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Lean Auditing: Driving Added Value and Efficiency in Internal Audit

Book Description

"How can you argue with the core principles of Lean, that you focus on what provides value to your customer and eliminate work that is not necessary (muda)? Internal auditors need to understand not only who their primary customers are, but what is valuable to them - which in most cases is assurance that the risks that matter to the achievement of objectives are properly managed. We need to communicate what they need to know and not what we want to say. This incessant focus on the customer and the efficient production of a valued product should extend to every internal audit team. How else can we ensure that we optimize the use of our limited resources to address the dynamic business and risk environment within which our organizations operate?"

Norman Marks, GRC Thought Leader

Using lean techniques to enhance value add and reduce waste in internal auditing

Lean Auditing is a practical guide to maximising value and efficiency in internal audit through the application of lean techniques. It is an ideal book for anyone interested in understanding what progressive, value adding audit can be like. It is also ideal for anyone wondering whether audit activities can be streamlined or better co-ordinated with other activities.

The book contains practical advise from the author's experience as CAE of AstraZeneca PLC; from his work as a consultant specializing in this field; as well as insights from leading CAEs in the UK, US and elsewhere. In addition, there are important insights from thought leaders such as Richard Chambers (IIA US) and Norman Marks (GRC thought leader) and Chris Baker (Technical Manager of the IIA UK).

Increasing pressure on resources is driving a need for greater efficiency in all areas of business, and Internal Audit is no exception. Lean techniques can help streamline the workflow, but having only recently been applied to IA, lack the guidance available for other techniques. Lean Auditing fills this need by combining expert instruction and actionable advice that helps Internal Auditors:

  • Benchmark their efficiency against lean ways of working

  • Understand warning signs of waste and lower added value

  • Understanding practical ways of working that improve added value and reduce waste

  • Gain confidence about progressive ways of working in internal audit

  • Understand how improved ways of working in audit can positively impact the culture of the wider organization

  • One of the keys to the lean audit is finding out exactly what the stakeholder wants, and eliminating everything else. Scaling back certain operations can delineate audit from advisory, and in the process, dramatically improve crucial outcomes. To this end, Lean Auditing is the key to IA efficiency.

    Table of Contents

    1. Foreword
    2. Introduction
      1. THE VALUE YOU SHOULD RECEIVE FROM READING THIS BOOK
      2. PART 1 LEAN AND LEAN AUDITING IN OVERVIEW
      3. PART 2 LOOKING AT INTERNAL AUDIT PLANNING AND ASSIGNMENT DELIVERY
      4. PART 3 LOOKING AT KEY UNDERPINNING CAPABILITIES, PROCESSES AND WAYS OF WORKING
      5. PART 4 FINAL REFLECTIONS
    3. PART 1 LEAN AND LEAN AUDITING IN OVERVIEW
      1. 1 Lean Auditing at AstraZeneca
      2. 2 A Brief History of Lean, Notable Principles and the Approach Taken by this Book
        1. ORIGINS OF LEAN AND THE BENEFITS IT DELIVERS
        2. KEY LEAN PRINCIPLES, TOOLS AND TECHNIQUES
      3. 3 Key Lean Tools & Techniques
        1. UNDERSTANDING CUSTOMER NEEDS: THE KANO MODEL
        2. GEMBA
        3. IDENTIFYING WASTE (MUDA)
        4. A WORD OF CAUTION ABOUT LEAN TOOLS AND TECHNIQUES
      4. 4 The Development of Lean Auditing and Its Benefits
        1. THE KEY BENEFITS OF ADOPTING A LEAN AUDITING APPROACH
        2. A FEW WORDS ON TERMINOLOGY IN THIS BOOK
      5. 5 The Wider Benefits of a Lean Audit Approach – and How to Use This Book
        1. THE WIDER ORGANIZATIONAL IMPLICATIONS OF A LEAN AUDITING APPROACH
        2. HOW TO USE THIS BOOK
    4. PART 2 LOOKING AT INTERNAL AUDIT PLANNING AND ASSIGNMENT DELIVERY
      1. 6 Who Are the Customers of Internal Audit?
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
        4. CONCLUDING REMARKS
      2. 7 What Really Adds Value – And What Doesn’t
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
        4. DELIVER VALUE TO MULTIPLE STAKEHOLDERS – BUT MANAGE BOUNDARIES
        5. CONCLUDING REMARKS
      3. 8 The Importance of Role Clarity in Assurance and the Insights Lean Can Offer
        1. AN IIA PERSPECTIVE ON THE UNIQUE ROLE OF INTERNAL AUDIT
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
        4. CONCLUDING REMARKS
      4. 9 The Audit Plan: Taking a Value Approach
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
        4. CONCLUDING REMARKS
      5. 10 Factoring in Risk Assurance in the Audit Plan
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
        4. CONCLUDING REMARKS
      6. 11 Considering the Allocation of Resources to Optimize Value Add
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
      7. 12 Assignments – Types, Scheduling and Resourcing
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
        4. CONCLUDING REMARKS
      8. 13 Using Assignment Scoping and Planning to Drive Added Value
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED ACTIONS
        4. CONCLUDING REMARKS
      9. 14 Assignment Delivery – Managing What Really Goes On
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
        4. CONCLUDING REMARKS
      10. 15 Using Communication and Quality Standards to Maximize the Added Value from Assignments
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
        4. CONCLUDING REMARKS
      11. 16 Assignment Follow-Up and Follow On
        1. COMMON PRACTICE AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
        4. CONCLUDING REMARKS
    5. PART 3 LOOKING AT KEY UNDERPINNING CAPABILITIES, PROCESSES AND WAYS OF WORKING
      1. 17 Measuring Performance and Driving Improvements in Audit Ways of Working
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
        4. CONCLUDING REMARKS
      2. 18 Using Lean Audit Principles to Underpin Cultural Change in the Wider Organization
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED PRACTICES
        4. CONCLUDING REMARKS
      3. 19 Leading the Audit Function
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED ACTIONS
        4. CONCLUDING REMARKS
      4. 20 The Audit Function: Selection, Training & Development and Ways of Working
        1. COMMON PRACTICES AND IIA STANDARDS OF NOTE
        2. COMMON CHALLENGES & DILEMMAS
        3. RECOMMENDED ACTIONS
        4. CONCLUDING REMARKS
        5. References and Other Related Material of Interest
    6. PART 4 FINAL REFLECTIONS
      1. 21 Further Thoughts about Where and How to Start the Journey Towards Lean Progressive Auditing
      2. 22 A Brief Look into the Future
        1. References and Other Related Material of Interest
    7. Other Recommended Reading
    8. Appendix – Illustrative Kano Analysis Regarding Internal Audit
      1. BOARD AND AUDIT COMMITTEE PERSPECTIVES ON VALUE ADD (ILLUSTRATIVE)
      2. SENIOR MANAGEMENT PERSPECTIVES ON VALUE ADD (ILLUSTRATIVE)
      3. LINE MANAGEMENT PERSPECTIVES ON VALUE ADD (ILLUSTRATIVE)
    9. Closing Dedication & Thanks
    10. Index
    11. End User License Agreement