Road Map for the annual internal audit plan based in risks

The annual audit work plan is a very important tool for the effectiveness of internal audit activity, especially when it is based on a view of corporate risks, which impact operational processes, which are segments of the business cycles of the corporation and drivers of the organization's efforts and resources to fulfill its mission, resulting in value creation for the related parties or stakeholders.

The audit plan aims to optimize audit resources (available time and travel budget), with its ability to bring gains to the organization by carrying out performance assessments, legal compliance or financial audits.

In this figure, I summarize the stages necessary for the construction of an annual plan that meets all the value creation needs, by internal auditing for the corporation.

Remembering that this process of creating an annual plan can and should be used by internal control specialists, as the principles are the same. 

I would just add the following comment - If the corporation has two areas, internal audit and internal control, the best thing is to create synergy between the two, and the basis is in the construction of the annual plan, so that, once the audit work plan has been approved, the internal control area prepares its own considering the processes and/or objects that are not part of the audit plan, in order to avoid shadowing ou duplication of efforts, and, in addition, to increase the scope of the processes and/or activities evaluated. 😉

Why the name Crossover?

 

It's very common for people to ask me if the name Crossover has any particular meaning, as this word has different meanings, understandings and usage.

In a simple way, for us, the meaning is to make a journey, overcome an obstacle, cross the bridge, leave one reality and go to another, more innovative and challenging one.

To understand this meaning I need to tell a story that happened to me at least 16 years ago.

I was in a very good professional moment, I was CFO of an American multinational, but something was missing. At this time, I was also working as a volunteer in a care home helping to support young people from needy communities, and I understood that the employability of these young people was very restricted, and I needed, in some way, to change this reality, on two fronts: one by helping to training them, and then strengthening local small businesses.

It was at this time, at the end of 2008, that Crossover was born with the aim of helping to strengthen small and medium-sized companies, expanding the possibilities of employment for these young people.

For me it was a complete change of reality, as I left at least 35 years working as a C-Level in multinational companies, working internationally, in a complex and high-performance corporate environment, to start a company from scratch, which was a great learning experience. .

I needed to define a name for the company, and to avoid personalism, I didn't want to use my surname, I didn't think it was appropriate. I needed a name that would continually remind me that this project would be a profound change in my life, a journey that would certainly bring, as it did, many ruptures, many breaks in personal paradigms, many challenges, different from those that, as a corporate executive, , had experienced, and at the same time, needed a name that represented our purpose, that guided our mission and vision, that gave meaning to the services we would offer to the market.

At the beginning of 2008, during a trip to Ireland, I was visiting a place called “Carrick-a-Rede”, where it was necessary to cross, by means of a wooden and rope suspension bridge, a point, that day, rough with sea, to reach a cliff separated from the continent, and at the beginning of the crossing, there was a warning sign that said - "Be careful to cross over the bridge".

At this moment it became clear to me that the combination of the words "cross over" in addition to representing this moment in my life, offered exactly what would be the meaning or mission of this new company, which is to help our client, in a structured way, to leave the common place, towards a place with better market positioning, more competitive and sustainable.

In disruptive moments like the ones we experience, whether in corporations, in the market and/or in society, we are motivated at all times, "to cross the bridge" that separates us from a known reality to a new reality, still changing, that needs be explored, understood and established.

We believe that the more effective the entity's corporate governance is, the more effective it will be, the greater the organization's ability to achieve its objectives, in a sustainable way, increasing its competitive advantage.

To be effective, governance needs to rely, in a balanced way, on a structure and an environment that promotes governance culture and awareness. It needs to be composed of a compliance and integrity structure, effectively have a structured and integrated process for managing corporate risks, and have an internal control system that maintains risks at acceptable levels, aligned with the organization's risk appetite.

Therefore, over the last 15 years, our mission has been to support and help organizations to make “this journey”, offering simple, intelligent and specialized management solutions, to strengthen the foundations of governance, risk management and internal control system. , thereby increasing the customer's ability to reach higher levels of competitiveness, sustainability and longevity.

All of our solutions, whether diagnosis, structuring, mentoring, implementation of best governance practice activities, or support in creating an environment that promotes governance culture and awareness, are developed, individually, especially to meet the needs demands of our customers.

As a definition, we always look for simple and most effective solutions, considering the operational complexity and cash generation dynamics of the corporation. Also, in our solutions, we work on instrumentalizing the client's team so that they can lead on their own, without the need for consultancy to be present.

In 2012, with the aim of offering international level professional training and certification, we became an affiliate of ICI – Internal Control Institute, an American organization whose objective is to develop professionals specializing in internal controls, for Portuguese-speaking countries.

We also believe that for management within the concepts of best governance practices it is necessary to have prepared professionals, with skills and capacity to apply these best management practices, and in 2014, Crossover Business School was born, with the aim of providing training of high quality for the development and training of professionals.

We have just been listed by CIO Review as one of the 10 companies in Latin America that are at the forefront of providing risk management and business transformation services, which makes me very happy that Crossover is recognized for the quality of its services .

Today, after more than 600 corporations served, more than 500 training sessions carried out, with more than 5800 students participating in our training, I can only thank our students, clients and friends for their trust in our services and courses, and none of this would be possible without the professionalism and dedication of our staff, consultants and associated instructors.

Now our next challenge is to consolidate Crossover in the American market, and with this, in addition to helping American companies, it is to provide international development and training programs for Brazilian professionals, combining what is good in both countries. Wait for the news for 2024!

We are here to help you and your corporation on this journey! We have fifteen years of experience, delivering intelligent and customized solutions to meet the demands and needs of each of our clients.

You can continue counting on Crossover!

The future of the auditor - The Gardener of Governance

 We have been talking a lot about the future of internal auditing, but in reality we should talk about the future of the auditor, because in essence auditing in its concepts will not need significant changes for its existence. 

On the other hand, the auditor must change his "mindset" if he wants to continue being an auditor. The metaphor about "Gardener of Governance", brought by Dr. Rainer Lenz, is a good start for us to understand how to prepare for this change, which, those who haven't started yet, are already late.

“We need to be more like farmers” and sees the auditor as respectful of nature, concerned with creating the right environment for plants to grow, due to climate and soil conditions. Internal auditors must sow, fertilize, water and nourish the plants, continuously check the weather forecast and adapt the fertilization of the plants accordingly.   Occasionally weeding, all done patiently and humbly, but also results oriented and focused. Internal auditors work indirectly and therefore their impact is through others."

In a process of corporate change as we are experiencing, speed, proactivity and protagonism are essential attributes for all professionals who want to maintain their employability, and for the internal auditor, as well as for the specialist in internal controls, it is no different. 

In my last position as CAE, the metaphor they used for auditing was "Keeper of the keys to Hell's Gate", but that, as we know, is in the past. Jack Welch always said that "Change before it's necessary, then it's too late" 

Be Happy! 

#future #mindset #employability #internalaudit #internalcontrols #inspiringpeopleforinnovation

Corporate governance and integrity programs, are they a fiction?

 

With each case of corporate rupture that is published in the media, there is always questioning about the effectiveness of the governance structure and its compliance programs, including the integrity program.

The main question concerns how the violation of the corporation's moral values materializes in a company that demonstrates that its structure has governance policies and programs, required by law and regulations.

How its happen in companies that report having state-of-the-art structured compliance policies and integrity programs, some with certificates from important institutions, where, in some cases, specialist employees participate in industry events lecturing on the quality of their programs of combating corruption, bribery and other wrongdoing. How do these violations occur?

Not to mention, for sure, how come the risk management system and the internal control system, as well as the internal and external audit, if applicable, did not detect this violation of moral values?

Of course, the answer is not simple, because, each case is a different case. The root cause of the violation can have several components.

However, one of the causes that is present in almost cases is the lack of commitment and true attitude, on the part of management, in relation to all these governance requirements, and their moral values.

It is as if, all of this were mere “bureaucracy”, in the negative sense of the word, and that this whole structure and policies only serves to show the market, society and regulatory bodies that the company is in “compliance”.

It is important to point out that one of the causes is centered on the condition that companies and specialist professionals focus a lot on the form, but forget the essence. They forget that it is not possible to only have compliance policies and integrity programs, if there is no attitude, awareness and organizational culture for this to be true.

As much as we live in a digital age, where automation is increasingly part of organizations, it is necessary to understand that companies are still driven by people, who do not act by algorithms, but by their emotions, creeds, knowledge, goals , vision of life and logically, for its ethics.

Greed, winning for the sake of winning, selfishness, are also part of people's attitudes, and logically, organizations need to take all these attitudes into account in their governance process.

The effectiveness of governance, compliance and integrity depends on having ethical people who are truly in line with the company's moral values.

Management, including HR management, must prioritize that the people who are part of company's staff present, at least, the following attributes:

Willing

It refers to the individual choice to always do the right thing. It focuses on the certainty that, among the existing options for action and decision, in the process of achieving objectives, the choice will always be the one that best suits the moral values of the corporation.

Responsibility

It is based on the responsibility to always choose and/or keep what is right. It is to recognize the responsibility it has to continuously promote, through behavior that actions and decisions must always be aligned with the values of integrity of the company.

Commitment

It is the individual engagement and involvement in always doing what is right, regardless of the obstacles, and the contrary forces involved, without exception. Commitment is demonstrated by daily attitude and behavior.

Accountability

The individual must always transparently assume the consequences of his acts and/or omissions in relation to what is right. He must act with diligence and timely report any act of violation of the moral values of the corporation that comes to his knowledge.

In my opinion, governance structures, compliance and integrity programs will only be true and effective when corporations recognize the importance of applying good management practices in conducting their business, by people who are truly willing, responsible, committed and diligent in carrying out its activities within what is right.

As long as companies do not excel in having people with ethics aligned with corporate moral values, everything that is said about governance, compliance and integrity will continue to be a great fiction.

Finally, I always like to remember that in the chaotic world we live in, simplicity within corporate activities is a competitive advantage, even when dealing with a complex topic like this one, however remember that simplicity is not superficiality!

Be happy!