International Internal Audit Awareness Month is a great initiative showcasing a profession that may not be as well-known as its accountancy peers but is home to talented and enthusiastic individuals, passionate about helping their clients or employers to improve the way they work; these people are known as Auditors. A big part of the ‘sell’ with internal audit is how it can add value to an organisation and with this brings the topic of these articles, “What is added value?”
Added Value – The Concept
Added value is a widely used term, not only in the world of internal audit, that will routinely be encountered when pitching for new business or applying for a new role for example. This term ‘added value’ is too vast to be explained in a few simple words; despite this – it is not uncommon to be asked how an audit’s recommendations add value to the recipient when presenting a report. Or indeed how “Internal Audit” will add value to the organisation.
If we are to assume that the processes of adding value to something or someone is to help it or them derive some form of additional benefit, then we must ask ourselves what could this benefit be? And how can it be measured?
Personally, I am a big fan of compartmentalising any potential benefits that an organisation or its staff could derive from the internal audit process into one of three categories: Time, Values or Money. A method taught to me several years ago when developing my pitching skills (thank you Michelle Lewis).
So the concept is that everyone assesses benefits differently and may not consistently be looking for the same benefit in everything. However, regardless of this fact all benefits will either:
- Release an individual’s time, or the time of their staff to perform other tasks.
- Help them to deliver against a value or set of values that are important to them or their employer.
- Provide a direct or indirect financial saving to an individual or Company.
In later articles I will explore each of these categories in greater detail and consider how or where these are most relevant in the world today. For now though – let’s assume that we all agree with the basis of the concept, how do we now apply this to answering some of the questions that we have been posed earlier in this article?
In the first instance it is critical to understand how the auditee or recipient of the report is assessing value. Therefore it is important to ask them what they are looking to achieve through the ‘adding of value’.
It is now a case of good stakeholder management, understanding their motivators and looking at how you can meet these whilst also achieving any wider aims or objectives. An individual stakeholder’s assessment of value may not always represent value for all.
Kevin Limn, Deputy Managing Director, TIAA