Managing Internal Audit Successfully – Which Way Do I Look?

By Hal Garyn, Managing Director, Audit Executive Advisory Services, LLC


Picture this … you are the new Chief Audit Executive (CAE) just hired into an organization.
You have three major things on your mind as you walk in the door on your first day:
you wonder what the team is like that you are inheriting,
you wonder who among your peers in the organization you should reach out to first,
and you wonder what the best way is to start establishing relationships with the
Executive Team and the Audit Committee members.

Then the first day goes by in a whirlwind of meetings, interactions, and, quite frankly, no time to breathe. And the first day, turns into the first week, and then the first month. Where did the time go, and am I spending my time in the right places, you ask yourself often. Welcome to the world of anyone leading an internal audit function.


Look Down, Look Across, Look Up

Leaders lead, yes, but leaders also manage.
And CAEs manage three key constituents.
They manage “down”, by managing their staff.
They manage “across”, by managing the relationships with key individuals throughout the organization
And they manage “up”, by managing the relationships with their bosses, executives, and applicable board members.

Spending too much time on one over the other two can be a problem. Just as not spending any time on one at all can spell disaster. In the end, it is critical to be strategic in how you allocate your time on all three constituents, so that you are “looking down, looking across, and looking up”.


Common Mistake 1:  Looking Down Too Much


One of the things organizations want, or at least they think they want,
is a leader who can and will “roll their sleeves up” and get work done.

Head down:  execute. While that is admirable, it is also rather short-sighted when it becomes a major expectation for someone who is the CAE. If you, as the leader of the internal audit function, are getting into the details of the day-to-day work too often, “rolling your sleeves up” as they say, you are almost certain to be over emphasizing the “looking down” aspect of the job.

And, when it comes time for that annual performance evaluation, your peers who you work with across the organization and the leadership you report to (executives and board members) may have some rather harsh feedback on your lack of relationship building and communication style because they hardly know you.

Another pitfall of over emphasizing the “looking down” aspect comes from our background and experience. At some point in your career, unless you became the CAE with no prior experience in internal audit, you were executing and managing individual internal audit projects. So, getting into the details is what feels comfortable, and can be a natural default mechanism, especially in times of high stress.

You get busy, you want to get into the details, and suddenly you find yourself too immersed and can end up neglecting everything else. Further, there is the “detail oriented” and “introverted” stereotypes that can play a role with internal audit professionals gravitating to the details of the day-to-day. Project management, workpaper reviews, scoping meetings, team meetings, performance evaluations, etc. – that is a full-time job alone, right?


Common Mistake 2:  Selectively Looking Across Only

Likely, as the CAE, you have found a couple of individuals in the organization that you have developed a strong relationship with – the type where you can discuss anything with them, and they with you, and you know it will remain confidential.

These are people who either see the organization the same way you do or they are people who you trust to challenge your thinking when you want an effective, yet confidential, sounding board.

However, there are many more people in the organization that are at the same or similar level across the organization that are just as important to have a relationship with. The relationship may not be as open or comfortable as with these aforementioned colleagues, but you still need to be on a good rapport with them … if possible, all of them.

Information flows across the organization, among organizational “peers”,
are critical to knowing what is really going on in the company and makes
sure you remain visible and relevant to the entire organization …
not just when an audit is in progress in a given area.


Investing in these relationship takes time and requires the CAE to really think hard on how best to connect with people who are all facing great pressures to simultaneously perform, as well as manage and deliver on promises and commitments in their respective areas.

Do you want these people to view you as nothing more than a distraction and an impediment in the way of them achieving their goals? Or do you want these people to view you as a collaborative partner who has their best interests and, in turn, the organization’s best interest in mind, and at heart, at all times?

If you are an “unknown” to them, then you risk the former … you and your function will be viewed as an obstacle.If you have a strong, collaborative relationship,the opportunity is the latter … you and your function will be viewed as the value add,strategic partner you want to be. Managing across is critical to managing perceptions,so investing time on this constituent will pay long-term dividends.

Common Mistake 3:  Not Looking Up Enough

So, who might be in the “looking up” category you should be paying attention to? Certainly, anyone in the C-suite and the Audit Committee of the Board, at a very minimum.

For the CAE, do you have some form of relationship with each one of these folks?

You do not have to be best friends with any of them, and you probably should not. But, you do have to invest the time and energy managing up and developing relationships such that they will talk to you when you need to talk with them and, better yet, they want to initiate coming to you.

That means having the relationship developed in such a way where you do not have to go through their administrative “gatekeeper” to talk with any of them. And, if need be, the administrative gatekeeper knows you well enough to know that your call should go straight through and/or your meeting request should receive top priority.


Do any of these folks call or e-mail you directly?

A great sign of the strength of these relationships would be the frequency with which they reach out to you to tell you something you need to know and/or want your opinion on some important matter.


As the CAE, you want to be viewed as an executive, right?

So, you have to work hard at managing these relationships each and every day … if you are visible to the executives,then you have a much better chance of being viewed as one of them … the executive you know you are.

And what better way to make sure you are thinking about the organization like the executive team does,both strategically and tactically,then when you are in frequent communication and interaction with all of them.

The same goes for your Audit Committee. Is the only time you see or talk with them, especially as individuals, when there is a meeting? Or are you cultivating the relationships with these key “bosses” on the board of your company on a continuous basis?


What To Do? Step to Take

There are three things I would suggest that can be done on a diagnostic basis.

  • Look at your calendar over the last few weeks or, even, months. Where have you been spending your time?
  • Think long and hard about where your audit group struggles the most in being successful. Are there relationships the are undeveloped or under-developed that might be the cause of the struggles?
  • Take the organization chart and rate the relationship you have with each key person on that chart at the same level as you, and everyone above that level. Then use the same scale for how important that person is to internal audit’s long-term success. Yes, this is like a maturity model form of assessment. Where are the gaps the biggest between current state and desired future state?

After you have completed your diagnostic, now it is time to be deliberate and strategic about shoring up the relationships you need to work on. Develop your plan and put it in writing. Then, set aside time every week on your calendar to assess where you need to invest time, as start to add to your calendar meetings, lunches, coffee breaks, hallway walks, telephone calls, etc., etc. with the people you need to work on the relationships with. Assess periodically how you are doing executing your plan.

While the proportion of time spent between “looking down”,
“looking across”, and “looking up” does not need to be equal,
there does have to be a deliberate dedication to doing all three
to be successful managing an internal audit function.
Doing this will pay great dividends toward being the strategic,
collaborative, and value add partner you know you already are.