Financial Audit Leadership and Management


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Financial Audit Leadership and Management

  2. 2. AUDIT LEADERSHIPAND MANAGEMENTLeadership: Tasking, advice and motivation of anaudit team.Management: Support, planning and monitoring ofan audit.Leadership = PeopleManagement = ThingsAim of both is to work efficiently.
  3. 3. AUDIT LEADERSHIPAND MANAGEMENT Motivation Support Advice Planning Tasking Audit Monitoring
  4. 4. AUDIT LEADERSHIP AND MANAGEMENTManagement:Support, planning and monitoring ofan audit Monitoring Planning Support
  5. 5. AUDIT LEADERSHIPAND MANAGEMENT1. Support:People: People are the only real resource.People are not machines. They have feelings, wants, needs.Feelings: Happy, sad, depressed, angry, bored.Wants: to be needed, respected, liked.Needs: friendship, understanding.Manager: You have to support your people to get theaudit completed. You need to know them, understandthem, and help them to work.
  6. 6. AUDIT LEADERSHIP AND MANAGEMENTGroup theory:1. Forming: meeting and comprehension (“Hi, I am Mary, I am working in this team with you on the PUB audit”)2. Conforming: consensus in early stages (“I agree PUB needs auditing as soon as possible”)3. Storming: differences and conflicts (“I think we should wait until the stocktake is completed, but John thinks we should start now and sort the stock out later”)4. Norming: sets standards and goals (“I agree we should use CARKEYS, and have this audit finished by 12th august. I am happy with that”)5. Performing: work at full effectiveness (“I am doing the fieldwork at PUB this week, and its going really well”)6. Adjourning: signaling completion (“we are completing the audit report this week. We move off site on Friday”)7. Mourning: parting and nostalgic (“remember the PUB audit, it was so funny”)
  7. 7. AUDIT LEADERSHIPAND MANAGEMENTValues:Cultural values: National culture (driven by history, climate, location etc) Religious culture (respect for elders etc) Company culture (how the people in the company work together) Group culture (Departments, friendship groups, common interests, agegroups etc)Individual Values: Trusted Honest Friendly Respected and respectfulManager: know your team, know how they feel, know and shape their values.Values CAN be changed and created. Make sure you create good ones.
  8. 8. AUDIT LEADERSHIPAND MANAGEMENTEquipment:People cannot work without physicalresources:• Laptops, pens, paper, light, power.• Data and information• Somewhere to work. Desks, office.Manager: You need to make sure your team has everything they needto complete the audit. They might not tell you they don’t have it orneed it. You have to find out, and then you have to get it.
  9. 9. AUDIT LEADERSHIP AND MANAGEMENT2. Planning:Simple planning.Three things:• Calendar. Deadlines (when do you need to finish?). Holidays (national andpeople).• Task list of things to do & List of team members.• Simple Gantt chart showing tasks and times.
  10. 10. AUDIT LEADERSHIPAND MANAGEMENTFive Stages of an Audit:Initiating (getting started – ALL, APM, LOU pick team)Planning (the audit plan – list of tasks, team, dates, locations)Execution (the audit fieldwork)Controlling (setting tasks and goals, measuring the team against thosegoals)Closing (The Audit Report and signoff) Initiate Plan Execute Control Close
  11. 11. AUDIT LEADERSHIPAND MANAGEMENTGantt chart:Simple blocks of time, starting at the top and moving down and across.Easy planning tool. Put the start in, put the expected and in, put holidaysand other problems in, then plan the workload.Start simple – the three stages of an audit: Plan, Fieldwork, Report.Then expand to cover the details. PLAN FIELDWORK REPORT Week 1 Week 2 Week 3
  12. 12. AUDIT LEADERSHIPAND MANAGEMENTPlanning:• Use a checklist of standard audit areas. (Section Dividers)• Cross off areas that are not valid for the entity.• Estimate the effort for each task (people days or hours).• Consider who can conduct the audit work for each area.• Consider how you will monitor each of the areas.
  13. 13. AUDIT LEADERSHIP AND MANAGEMENT Week 1 Week 2 Week 3 Week 4 Week 5 Week 5 Week 6 Week 7Pre EngagementMeetingAELAALAPMPlanning MeetingsPayrollCreditorsCashRevenueAssetsInventoryInvestmentsTerm DebtcontingenciesJournals TestingGL & Journals ControlDraft ReportFirst ReviewReportFinal Report Manager: You MUST plan the audit. What needs doing, who will do it, When it well be done. You team expects YOU to do this, not them. Without a plan the audit will be chaos.
  14. 14. AUDIT LEADERSHIPAND MANAGEMENT3. Monitoring:Reviews and Reports.• Weekly debrief.• Performance reports and appraisals.• Knowing what to expect, then measuring against it.• What to do if things go wrong. Fallback plans.Manager: You MUST monitor what is happening, and measure itagainst you plan. You MUST have alternative plans, and solutions, ifthings go wrong.REMEMBER: Managers earn their pay when something goes wrong,not when it goes right!
  15. 15. AUDIT LEADERSHIPAND MANAGEMENTLeadership:Tasking, advice and motivation of anaudit team. Motivation Advice Tasking
  16. 16. AUDIT LEADERSHIPAND MANAGEMENT4. Tasking:•Deciding who does what.•The career development problem•Succession and career planning.•Do you give inexperienced people a chance?BE FLEXIBLE.Manager: You have to decide who does what. You have to know the skilllevels, the values, the attitude of your team members. You have to besure they can do the tasks you give them.
  17. 17. AUDIT LEADERSHIPAND MANAGEMENT5. Advice:• Know the subject.• Be free to provide guidance and advice.• Make decisions.• Be approachable• Know your limits. You are part of a team. Remember – “any ideasanyone?”. Your team are smart people. You are not always right.Manager: You need to know what the team is doing, and understand howthey do it. If you have a problem ASK THE TEAM.
  18. 18. AUDIT LEADERSHIP AND MANAGEMENT6. Motivation:Management by objectives:Tasks, timelines and deadlines, reviews, signoff. Relies upon authority.“Peter, please do the Journals Testing, I would like it complete by Friday, so youhave four days I will review it on Monday and if its OK I will sign off on it.”Agile Management:Autonomy. Free to work how they like. Relies upon enthusiasm.“Someone needs to do the Journals Testing before the end of this week”.Charismatic leadership:People admire and follow you because you are interesting. Relies upon Character.
  19. 19. AUDIT LEADERSHIP AND MANAGEMENTTeam:Enthusiasm: Team MUST be enthusiastic about anaudit.Knowledge: The team need to know what they aredoing any why.Manager: You have to motivate the team to do the work. You can be anexample (work hard, arrive early, leave late), or use MBO, setting tasks andtimes when you want work completed.
  20. 20. AUDIT LEADERSHIPAND MANAGEMENTFinal Notes:1. You are all Managers. You manage your own time and resources.2. You need to understand management practices and theory to work with a Manager.3. You should all plan and aim to be Managers.
  21. 21. Thank You!