rapidly that assurance topics may be postponed, cancelled, or replaced at short notice. Assurance professionals must adapt their operating model to deal with uncertainty, in the medium-term.
- An increase in the proportion of advisory projects (versus assurance projects) undertaken – management is likely to place greater emphasis on independent advice and insights that assurance practitioners can provide in times of uncertainty.
- Audit committees will be more engaged than ever, with greater attention paid to individual assurance and advisory projects to ensure that quality is maintained in a very fluid environment.
- The realisation that assurance has some way to go in how it uses data to change behaviour. Consider (for example) the flood of charts, analyses and infographics currently being used to spread messages and influence behaviours. Assurance professionals are also behavioural change agents. So, we must get better at analysing and visualising data to effect change and create impact with our work. Better use of data will compel our audience to understand why they should care.
Business needs and customer needs should take priority in a crisis. There is the chance that assurance practitioners may get redeployed to business areas during a crisis to assist with critical business functions. It will be important to ensure that they are mindful of their ongoing independence and objectivity obligations, both during redeployment and after their return to the assurance function (e.g. by mitigating the risk of self-review).
The opportunities abound during a crisis. There is no doubt assurance leaders will recognise and embrace the opportunity to reflect on their activity. The assurance practices that emerge stronger from a crisis will be those that are most responsive to the opportunities the crisis provides, from the ground up.