2. AUDIT LEADERSHIP
AND MANAGEMENT
Leadership: Tasking, advice and motivation of an
audit team.
Management: Support, planning and monitoring of
an audit.
Leadership = People
Management = Things
Aim of both is to work efficiently.
4. AUDIT LEADERSHIP
AND MANAGEMENT
Management:
Support, planning and monitoring of
an audit
Monitoring
Planning
Support
5. AUDIT LEADERSHIP
AND MANAGEMENT
1. Support:
People: People are the only real resource.
People are not machines. They have feelings, wants, needs.
Feelings: Happy, sad, depressed, angry, bored.
Wants: to be needed, respected, liked.
Needs: friendship, understanding.
Manager: You have to support your people to get the
audit completed. You need to know them, understand
them, and help them to work.
6. AUDIT LEADERSHIP
AND MANAGEMENT
Group theory:
1. Forming: meeting and comprehension (“Hi, I am Mary, I am working in
this team with you on the PUB audit”)
2. Conforming: consensus in early stages (“I agree PUB needs auditing as
soon as possible”)
3. Storming: differences and conflicts (“I think we should wait until the
stocktake is completed, but John thinks we should start now and sort the
stock out later”)
4. Norming: sets standards and goals (“I agree we should use CARKEYS, and
have this audit finished by 12th august. I am happy with that”)
5. Performing: work at full effectiveness (“I am doing the fieldwork at PUB
this week, and its going really well”)
6. Adjourning: signaling completion (“we are completing the audit report
this week. We move off site on Friday”)
7. Mourning: parting and nostalgic (“remember the PUB audit, it was so
funny”)
7. AUDIT LEADERSHIP
AND MANAGEMENT
Values:
Cultural values:
National culture (driven by history, climate, location etc)
Religious culture (respect for elders etc)
Company culture (how the people in the company work together)
Group culture (Departments, friendship groups, common interests, age
groups etc)
Individual Values:
Trusted
Honest
Friendly
Respected and respectful
Manager: know your team, know how they feel, know and shape their values.
Values CAN be changed and created. Make sure you create good ones.
8. AUDIT LEADERSHIP
AND MANAGEMENT
Equipment:
People cannot work without physical
resources:
• Laptops, pens, paper, light, power.
• Data and information
• Somewhere to work. Desks, office.
Manager: You need to make sure your team has everything they need
to complete the audit. They might not tell you they don’t have it or
need it. You have to find out, and then you have to get it.
9. AUDIT LEADERSHIP
AND MANAGEMENT
2. Planning:
Simple planning.
Three things:
• Calendar. Deadlines (when do you need to finish?). Holidays (national and
people).
• Task list of things to do & List of team members.
• Simple Gantt chart showing tasks and times.
10. AUDIT LEADERSHIP
AND MANAGEMENT
Five Stages of an Audit:
Initiating (getting started – ALL, APM, LOU pick team)
Planning (the audit plan – list of tasks, team, dates, locations)
Execution (the audit fieldwork)
Controlling (setting tasks and goals, measuring the team against those
goals)
Closing (The Audit Report and signoff)
Initiate Plan Execute Control Close
11. AUDIT LEADERSHIP
AND MANAGEMENT
Gantt chart:
Simple blocks of time, starting at the top and moving down and across.
Easy planning tool. Put the start in, put the expected and in, put holidays
and other problems in, then plan the workload.
Start simple – the three stages of an audit: Plan, Fieldwork, Report.
Then expand to cover the details.
PLAN
FIELDWORK
REPORT
Week 1 Week 2 Week 3
12. AUDIT LEADERSHIP
AND MANAGEMENT
Planning:
• Use a checklist of standard audit areas. (Section Dividers)
• Cross off areas that are not valid for the entity.
• Estimate the effort for each task (people days or hours).
• Consider who can conduct the audit work for each area.
• Consider how you will monitor each of the areas.
13. AUDIT LEADERSHIP
AND MANAGEMENT
Week 1 Week 2 Week 3 Week 4 Week 5 Week 5 Week 6 Week 7
Pre Engagement
Meeting
AEL
AAL
APM
Planning Meetings
Payroll
Creditors
Cash
Revenue
Assets
Inventory
Investments
Term Debt
contingencies
Journals Testing
GL & Journals Control
Draft Report
First Review
Report
Final Report
Manager: You MUST plan the audit. What needs doing, who will do it, When it
well be done. You team expects YOU to do this, not them. Without a plan the
audit will be chaos.
14. AUDIT LEADERSHIP
AND MANAGEMENT
3. Monitoring:
Reviews and Reports.
• Weekly debrief.
• Performance reports and appraisals.
• Knowing what to expect, then measuring against it.
• What to do if things go wrong. Fallback plans.
Manager: You MUST monitor what is happening, and measure it
against you plan. You MUST have alternative plans, and solutions, if
things go wrong.
REMEMBER: Managers earn their pay when something goes wrong,
not when it goes right!
16. AUDIT LEADERSHIP
AND MANAGEMENT
4. Tasking:
•Deciding who does what.
•The career development problem
•Succession and career planning.
•Do you give inexperienced people a chance?
BE FLEXIBLE.
Manager: You have to decide who does what. You have to know the skill
levels, the values, the attitude of your team members. You have to be
sure they can do the tasks you give them.
17. AUDIT LEADERSHIP
AND MANAGEMENT
5. Advice:
• Know the subject.
• Be free to provide guidance and advice.
• Make decisions.
• Be approachable
• Know your limits. You are part of a team. Remember – “any ideas
anyone?”. Your team are smart people. You are not always right.
Manager: You need to know what the team is doing, and understand how
they do it. If you have a problem ASK THE TEAM.
18. AUDIT LEADERSHIP
AND MANAGEMENT
6. Motivation:
Management by objectives:
Tasks, timelines and deadlines, reviews, signoff. Relies upon authority.
“Peter, please do the Journals Testing, I would like it complete by Friday, so you
have four days I will review it on Monday and if its OK I will sign off on it.”
Agile Management:
Autonomy. Free to work how they like. Relies upon enthusiasm.
“Someone needs to do the Journals Testing before the end of this week”.
Charismatic leadership:
People admire and follow you because you are interesting. Relies upon Character.
19. AUDIT LEADERSHIP
AND MANAGEMENT
Team:
Enthusiasm: Team MUST be enthusiastic about an
audit.
Knowledge: The team need to know what they are
doing any why.
Manager: You have to motivate the team to do the work. You can be an
example (work hard, arrive early, leave late), or use MBO, setting tasks and
times when you want work completed.
20. AUDIT LEADERSHIP
AND MANAGEMENT
Final Notes:
1. You are all Managers. You manage your own
time and resources.
2. You need to understand management practices
and theory to work with a Manager.
3. You should all plan and aim to be Managers.