Top 3 Critical Skills for the IA Profession

Speaker A: Hi, everyone, and thank you for joining us today. This is the second episode of our risk advisory podcast series supporting the IIA's internal audit awareness Month. I'm Jodi Lewis and I'm a manager in our risk advisory practice at Cherry Becker. And I'm joined today with Andy Jamison, a director within our group. In the first podcast of the series, we cover the IIA's Vision 2035 report. If you haven't read that report yet, I, uh, definitely encourage you to download it from the IIA's website or.1 of the areas of focus was on the importance of internal auditors expanding their skills and experience. So today we're going to dive deeper into the top three critical skills for the internal audit profession. And I think you might be surprised by some of the data. So, Andy, thanks for joining me today.

Speaker B: Yes, thank you. Happy to be here.

Speaker A: So, Andy, we're starting to see an increasing shift in focus in the internal audit profession from more of the technical skills to more emphasis on soft skills. So. So what do you think are some of the benefits of an increased focus on soft skills?

Speaker B: Well, I think there's a lot of benefits. You know, first and foremost, we are in the business of building relationships, becoming a trusted advisor. So being able to communicate effectively is, certainly is key in the job that we do now in being a trusted advisor. We have to be able to have tough conversations. We have to be able to prevent or, I'm sorry, present topics that, um, you know, there may be some back and forth on that there may be disagreement the client with. So we have to be able to learn to convey, uh, those messages effectively. One example I like to cite is in the area of control deficiencies, there is usually room for interpretation. Um, there's gray areas as to whether a control deficiency would elevate to a significant deficiency or material weakness. Those are not always easy conversations to have, but it's part of our job to communicate that result and what that means for their control environment and any changes that they may have to make to their processes and controls. Another thing, you have to understand who your audience is. The way you communicate with a control owner, maybe at the senior associate or manager level, is different from the way you're going to communicate with, um, a controller, a cao, a cfo, a board member. So I think it's important to understand who you're talking to and, um, the most effective way to bring that. Bring the communication, uh, across.

Speaker A: Yeah, I definitely agree with that. How we communicate information like that is really vital and I feel like it helps clients see a way through those situations and really only helps to build those stronger relationships. As a trusted advisor, as you mentioned, more and more we're seeing that internal auditors really have to be more than just technical experts. Which leads us into our first of the top three critical skills for internal audit professionals, which is communication and relationship management. And I think you'll find this interesting, Andy. According to uh, the global survey of internal audit hiring managers conducted by the IIA, 78% of hiring managers noted that business communication skills as being absolutely essential when addressing knowledge areas that influence hiring decisions.

Speaker B: Yeah, I've seen that as well and that doesn't surprise me. Internal audit is such a client centric field. Being able to communicate effectively is essential. You know, again, going back to audit findings, those include compliance issues, internal control weaknesses, potential risks. You have to be able to articulate all of those, um, in a way that the client will understand and appreciate. Delivering bad news objectively without undermining their trust. That's a skill that could separate great auditors from the rest. Um, and it's not always bad news. It's just you have to have the ability to adapt to a change in conversation. You have to be prepared to explain yourself, uh, in whichever direction the conversation may go. But part of being a trusted advisor, part of um, adding value in the way that we do, is being able to communicate thoughts and conclusions effectively. And you know, within that 2035 report, and I've seen in uh, several other communications from the iia, everyone is talking about the changing role from more of an insurance mindset to an advisory mindset. I think that's going to be helped with some of the, uh, technological advancements that we see that we're going to talk about here soon. Information, good information will be easier to come by potentially. Um, we'll see some efficiencies in obtaining information, hopefully. Um, it's just we, but we still have to be able to communicate that information effectively.

Speaker A: Exactly. And that trust is really critical to your job and to your point. It really allows us to go beyond that assurance mindset into really a more of an advisory role. Uh, do you have any insights on ways that internal auditors can build those communication skills that we talked about?

Speaker B: Yes, I mentioned this before, but I'll reiterate. I think adapting to your audience, considering the background of the person you're talking, to their respective level in the organization, their knowledge and ah, you know, you don't want to come across in too complex of a way, maybe to somebody who doesn't have the experience. You also don't want to go into too much detail with somebody at the controller or CAO level. You want to know what your message is. You want to get that across effectively. Um, and a lot of that just depends on who your audience is. You also have to be a really good, active listener. Um, especially if it's a more difficult message to communicate. They're going to have their point of view, so you have to be an active listener. You have to let them know that you understand and respect what they're saying, and you have to be prepared with a response that is appropriate and again, plays into our role as trusted advisors. Now, as far as your specific message, I think if you focus on the facts, but having the facts at your disposal, the key facts, being precise about them, and focusing on your tone. So not coming across as somebody who knows everything, not coming across as. As somebody who is just communicating, not coming across as somebody who has the definitive answer, I think that that's very important as well. And, you know, you can also, you can learn more about this. There's trainings that are out there. The IIA offers a course called Communication Skills for Auditors. So I think, you know, combination of that, um, on the job training and obtaining feedback from career advisors will give you some of those tips and tools you need to be successful.

Speaker A: Yeah, those are great examples. Andy, I think my favorite one there that you mentioned is adapting to your audience, because really everybody has different experiences and different lenses through which they view things, so someone might interpret something differently than you would have. So adapting your communication skills to your audience is definitely key. So now let's talk through our second crucial skill, which is critical and strategic thinking. More and more we're seeing that internal auditors, we're really not just problem identifiers. We have to be truly problem solvers. And it's not enough just to spot an issue. We have to find its root cause and devise solutions tailored to the organization's goals.

Speaker B: Yes, completely agree. And that's very important. And this is a skill we want to develop, I think, especially in our, uh, you know, our colleagues in the earlier part of their careers associated, um, at the senior level, strategic thinking means looking ahead, predicting emerging risks, and advising clients proactively rather than reactively. I think, you know, along with the goal of become, you know, shifting more into a advisory, um, mindset than assurance, I think requires strategic thinking. Earlier in your career, I think a lot of, A lot of our associates, a lot of our colleagues may just be performing, uh, testing of transactions and it's important to understand what you're doing, but then also think, okay, if I find something here, how could this affect something down the road? So that's the strategic thinking that we're talking about, and maybe allowing for anticipation of future deficiencies or issues before they happen, and being proactive and thinking proactively in that manner.

Speaker A: What are some ways that internal auditors can enhance their critical and strategic thinking skills? Especially some of those internal auditors that might be new to the field.

Speaker B: I would encourage them to be as curious as possible. Uh, ask questions, ask probing questions to your supervisor, to leadership, to others in your orbit who have the experience that may be able to help you. Um, I think being open to new perspectives is another, uh, tip that they can take into account. Don't take disagreement or criticism negatively. Try, um, to consider different points of view and just have a mindset of learning through experience as well. Um, on the job, training as critical, probably more critical than any trainings that you can do. Um, learn through your experience, take advantage of, uh, opportunities for feedback and coaching. Um, encourage your supervisor, your career advisor, to provide you with that feedback and help you grow in that way as well. And then there's always trainings. You know, I mentioned a course before. Um, there's another course that IIA has called Critical Thinking Vital Auditing Competency. So I think a combination of all of these, but mainly, um, just being curious, not being shy about asking questions.

Speaker A: Yeah, those are great points, Sandy. Especially for some of the newer generation of auditors, it's really important to remember that those critical thinking skills, they're built and honed over time through continuous learning, and that leads us into our final critical skill, which is adaptability. So in today's business environment, nothing stays the same for long, really. In fact, in the Vision 2035 survey that we've been talking about during this podcast, and in the last one, when participants were asked what three critical skill sets are most important for internal auditors in the next 10 years, 61% indicated that adaptability and learning agility was the number one critical skill for internal auditors in the future. Regulatory changes, technological advancements, and shifting priorities, all these things require internal learners that can evolve just as quickly as our changing environment.

Speaker B: Yes, exactly. I think that's first and foremost in everybody's mind in terms of, uh, emerging technologies is artificial intelligence. For example, uh, AI is already reshaping audit practices, automating certain processes, providing new insights. It has a potential to really supplement what we do and, and, um, allow us to harness all the information it brings and gain additional efficiencies. I think the most successful auditors are going to be the ones who are able to stay ahead of those trends. I think it's important that they are curious about how to use these tools and have a desire to learn and grow in the knowledge and expertise, understanding what it can and can't do, understanding the risks and strengths of it. You know, for instance, it's what you get out of AI is only going to be as good as the information that it's drawing from. So I think it is going to be required to, you know, to proofread, to, you know, do a mental fact check against what you're saying. Um, does that make sense? Can I use this? How can I use this in what I'm doing? I think those who are curious and who are willing to learn how to use these tools and how to harness all the things that they bring are going to have a leg up over those who don't. Now it's going to be a process learning what it can do. We're not going to just be able to plug in information and have it produce exactly what we want. But I think growing along as a technology adapts and develops and understanding these limitations and applying it appropriately. Another thing is our firm and a lot of other firms are still learning how to best use it. So they're integrating it into certain tools, um, certain firm tools. They're understanding how best it can be used day to day. And I think not just our firm, but industry wide, we're still trying to uh, understand and communicate all the risks of using, uh, artificial intelligence. So in addition to experiential learning, in addition to being curious and gathering what you can from those you work with, I think supplementing your knowledge with additional training is also very important. And understanding just exactly what, uh, the risks and concerns and perceived benefits are in that as well. In addition to that, there's other changes, I think digital transformation, um, I think advances in data analytics, mergers, restructuring. There's always going to be changes that an internal auditor is going to have to keep up with. And I think adaptability ensures that, that um, that person is gonna remain relevant, uh, even as businesses evolve.

Speaker A: Yeah, and inevitably with new rapidly evolving technologies comes new guidelines, compliance standards and regulation which when implemented may change business needs. You know, it provides new opportunities, but also new challenges that might arise. And this really just maintains the need for adaptability and lifelong learning throughout our careers. So to all of our internal auditors out there, take note, technical expertise is vital but those soft skills are key to long term success. Communication fosters trust, strategic thinking elevates those internal audit insights, and adaptability keeps professionals ahead of the curve. As the business landscape continues to change, internal auditors who cultivate these skills won't just survive, they'll thrive. So thank you all for tuning in to our Risk Advisory podcast series for the Internal Audit Awareness Month. If you found today's discussion discussion helpful, please be sure to subscribe for, uh, more episodes. And stay tuned for our upcoming podcasts on data analytics and internal audit and how do we Audit AI? Until next time, keep auditing with confidence.