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Operational Auditing – Essential Tools for Internal Auditors

January 15th, 2013 | Posted by IABlogAdmin in Business Process Improvement | Internal Control | Operational Audit | Soft Skills

By Phil Bertram, Principal, Bertram & Associates LLC

Today’s business executives demand more value from their internal auditors after years of receiving only Sarbanes-Oxley compliance and internal controls reviews.  Besides asking for improved assurance services, they ask internal auditors to conduct more audits that address the effectiveness and efficiency of business operations and processes.  Many of today’s internal auditors, however, have yet to receive training in the essential skills and operational audit approaches necessary to deliver that value.

So, what essential skills and operational auditing tools and approaches must an internal auditor possess to perform an operational audit successfully?

First and foremost, an internal auditor requires proficiency in four soft skills.  Those skills include: Active Listening, Interviewing, Facilitation, and Change Management.

  • Active Listening – An auditor must know what techniques to employ to ensure he or she actively engages their counterparts when trying to learn about a process.
  • Interviewing Skills – An auditor must understand the questions to ask and how to ask them when conducting interviews to gain information and understand how a process operates.
  • Facilitation – An internal audit must know how to set up and lead meetings that get results.  This requires knowledge of facilitation techniques and skills.
  • Change Management – An internal auditor needs to understand how to catalyze change.  Change occurs by helping management set the Tone at the Top and helping everyone buy into the beliefs, behaviors and actions necessary to achieve improved results.

Secondly, an internal auditor needs to understand the internal controls necessary to operate a business process effectively.  In addition, they must understand that evaluating a business process requires the identification of the business process’s goals and objectives first, then the risks to achieving them, as well as the tactics used to mitigate the risks.  The auditor also needs to understand the policies, procedures, and controls management uses to achieve its objectives.  Also, an internal auditor needs to understand the tools management uses to operate its business processes.  These tools include inventory planning, production management, warehouse design, and cash flow management.

Thirdly, an internal auditor needs to master the selection and application of a variety of analytic tools and approaches to perform an operational audit effectively.  The tools available exist within the Six Sigma / LEAN / DMAIC methodologies, as well as approaches like Root Cause Analysis, Business Process Reengineering, Control Self-Assessment, and Economic Value Added.

An inquisitive internal auditor will deliver valued-added results for his or her company.  These results occur when the internal auditor uses essential soft skills effectively; understands internal controls and basic process design; and selects appropriate operational audit approaches and analytic tools for a specific operational audit.

Seminar Presentation

If you wish to learn more about “Operational Auditing – Essential Skill for Internal Auditors”, please attend the seminar I will present for the IIA NW Metro Chicago Chapter on January 31, 2013.  The seminar will teach the essential skills outlined above, as well as some of the tools and approaches necessary for internal auditors succeed when performing an operational audit.

RSM McGladrey will host the seminar at 20 North Martingale Rd., Lower Level Training Room, Schaumburg, IL 60173 on January 31, 2013 from 8:30 AM to 4:45 PM.  Registration begins at 8:00 AM.  Seminar attendees will earn 8 hours of CPE.  The seminar costs $150 for IIA members and includes a light breakfast, lunch, and snacks.  To register, click here: January 31st – Operational Auditing

If your organization would like me to present a similar seminar, please contact me through this blog, at, or call me at 224.735.7472.  If you wish to learn about Bertram & Associates LLC and the services I offer in other areas of Internal Audit Leadership, please visit the web site:  I look forward to serving you.

© Bertram & Associates LLC Published: January 15, 2013 on

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