We should audit ……
This title question is, without a doubt, a good way to begin to understand how effective or ineffective is the current way in which most approach the audit. When it comes to focus, we are talking about both the approach that clients, professionals and users make of the information that audits generate, both internal and external, and the way that auditors proceed to carry out their tasks.
Both external and internal auditors place a strong emphasis on the veracity of accounting data, as well as, and based on the above, on aspects related to the survey and evaluation of internal control. Internal auditors expand the spectrum of their controls to comply with both internal and external regulations of the organization.
The questions to ask are: how much does an organization's capital and future revenue stream decrease with the loss of customers and employees? How much future has a company whose majority income depends on products and services that are well advanced in their corresponding life cycles? How much is being invested in training, and research and development, and how does this affect or may affect the future flow of income?
If you own a property that generates a net income of $ 1,000.- and the rate of return for this type of investment is 0.875% per month, we will say that the value of said property amounts to $ 114,286.- Now, if we have a client who is lost due to problems with services or products that did not meet the specifications, and said client generated a monthly profit of $ 1,200.- for a monthly return of 5%, we are losing a client valued at $ 24,000.- The question is the next, if the property is lost it is informed and accounted for, while if the second is lost it is not even informed. Let's think about how important it will be for the owners or investors of a company to know that it has lost customers worth $ 1,250 after a year.000 (we are talking about lost clients and not bad debts). In this case, how would you analyze both the past and the future of the company?
The same should be noted regarding the loss of personnel. The capabilities they possess, and the company has lost due to their distance, added to the loss of productivity related to the particular learning curve for each of them, is not a minor issue. For some reason it is always said that the two greatest assets of an organization are the people who make it up and its customers. However, what little importance do they give to the auditors.
Or is it that investors will give the company the same value, with the staff that has already demonstrated its capabilities by putting it in its current position, as with a different staff whose capabilities are yet to be seen or discovered?
And when we talk about personnel, we are talking about managers, their creatives and researchers, and staff. It goes without saying that a high turnover of personnel generates significant losses by giving rise to new expenses for the selection of new members and their subsequent phase of training and training, added to the time necessary to achieve a minimum of productivity. Is this loss of productivity and its costs analyzed by the auditors? The answer, unfortunately, is no. Unless the auditor integrates the new trend of auditors oriented and focused on competitiveness and continuous improvement.
Traditional auditors are more interested in tapping or confirming expenses, than in knowing in which processes such resources were used. For this, let's see the following example:
| Concept | Amount | Concept | Amount |
| Electricity Workmanship
Fuel materials Amortization Total |
$ 200.- $ 1,000.-
$ 300.- $ 2,000.- $ 500.- $ 4,000.- |
Process Prod. "A" Reprocess Prod. "A"
Total |
$ 2,500.-
$ 1,500.- $ 4,000.- |
As can be seen, the information changes completely. Imagine this for a company as a whole, both for Senior Management, for the owners and for their creditors. As a banker, would you be willing to lend to a company with high levels of waste? And, if the answer is positive, at what rate and with what guarantees and other conditions?
In another order, a company where 95% of its income corresponds to products that are in Stage III of its corresponding Life Cycles, has the same value as a company where 70% of its income comes from products and services that They are in full growth of Stage II and they also have other new items in Stage I, which represent 25% of their sales. Who analyzes these circumstances? What role should auditors play in this? Many times chasing the Prudence principle to the limit, they end up generating recklessness in the third parties to the company.
We can accept a certain high level of formalism on the part of external auditors, but the lack of commitment of internal auditors cannot be accepted to the same degree. Let us simply stop checking and penetrate the processes and activities of the company, exposing its inefficiencies, waste and failures.
As investors and creditors, we demand better information from external auditors. The most recent events in the different stock markets of the world, and especially that of the United States, highlight the ineptitude of the procedures and policies followed by the main accounting consultancies.
The globalization of finances, and the impressive sums that come together day after day in the different squares of the world demand another commitment on the part of the auditors, be they internal or external. It is necessary to demand new and higher standards in information. It is useless for a company whose balance sheet is highly useful if it is systematically losing its most valuable assets, which are its clients and competent personnel. Someone must fill this information gap, if it cannot be covered by traditional auditors, as it is time to offer the market a new type of audit, an authentic audit for decision-making and risk analysis.
conclusion
Muy difícilmente cambie en el corto y mediano plazo las reglas que rigen la auditoría externa, por ello bueno es que los usuarios externos de las informaciones por ella suministrada sepan que el mejor balance poco o nada dicen sobre el futuro de una empresa, aún del más inmediato.
On the other hand, in the case of internal audits, without a doubt, the rules of the game should be changed, requiring internal users, such as senior and middle managers, and owners, information that really allows a genuine and clear knowledge of the state of company situation. Inform that the internal control rules are complied with or not, such as opposition control, or report the coincidence between the physical count of a certain good or input and its accounting exposure, or compliance with certain internal regulations, since It is not enough and it is of little use before him every day greater weight of other factors.
It could be asked if internal auditors verify the existence and quality of contingency plans, if risks are managed and how well or poorly they do it, if the competitive capacity of personnel is maintained (audit of training needs), if Statistical controls of the processes and different management ratios are kept. If the answer is no, it is good to start working to make internal audit a strategic activity.
Today, internal auditing should be in charge not only of verifying compliance with internal and external standards, business policies, and accounting, tax, labor and corporate standards, among others, but also with everything related to customer satisfaction, quality and productivity, and policies and actions regarding prevention measures and actions.
