Decision making in the internal audit function : analysing the skills

Abstract

PURPOSE: The objectives of this study were to conduct a thorough analysis of the skills required by IAors, to provide effectiveness as a function to the entity. Skills have been assessed through the process of IA, which aids the decision making process to be enhanced. The research also seeks to assess whether different sectors possess the same understanding of the needed skills and their approach to work. The aim was also to understand the expectations of the stakeholders and to determine whether there are any gaps between the parties. DESIGN: The research mainly followed a qualitative approach, as it involved discussions with local IAors to gather information which is insightful. This study consisted of twelve semi-structured interviews, the majority carried with inhoused IAors, while the minority with stakeholders from the same entities from private and public sectors. FINDINGS: This study clearly demonstrates that, through the evolution of the function, the skills required by IAors have significantly shifted its focus. More importance is given to soft skills, skills that are not easily educated and that are necessary for one to achieve value adding. Value adding has become essential for IAFs, so it has become crucial to understand stakeholders’ expectations. IAors and stakeholders were found to still have a different view of what management expects from the function. On the other hand, this study depicted the use of the same skill sets by IAors, regardless of the sector one is in. CONCLUSIONS: This study concludes that IAors shall exploit both the technical and soft skills. Yet, soft skills should be given adequate importance, as they should not be taken for granted if one intends to add value within the entity. It can also be inferred that while skills do not vary from one sector to another, the regulatory environment is still a major difference which impacts IAors' work and their approach to work. Finally, it can be concluded that there is a small gap between the expectations of the stakeholders, so work should be done to close that gap and to reach a common understanding. This may be done by increased communication and education to improve the situation. IMPLICATIONS: This study aims to raise awareness on the importance of the applications of skills. The skills that one holds should not be taken lightly, as it could either make or break the function. More knowledge should also be provided to stakeholders about the IAF, as many are still unaware of the benefits. Thus, the recommendations forwarded are meant to improve both the functions and the knowledge of those stakeholders.