The Coronavirus Crisis has dramatically impacted all industries, as remote work and social distancing has become a requirement to keep employees and managers safe. The ramifications for internal audit have been big too and are likely to be long lasting.
To talk about how internal audit leaders are dealing with the constantly changing circumstances, we spoke with John Kaneklides, the cofounder of The Audit Library, an internal audit consultant, and a former audit senior at a large financial institution. Kaneklides said that it is important for auditors to be mindful and creative in navigating the challenges that coronavirus has introduced into the internal auditing world.
The most important things to do immediately, Kaneklides says, is to check in on the internal audit team’s health and safety, and to make sure that the team is aware that the leader is sympathetic and understanding. “These issues may really affect us ways that we may not expect, and the well-being of your team is very important,” he says.
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The next step is to reassess project priorities to adapt to the change, he says. “You can assess what projects the team needs to push forward and what projects need to be pushed to the backburner. Through doing this you can determine what projects can be completed remotely,” he says.
Remote Audit Challenges
Although internal auditors may be more accustomed to working from home than other professions, some areas can still be problematic with the restrictions on in-person access that coronavirus mandates, such as branch audits for banks and credit unions. Kaneklides highlights the importance of creative solutions to solve these issues.
“One of our clients in Washington, for example, has forgone traditional branch audits and found a workaround to do some self-evaluations with staff, do a random sampling of documents, and to review security footage,” he says. “That’s a great workaround, and depending on how long this lasts, how long we’re required to maintain social distancing, we may have to get more creative and find a workaround with video conferencing.”
Kaneklides says that the audit team’s role is to help the organization, and in a time of crisis, it can, “step up and add value in some sort of tangible way,” he says. Internal auditors should also reach out to other management-level leaders to offer ideas to help the organization.
Kaneklides also highlights the unique opportunity that COVID-19 is giving auditors to get closer with the other groups in the organization. “It’s helping build a rapport between the frontline staff and the internal auditors, so the frontline staff are less afraid of auditors. They are more apt to share information with auditors that may help them do their job in the long run. I think that one great thing we can do is build those great relationships during this time,” he says. At one bank, Kaneklides says internal auditors went to branches to help clean and disinfect them.
Creative Communications
When speaking about difficulties dealing with clients, Kaneklides says that the preference of emails in remote work hurts communication. “When you lean on emails more, you lose a key part of the communication, which is that face-to-face interaction, body language, and tone of voice. So don’t be afraid to pick up the phone, or to schedule that Zoom call, even if it’s a quick check in. Sometimes that human interaction can be very vital to the audit process,” he says.
To deal with the chaos that the pandemic has brought about, organizations really need to prioritize. “Some of the things that are on the easier side of things to do right now are policy reviews, some consulting engagements, and adjusting the expectations of when management will respond to you,” he says.
With coronavirus affecting the economy, Kaneklides advises thinking about the future and the potential for a recession and job cuts. “You need to be prepared for this and looking for ways to become more efficient and effective,” he says.
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Our guest for this podcast is John Kaneklides. He is a co-founder of The Audit Library, a digital collection of audit programs, templates, and other tools for internal auditors, as well as a consultant. John manages teams to perform assurance consulting engagements, develops risk-based audit plans, and creates custom audit governing documents for credit unions.
In addition to his consulting work, John was an Audit Senior at a $1 billion credit union and brings first-hand knowledge to benefit his clients. He has worked directly with credit union executive management on various department audit and policy consulting engagements. John assisted in analyzing risks and developing annual audit plans to ensure resources were appropriately allocated. He also served in an advisory capacity on the Board of Directors’ Asset Liability Committee.