Answering Some of the Most FAQs I Get Asked About Group Internal Audit

Internal Audit can seem like a mystery to many, shrouded in misconceptions and confusion about its true functions and contributions. As part of our commitment to transparency and education, we want to help our stakeholders grasp the vital role we play in driving business success.

Despite the whirlwind transformation of the internal audit profession, many questions remain unanswered. Let's clear up these misunderstandings and shine a spotlight on Internal Audit by answering some of the most frequently asked questions I often receive. Let’s #DemystifyInternalAudit!? ?

FAQ 1: Do Internal Auditors do the same thing as External Auditors?

Answer: No, internal auditors and external auditors have different, but interconnected roles.

Internal Auditors are usually employees of the company. They are an independent, objective audit and consulting activity, providing ongoing monitoring of the company.

They both protect and enhance value and improve an organisation's operations, helping achieve its objectives.? This is achieved through a systematic and disciplined approach to evaluate the effectiveness of risk management, control and governance processes.

External auditors, on the other hand, are engaged by companies to provide users of their financial statements with 'reasonable assurance' that they have been prepared free of 'material misstatements' and are in line with international accounting standards. For example, DP World management is responsible for the fair presentation of financial statements, and our external auditors express an opinion on those statements after their audit.

Internal Audit is not subject to materiality thresholds, and our focus is much broader than financial statements. Today’s internal auditor looks at every process and function across an organisation, and our broader scope enables more flexibility in our audits. However, smart internal audit teams value the collaboration with external auditors for optimal effectiveness and efficiency.

Similarities are clearly present: both require independent personnel, approach their work with professional scepticism, evaluate and test internal control structure and take a risk-based approach.

Both also work with audit programmes, adhering to codes of ethics and professional standards set by their respective professional associations, and report to those charged with governance, in our case the DP World Audit Committee.

FAQ 2: Do I need a degree in accounting to become an Internal Auditor?

Absolutely not! While a degree in accounting can be helpful, it’s not a requirement to pursue a career in internal auditing. We welcome fresh graduates and individuals from diverse fields who bring unique perspectives and skills to the table.

What we value most are your commitment and passion for the work you do. Critical thinking, analytical skills and a healthy curiosity to dive deep into complex issues are the traits we seek in potential internal auditors. The ability to actively listen and engage with a variety of stakeholders at all levels within an organisation, with various problems is equally important, regardless of your background.

With these essential qualities, we can work together to develop you into a high-performing professional in the internal audit field. The path to becoming an internal auditor is open to anyone eager to learn and grow!

Effective internal audit teams often include experts in risk, technology, cybersecurity, data science, engineering, forensic analysis and finance. Last year at DP World, we differentiated our audit functions into Business Audit and Technology Audit, moving away from the traditional 'financial' auditor designation to highlight our broader focus. Additionally, we established a new Data Audit workstream to deliver assurance and risk insights through advanced data analytics and technologies.

High-performing internal audit teams, with their multidisciplinary approach and holistic perspective, are indispensable contributors to organisational success. They assess operations, identify areas of risk and recommend improvement strategies across various functions and departments.

FAQ 3: Are Internal Auditors the enforcers in the organisation?

Answer: No, we are not the 'cops' who catch bad guys, find faults or police activities.?

Internal auditors play a vital role in the organisation, but our focus is on collaboration and improvement, rather than enforcement.

In Group Internal Audit, we prioritise being impact-focused over merely following processes. While thorough auditing processes are essential, there’s little value in identifying control points if they are never addressed or resolved. This approach risks turning our function into a costly exercise that lacks real benefit.

Our goal is to ensure that our findings are clearly understood and acted upon. We engage with stakeholders not just to check off boxes, but to drive meaningful change within the organisation. By focusing on the impact of our audits—ensuring that our recommendations lead to tangible improvements—we reinforce our commitment to adding value and enhancing overall organisational effectiveness.

In essence, we aim to foster a culture of accountability and action, transforming our audit findings into actionable strategies that genuinely improve performance and mitigate risks.

Today’s ethical and dedicated audit teams also focus on coaching companies to emphasise culture, ethics, conduct, governance and risk management, especially during transformation and growth periods.

Credibility and value are enhanced when auditors are proactive, offering evaluations to stakeholders that provide new insights and consider future impacts.? ?

The best internal auditors build strong rapport with their stakeholders, rooted in partnership, integrity and continuous improvement. By connecting and collaborating, we aim to build trust and resilience across our broad base of stakeholders.?

FAQ 4: Is Internal Audit solely responsible for ensuring internal controls are in place?

Answer: No, everyone has a responsibility for internal controls, including all employees, management, executive leadership, the Board and the Audit Committee.?

Simply put, internal controls are activities that help ensure objectives are achieved. Whilst trust in our employees is crucial, bolstering it with effective controls is paramount.

Accountability for internal control is crucial and whilst internal controls reduce risk to an acceptable level, they cannot eliminate it.?Controls are unlikely to win against collusion, override or simply human error in judgment.?There is always an important cost benefit weigh-up required before implementing additional controls.

There will always be risks, no matter what internal audit does. Certain disasters are bound to happen, regardless of the number or quality of internal auditors protecting our organisations. When crises hit, all eyes in the organisation may turn to internal audit to assess causes and consequences.

It is natural that management and the board turn to compliance and governance sections following a risk or control failure. While we strive to identify key risks before failures occur and are tasked with the capability to audit all processes, it’s important to recognise that we cannot audit everything.? ?

We can offer reasonable but not absolute assurance. That's a message that bears emphasis in setting key stakeholder expectations.

FAQ 5: Can Internal Auditors audit areas without being experts in them?

Answer: This is not a straightforward yes or no.?

Stakeholders often have unrealistic expectations about our profession, leading to confusion about our role. Internal auditors wear many hats: we are analysts, controls experts, consultants, teachers, business partners, watchdogs, financial advisers, compliance experts and more.

Some risks require specialised expertise, and for that we can leverage co-sourcing, but as Richard Chambers , the Senior Internal Audit Advisor at AuditBoard and former President and CEO of The Institute of Internal Auditors Inc., aptly stated, "you don't have to be a clown to audit the circus."

It will certainly help though, if you've been to the circus! Through Internal Audit’s unique mandate to access all areas, systems, people and data, we gain comprehensive exposure across the organisation, enabling our team to build diverse experience and knowledge. This, combined with exposure to senior stakeholders and decision-makers, helps our auditors deliver informed insights and recommendations.

Nurturing our talent through continuous upskilling improves auditors’ business acumen. Our digital Internal Audit Academy at DP World offers bite-sized content on various business activities and builds interpersonal skills.

An effective Guest Auditor Programme brings expertise and a cost-effective talent pool from within the organisation to support our work, reducing the need for outsourcing to consultants.

Our findings directly impact the company's operations by streamlining processes and preventing costly failures, ultimately saving money. Internal audit, therefore, has the opportunity to make a genuine and valued commercial impact on the business.

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I hope this deep dive into frequently asked questions about internal audit has given you a fresh perspective on how we navigate today’s complex business landscape. Armed with this knowledge, let's work together to enhance transparency, foster innovation and drive meaningful change within our organisations. Embracing the true essence of internal audit empowers us to build stronger, more resilient and successful businesses!