The role of audit manager can be a tricky one; managing the RI on one hand and the rest of the audit team on the other, not to mention the client! It requires a genuine all-rounder with skills across several areas. In this blog we’ll look at some of those key areas in which effective audit managers really stand out.
Whilst broad technical competence is necessary, it’s unrealistic to expect to be a technical specialist in all areas, and you don’t have to be! However, a good understanding of auditing standards is important. Audits are all different and off-the-shelf methodologies should only be seen as tool to aid compliance. They can only cater for so many variables, especially when it comes to group audits. Knowing what the ISAs require is necessary to effectively flex and tailor your approach to the needs of a particular audit and to focus the work effort in the most efficient way. A good understanding of the FRC Ethical Standard is also needed to ensure independence threats are identified early and, where necessary, addressed.
Whilst good financial reporting knowledge is clearly important too, understanding the limit of that knowledge is perhaps equally important. Encountering transactions or areas we’ve not come across before is an interesting part of the role and a key skill is knowing how to research and when (and how) to seek advice. If something doesn’t feel quite right, there’s a good chance it isn’t, and ‘gut-feel’ is also an important ally.
The audit as a project
“Failing to plan is planning to fail” is as cliched as it gets, but in the case of audit it’s true. A good project manager that knows the limit of their technical knowledge will fare far better than the technical genius without the project management skills. The usual rules apply: Get on the case early, have a timeline and get key dates in diaries. These include initial briefings, the team discussion, review time and client meetings. Even if things move, you’re better off with slots to move around than trying to find time out of nowhere.
Managing the RI
Yes, they’re more senior than you but yes, you do need to manage them. And, as with audits, they’re all different and effective communication is key. Understand how the RI works, factor this into your approach and tell them how you are going to manage them. RIs will likely have busy diaries and many other demands on them. The easier you can make their life in respect of your audit, the better things are likely to go. Communicating from the outset what you will need from them, and when, is key and asking early on if there is anything else they would like from you. Many problems between RIs and managers arise from an expectation gap. Eradicating that gap is a great place to start.
Getting the best out of your team
Liking someone and liking working for someone are not the same thing. A common mistake, particularly for new audit managers, is placing too much emphasis on being ‘liked’ by the team. This is often not easy, especially when it overlaps with the social aspects of work. Success here is again about clarity of expectations, enabling seniors and juniors to do their job, and providing support when needed. Being clear about milestones and deadlines and how (and when) you want to be kept updated with progress is the foundation for this and providing timely feedback on how things have gone is key to developing staff but also engendering trust. Scheduling an audit debrief as part of the overall project plan (and actually holding it) can be an effective way of achieving this.
Working with the client
The client is often the stakeholder relationship we feel we have least control over, and a client not delivering can scupper the best laid plans. Whilst clearly a challenging area at times, there are measures that can be taken across a portfolio to mitigate the impact of this. The mantra is definitely ‘prevention is better than cure’. And when problems can’t be prevented, the earlier they come to light the better chance there is of managing them. Relatively simple tactics such as the order of the records required listing and finding 15 minutes for a call that could save hours later are easy to implement. Sometimes firmer action is needed, and fee implications are very often what can ultimately change client behaviour. Navigating such challenges whilst maintaining a good relationship with the client can be a difficult balance but even small wins in this area can have a big impact on how well an audit goes.
Being an effective audit manager is as much about effective communication and project management as it is about technical skills. However, developing a balance of skills across these areas, and putting them into practice, is no mean feat. A manager I once worked for told me: “I’m not the strongest technically but I know that, and I know when and how to get input from others”. She was a great people manager and went on to be a successful audit partner and leader in a large firm and it was likely a breadth and balance of skills rather than excellence in one that enabled her to do so.
Join me on 7 June for an online workshop in which we’ll discuss the application of these skills to the challenges of being an audit manager.
Richard Hemmings, May 2022