Audit - Time to add value

I should have perhaps titled the article - Audit - What Value? In a recent presentation I did on behalf of the South African Chapter of ISACA (Information Systems Audit and Control Association), as is my provocative bent, I challenged the group to review the value proposition offered by the audit function, not only IT, but all the elements of good governance.

Where there is a legislative framework in place that forces companies to use a service, its inevitable that a certain amount of service ethic falls by the wayside (Why should you when companies are forced to use your services anyway?). This in turn effects value delivery. Given that the current global economy is shaky, the focus on cost and value is now suddenly at the top of the board agenda. If good governance was the order of the day, and boards actively practiced their duty of care, this would already be a way of life!

However, back to the point. The days of an audit firm attaching itself like a bloated leech to
a company at year end, and completing the required audited statements in a detached fashion, without actively contributing to the good governance of the entity, are over.

Shareholders and boards should view this kind of activity and behaviour with circumspection and downright suspicion. After all, you pay a fortune for the service, and for what - to rubber stamp? Why not go to the CA down the road and do the same thing at a fraction of the cost? Better still, force your board to instill good governance at source, it will save you a lot in the long term.

This is not a singling out of auditors in anyway. We should apply the same rigour when selecting any vendor or service provider. We should look for value, we should question the return on investment and we should look to it supporting our strategy and sustainability. Above all, we should look for practical solutions that fit our market and culture. Why should we not expect the same from the audit function?

The challenge is for auditors to look inside of their own organisations and develop a value proposition. Why would I look to you as a valued partner? What makes you different and why shouldn't I use the CA down the road?

Shareholders and boards are well advised to rethink their relationships with their partners, and Auditors are no exception.