EQA AS A TOOL FOR REPOSITIONING INTERNAL AUDIT FOR STRATEGIC ALIGNMENT

Why Stakeholders Want Internal Auditors To be Trusted Advisers

The Stakeholders want internal auditors to be trusted advisers because EXCELLENCE breeds organizational Success, Growth and Longevity,

The primary purpose that entrepreneurs (founders+ promotors +equity investors) build companies or businesses is to leave legacies that will stand the test of time.

Thriving businesses contribute to national economy and put food on the table for the families. Therefore, the success, growth and longevity of the businesses are necessary.

Both the primary and secondary purposes of the companies are carved in the company’s vision and mission statements, core values and value propositions.

In life, nothing is certain except change. There are many factors that can adversely or positively affect the ability of the companies achieving their purposes. Foremost amongst these factors are from the external sources which include the Political, Economic, Social, Technological, Legal and Environmental (PESTLE) landscape.

The Environmental factor consists of nature and the external and internal stakeholders with different interests interacting with the companies. Below is the pictorial representation of the different stakeholders that interact with the companies.

The companies need robust strategic direction, successful execution, good performance results, transparent reporting and effective communication with the stakeholders to continue to achieve the purpose of the companies.

There are also internal factors that can generate risk internal risk events that may mar or enhance the achievement of the companies’ purposes. These internal factors include the following:

• Strategy corporate and departmental level strategies.
• Reporting Structures – hierarchies of authorities’ levels and usage from board levels downwards.
• Systems – policies, processes and procedures – governance, management and assurance processes.
• Skills – competencies – technical and soft skills from board levels downwards.
• Staffing – mix and number from board levels downwards
• Staff – – board directors, management & assurance teams with right attitude and rightly motivated.
• Shared Value – core values and cultural practices – from board level downwards – tone at the top, mood in the middle and buzz at bottom.
• Stakeholders’ engagement style – communication quality

The primary responsibilities of the board of directors and management teams are to ensure that both the external and internal factors that create risk events influencing the failure or success of the companies are effectively and efficiently identified, quantities and managed within the approved company’s risk limits or thresholds (appetite, tolerance and ability) while maximizing the inherent opportunities

Perception drives everything – decisions, actions, attitudes and behaviours.

The companies must be perceived internally and externally by the stakeholders to be demonstrating good corporate citizenships by proper balancing of their companies’ needs and stakeholders’ interests in the pursuit of achieving their companies’ purposes.

Stakeholders require reliable information about company’s affairs, current performance results and targets for the future to make informed judgements and decisions.

Below is a pictorial presentation of the stakeholders’ information needs from the organisatoon

Information RELIABILITY comes from the CREDIBILITY brought to bear on the work performance and preparation of the performance reports and presentations required for example by the board and executive management to support strategic decisions and choice of actions to move the company forward. Through the board oversight role, the boards want to monitor the successful execution of the strategic initiatives they approved.

CREDIBILTY is the demonstrated knowledge, competencies (technical and soft skills), practical experiences and commitment (company interest above self) brought to bear on the work performance end-to-end

The board and executive management want assurance that the information they have been provided by the business about the affairs of the company are credible and can be relied upon to make strategic decisions..