Audit Leader Insights on COVID-19: Internal Audit Impacts & Working Remotely

In the early weeks of the economic upheavals and widespread transition to remote work stemming from the COVID-19 pandemic, AuditBoard’s Ben Lindner spoke with a group of San Francisco Bay Area audit leaders about how they have navigated the recent challenges. Learn how the pandemic’s effects have impacted internal audit, ideas for effective communication in a newly virtual workplace, and how teams are addressing the shift to work-from-home.

How Teams Are Addressing to the Work-From-Home Shift

When many cities and countries began enforcing quarantine and social distancing to slow the spread of the Coronavirus (COVID-19) pandemic, many organizations became work-from-home operations almost overnight. Everyone was concerned with the current situation, and I thought it would be helpful to bring some audit leaders together so we could share ideas for how internal audit departments have been addressing the challenges that have arisen. Several of those on the call graciously allowed us to share some of their insights and early lessons learned with the larger internal audit community also grappling with changes to the economy, their organizations, and their teams.

1. How has the pandemic impacted Internal Audit thus far, in your experience?

The full global economic ramifications of COVID-19 have yet to be seen, but audit teams are already working to help their organizations respond to key risks around growth, production, supply chain, and financial markets. Many of the audit leaders were revisiting their internal audit plans, and being flexible to reprioritize based on current business needs and an evolving risk landscape. With travel restrictions forcing a delay of any onsite activities, many departments were making a conscious shift toward consulting advisory work to help their organizations respond to ongoing and projected changes to their workforce and operations. 

From an audit plan perspective, we’re revisiting and re-prioritizing to focus on what’s most relevant, even if that means we may need to change or defer some audit projects we were originally planning. We’re also stepping into an advisory role to support the business as needed on impact of COVID-19 from an enterprise risk standpoint. Whether it’s making sure that all our workstreams have appropriate risk mitigation or helping different teams think through all the angles for what may be around the corner — we’re making sure that we are looking at things holistically.

— Carmen Lam, Head of Internal Audit at Slack

In terms of timeline, we are a July year end and we are in our Q3 right now. We’ve gone through the exercise to think through the controls that could be impacted or indirectly impacted given our current testing periods. That was something we were able to do proactively with our respective teams. I think we’ve benefited from having our quarter end at the end of April, so we are able to prioritize accordingly for the quarter and remainder of the year.

— Molly Watson, Director of Financial Controls at Stitch Fix

In light of COVID-19 and the speed at which it matured, how we measure the various quantitative and qualitative factors of ERM risk needs revisiting. Namely, “Velocity of Onset” will now become super important for management. COVID-19 has been a real “eye-opener” in understanding Velocity, and will change our perspective on prioritization of ERM risks. The one conclusion we’ve come to is that we will have to reprioritize some of our risks. Importantly, let’s ensure that we’re applying the right level of rigor to mitigate these newly reprioritized risks.

— CAE of a San Francisco Tech Company

For us, this isn’t business as usual, it’s business in the context of what’s just happened. One thing that’s been interesting for us — and probably for lots of people — is that you almost need a new plan each week since things are so volatile right now. It’s not really a matter of having a plan to deal with each new event, it’s asking how will you keep your planning flexible? One thing we anticipate is that this pandemic crisis is going to highlight areas of vulnerability that will be worthy of audit attention. It’s too early to say exactly what those are, but after we’re done putting out fires we can do a thorough “lessons learned” to ask how internal audit could better help you prepare to deal with this or something else that may occur.

— CAE of a Silicon Valley Tech Company

2. Have you changed how you communicate with Leadership during this time?

Many audit leaders in newly remote workforces have found that their style of communicating with leadership hasn’t changed, but they’re developing new methods to keep in contact with key audit stakeholders. Without the convenience of in-person meetups, audit teams are being more proactive in reaching out to process owners and business owners. It can be tempting to start a virtual meeting with shared frustrations about the current situation, but some audit leaders are seeing a shift toward getting down to business to make meetings more productive. Large online meetings can get off track quickly, but strong moderation is one key to staying on topic while ensuring all voices are heard. Effective communication is certainly possible in this new virtual workplace — but it may take additional effort and structure to achieve. 

One thing we’re doing a little differently now is making an effort to be even more proactive in reaching out to process owners. Of course you try to get as much updated information as you can through certifications and formal inquiries but we’re missing those informal conversations where you run into someone in the office and you find out about changes or updates. Lacking the accessibility of seeing people face-to-face has been a bit of a challenge.

— Scott Pfister, Senior Manager, SOX and Internal Audit, GoPro

“In my meetings with leadership, I’ve found it’s helpful not to repeat yourself with respect to the frustrations around the situation. There was a lot of commentary on the situation initially, but now it seems like people have started to tune it out. I think that people are jumping straight to the point very quickly, which makes meetings a lot more productive.”

— CAE of a San Francisco Tech Company

I wouldn’t say there’s been a big difference in how we’re communicating with leadership during quarantine so far. One thing we’ve been mindful about is the importance of moderating well when there’s a large group on Zoom. For instance, our SOX steering committee has over 20 participants — so at the start, I’ll make clear that I’ll be moderating the meeting, and make sure that everyone is getting their point across. We’ve found it’s helpful to have that moderator role to make sure everyone is being represented.

— Carmen Lam, Head of Internal Audit at Slack

3. How is your internal audit team addressing the challenges of working remotely?

The sudden transition to working from home has generated a range of challenges for audit professionals — working with kids and pets at home, collaborating with team members and stakeholders, and a shift from the cadences of office life to spending hours in front of the computer. Many of the audit leaders discussed ways they are providing flexibility and being mindful of team members with other demands during working hours. Virtual check-ins, online happy hours, and finding ways to play games or share funny things are just some of the ways audit teams have found to stay in touch while outside the office. There are also silver lining moments: opportunities to learn about team members or to further professional development with online certifications, licenses, or training to skill up in critical areas. 

For those of us with children, the daily question is now how do you balance what you need to do to take care of your child, but also deliver on your job responsibilities? For me, it has been accepting that I am probably not going to be at 100% in either capacity the way I normally would, because this is not a normal situation. During regular working hours, many of our team members are taking shifts to watch or homeschool children, so it’s important to be understanding if people have to be offline certain hours of the day. We’re looking for ways to be more flexible in terms of working hours, but also in terms of what we put on people’s plates. On the other side of the spectrum, we have team members with very different challenges of living alone during shelter in place. We don’t know how long this situation is going to last, so we want to make sure everyone feels supported and works in a way that is sustainable for them. It’s about helping each team member find their healthy balance in these new circumstances.

— Laura Mallers, Director of Technical Accounting, Compliance & Controls at Allbirds

As you might expect, here at Slack we do a lot of our communication via Slack. Our internal audit team has a Stand-up Channel that we use to keep each other updated throughout the day. Various teams also have a Water Cooler channel where we post silly things just to keep ourselves sane. Some of us host morning coffee chats twice a week where anyone can jump on Zoom and catch up with each other. We’ve also been doing a daily check-in where we go over things that are top of mind. Overall, I’d say what works for us has been a combination of using Slack channels along with Zoom to stay connected — as well as emphasizing the importance of making time for yourself so you’re not back-to-back-to-back in meetings all day.

— Carmen Lam, Head of Internal Audit at Slack

We already had a lot of people in different time zones, but now more than ever, when scheduling meetings with team members and business partners we’ve been asking whether a time works for them or if we can find a common time — really being mindful of other people’s working hours. Overall, we’ve really been enabled by constant communication. We try to think outside the box of your traditional kitchen talk to find ways to bring everyone together. Our Finance team uses Slack to do a morning poll with a fun fact about the team, or we’ll do an afternoon puzzle together. I actually feel like these activities have brought people closer than they had been previously.

— Molly Watson, Director of Financial Controls at Stitch Fix

My CFO has a daily standup with his staff, and it’s a time to talk about issues and make sure that the teams are motivated. So far I’d say people are very well connected, and I think our leadership is satisfied with the fact that we’re in constant touch with the teams. For me, I’d say my days are as busy as they would be if I were in the office — and perhaps sometimes busier because I don’t have to carve out as much time for lunch or for running from one meeting to the next. My overall view is that thus far, operations have been good and our people are motivated — but this is week three, we’ll have to see what it looks like in week seven or eight.

— CAE of a San Francisco Tech Company

These audit leader practices and tips were collected during the first weeks for newly remote workforces. In many organizations, Internal Audit has stepped into a strategic partner role providing valuable leadership and guidance for the organization to respond to the COVID-19 pandemic and continue to meet its business objectives. Internal Audit may also have a role to play in using lessons learned from this pandemic to help the organization prepare for the next crisis and reduce the stress experienced in a future emergency. As the pandemic crisis continues to develop, we will share our latest practices to help your internal audit team stay on top of the evolving situation.