Improve

15 Ways of Improving Auditing to Add Value

Organizations are looking to internal auditing departments to add value, improve cost controls, and solve problems.

Attend any IIA meeting and you'll likely hear the expression "adding value" pop up again and again. Motivated by the universal mandate to curtail expenses and boost profits, or perhaps by the specter of outsourcing, auditing departments are seeking ways to add value. An informal survey of several internal auditing departments shows that these challenges are being met in diverse ways.

1 Become a Catalyst for Change

At Digital Equipment Corporation, the auditing department is aimed at becoming a "catalyst for change," said Tom McEachin, Vice President of Corporate Audit. In fact, that expression is part of the auditing department's Vision Statement. Auditors are encouraged to focus on improving the company's competitive edge. "We try to encourage auditors to help Digital's business performance," said McEachin. Auditors have shifted from an emphasis on what has gone wrong, citing errors. Instead, auditors are encouraged to think about what outcomes will help a business unit operate more effectively.

For example, auditors recently examined the life cycle of a product at Digital, focusing on how a product is developed, introduced, and marketed. Auditors worked with engineers, manufacturers, and marketers in a joint team effort. The outcome of the project resulted in a change in how the company was organized and the development of metrics to measure success.

McEachin used this example to illustrate that auditors are looking at how the company operates across a business-wide operation. Auditors recognize that managers are experts and that most can solve their problems. Internal auditors can provide them with tools to accomplish these goals. "The auditing department has been a catalyst for change to help Digital improve profitability after two years of losses," McEachin said. Part of the auditing department's...