In the internal auditing departments, resource management is a highly dynamic process. Here's what it involves and how to succeed.
Project resource management in internal auditing has its own nooks and crannies. It is a complex task that requires balancing staff expertise, time constraints, expectations, workload distribution, risk assessment, and effective communication.
Ticking all of those boxes is difficult, but not impossible. In this guide, we'll walk you through the challenges to be aware of in internal auditing when it comes to resource management and suggest some ways to overcome those challenges.
Before we jump to the definition of resource management in auditing, let's unpack the role of an audit function in the organization.
The internal audit function assures the board and senior management about the quality and effectiveness of a bank's internal control, risk management, and governance systems. It helps protect the organization and its reputation.
Senior auditors oversee auditing projects, ensuring that tasks are assigned to and completed by auditors in their team. An average auditing department carries out up to 1,000 audits every year and it is the senior auditors’ job to oversee all of those processes, making sure everything is fast, accurate, and in line with the bank’s quality standards.
In other words, internal auditing is responsible for making sure all operations carried out by the bank are correct, all numbers add up, and all potential risks are under control.
So with this many cogs running in the machine, how do you make sure nothing slips through the cracks?
In comes resource management for internal auditing.
What resource management entails varies in different industries. Construction resource management, for example, needs to focus on various assets, including people and the raw materials they work with. After all, it takes only one material to get delayed for a project to be derailed there.
In banking, however, it is all about your human resources, their availability, capacity, skills, and seniority. To manage resources in internal auditing you need to have a good grip on your resource pool, its shortfalls, and growth opportunities.
Senior auditors need to know how many audits they need to run, how many people they need to run them, and what skills and experience people should have. It’s also their job to make sure that all audits are delivered within the approved budgets (and those tend to be not so robust). With all that in mind, your margin for error remains minimal.
So what are the traps to look out for if you need your people to work just right in internal auditing?
Resource management in auditing is a highly dynamic process. And not only because of the complexity of the job in itself but also because of the transformation the industry is undergoing and the changing expectations the new workforce is bringing forward.
Auditing requires the highest possible levels of accuracy. But delivering that accuracy is no easy feat when you are in a job with a lot of similar tasks, a lot of routine, and monotony — the exact things that can cause human error, jeopardize critical judgment, and make people lose objectivity.
To avoid that problem, senior auditors need to conduct regular staff rotations within the internal audit function, while also making sure that the resources they rotate have the same level of competence and expertise.
This basically means that assigning resources to an auditing project is only the beginning of your journey. You’re in for a dynamic process here, with constant resource shuffles that need to work for the benefit of the project, not the opposite.
In the past, the main requirement for people in auditing jobs was to show professional scepticism and personal integrity. And you would generally look for someone with a background in business.
But things are different now. With the arrival of technology, a global shift to flexible work, and all the changes it brings along, the skills your auditing resources should have and continuously acquire are changing.
For one thing, experts recommend looking for people with an affinity for technology and STEM subjects (science, technology, engineering, and mathematics). You want your talent pool to be very diverse, able to take a critical look at audits and uncover potential blind spots.
In resource management speak, this means that hiring the right resources is much harder than it used to be, yet this is a must for high-quality internal auditing today. You need people with diverse professional and cultural backgrounds — that’s one, but they also need to be interested in upskilling.
Not tracking skills yet? Read all about skills management here:
Professional competence can make it or break it when it comes to high-quality internal auditing.
Auditors need to be able to go through a lot of data and examine and evaluate it for the best audit outcomes. However, using relevant tools and methodologies is no longer enough to excel here. The financial sector is undergoing a massive transformation, new products and processes are coming forward to meet the rising consumer needs.
For auditors, this means that the types of tasks they get grow more diverse, while the level of technical complexity goes up. For the seniors responsible for managing resources, this means that having a reliable skills database and helping staff acquire appropriate training is one of the founding blocks of internal auditing now.
Ever since the COVID-19 pandemic hit, remote and flexible work has been on the rise. And there is no denying that it is here to stay, even for sectors like auditing, which would usually require onsite presence for sensitive information exchange and face-to-face mentorship.
But if there is one thing lockdowns have proved is that auditing can be done, if not fully remotely, at least in hybrid mode. And the modern workforce requires that new level of flexibility in the workplace.
People also expect a more modern approach to career path development. Promoting someone because of the years they have worked for a company doesn’t seem logical anymore. Instead, people expect to receive career promotions when they are ready for them in terms of their expertise, skills, and seniority.
Continue reading: 10 Steps to an Effective Resourcing Strategy
To be efficient, an internal audit function needs to pay attention to four things: independence, objectivity, professional competence, and due professional care.
This can only be achieved by looking at a combination of factors.
Having all of your resources in one tool brings clarity and visibility, it uncovers shortages in resource availability and skill gaps. As a rule, you will have multiple audits running at the same time so having that single dashboard with a bird’s-eye view over all the resources and the tasks they are working on gives security and confidence for better decision-making processes.
In short, resource utilization shows you how productively you’re using your resources. Out of their 100% productivity hours, are they actually being efficient the whole time? Is their schedule built to enhance that efficiency? Resource utilization will answer all of those questions and many more.
Proper levels of resource visibility will make it easy for you to spot and eliminate downtime. This, in turn, simplifies resource optimization and makes your recruitment plans much more accurate. First, you get to make the most of your existing resources. Then you plan strategically who you need to hire. But more on that in a bit.]
Related: 5 Resource Management Reports for Better Decision-Making
To optimize assignments based on skills, you need to have all of your resources’ skills laid out in front of you. A reliable skills database usually does that for you, indicating the role of each resource, their skills, and seniority. What’s more, this database is usually a dynamic system that helps you keep track of the changing picture - to see where your resources gain new skills or upgrade their existing ones.
Once you have that skills database in place, match the right people to the right jobs. See what they are best at and optimize assignments to match their strengths.
When you gain that resource visibility, use the data to optimize your capacity planning and recruitment efforts.
As mentioned before, you need to keep an eye on the diversity factor in the resources you’re bringing in, the skills they add to the team, and the backgrounds they bring along. But efficient auditing is not about bringing people in bulk, it is about analyzing your current capacity to spot the blank spots and then developing a roadmap to fill those blank spots with the most relevant resources.
Making informed recruitment decisions will save you from overhiring or hiring people who can’t fill in all the skills gaps you have (which can easily result in low resource utilization rates and high resource costs).
Job monotony is one of the evils that can derail your projects. Get one number wrong and all of your auditing data will be off. To help your resources avoid that threat, experts recommend regularly reallocating and rotating resources so they get to enjoy those fresh starts.
But for a senior auditor responsible for reallocation, that means having to keep up with a very dynamic process, where it is easy to get confused and lose track of the changing faces.
Needless to say, this is not the type of job you want to be doing manually.
Resource management software helps you take a solid stand in auditing. You get a good grip on the resources you have, the resources you’re missing, and the things those resources can realistically accomplish with or without relevant training.
It’s also a matter of giving people the job satisfaction they expect, eliminating mundane struggles, and giving them a career path where they can see constant development and growth.
With a tool that gives you that next-level understanding of your resources and ways to plan them, you can easily reach new audit quality heights.
Runn helps you to do all of that and much more. Book a demo or start a free 14-day trial today to explore your options!
