Has anyone ever sent a memo to employees stating something to the effect that the purpose of audit is to help impove efficiency and strengthen the bank as a whole...not to personally attack employees for whom audit findings 'target.' I am looking for some verbiage as such...to promote the fact that audit is a good thing, here to help, and not personally attack. thanks.

I'm not sure exactly what your situation is or if you're responding to a particular situation, but if you are trying to drum up some positive PR have you consider to something like a small info brochure, or a spot on your banks intranet site? I would not even address the negative things associated with audit, but instead maybe come up with (or publish) your department's mission statement, explain what you do and why you do it, and emphasize that you are there as a partner. We are working some of these things right now. We are putting bios on our intranet site and a few other things...trying to drum up some positive PR.

Hope that helps a little

~Kelli

And I usually point out the fact that if I find it first, so much the better. Better me than an examiner, I say.

You can try to put this in a memo, but it has taken me a great deal of time to try and explain and teach those that I audit that I am on the same team as they are. DC said it best, better me than an examiner...

Also, when doing an exit interview, I try to always convey that I am not out to attack them personally...

Good luck.

I think the better question is, "Why does everyone hate the Audit Dept?" Ok, so most of these answers are obvious , but what could you do differently to make it less painfull for everyone? Good PR is great, but actions speak louder than words.

I think that if you build a good working relationship with your co-workers, then trust and respect will follow. Instead of just writting them up or going through your workprogram, offer ways to improve their department. Show them that you are on the same team and you are looking out for the bank's best interest.

I also find ways to praise (if possible), so that the whole report is not negative. I know this is sometimes not possible, but a little goes a long way. Just like with your own employees, you should praise publicly and criticize privately. Yes, your audits go to the Board, so they aren't that private. However, don't go blabbing all over the bank about what you found in Joe's Dept. Remember that the results are on a need to know basis.

Picking your battles goes a long way. Some things are worth telling and not writting and others deserve volumes.

Anyway, we've all been in your shoes. I wish you luck.

I wouldn't waste your time on such a memo. It takes someone with broad shoulders to do what we do. It helps to have the support of the BOD and senior management. You will earn the respect you deserve as time goes on. I don't get paid to make people like me, but I always make a effort to as polite as possible.

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It takes someone with broad shoulders to do what we do.

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That's why I wear my hockey equipment to work.

Seriously though, I think Lin is right. Time, politeness, and support of mgmt and BOD are your best allies. If you don't have that, a good cross-check into the boards also works pretty good.

Oh, and a sense of humor goes a long way. Remember to not take life too seriously, it isn't permanent.

I always think it is a hoot to see the look on an officer's face when I peak in their door and ask them if they "have a minute"! I take my job seriously but I don't take myself so serious that I forget to inject a little humor into the whole process!

I agree with Lin. I understand why people don't appreciate the audit function. Audit is checking their work. I know that I didn't appreciate the loan review function when I was a loan officer. That experience though helped me understand and I try to approach loan review in a different way. I am not in the "gotcha" business. I am trying to protect the bank and the lenders by finding issues early before they become problems.

I hate you Chuckie.

Internal audit is new to our institution. And guess who is the new internal auditor (and new compliance examiner)? Yes, me. Since this is a new position-all the loan officers and processors take offense when I find something wrong with their files. How do you politely explain what has been said in other replies, better me than examiners? And that I'm working with them, not against them? And that we're all on the same team? Especially the loan officer who was "temporary compliance officer". She takes offense to everything I say and trys to turn it around on me, but she didn't want this position. Help!

All of the above will benefit you, especially the remarks about it taking time for the rest of your bank to evaluate you.
Fair, rational, positive, and objective assessment of their risks and their controls for those risks will go a long way.

Here's my 2 cents worth (put the check in the mail please):

1 - Never submit an audit report when you haven't taken time to talk to the department head while it's still in draft form. You might have made a mistake that you'd rather find out about while you can still check it and correct the report without a lot of embarassment on your part. If the department head blows you off or doesn't respond, then submit it as final, but keep a copy of an email where you've sent the draft and asked to sit down and discuss it. If nothing else, you'll come across as understanding that you have the ability to make a mistake.

2 - Deal with the most senior person managing the area you've audited. Let that person handle the people working in their area - your job is to audit, not manage.

3 - If you can't get a written management response from senior management, you can bet things aren't being corrected. Since your audits should be risk-based, this adds to the risk in that area. If lack of response to audits is part of the accepted culture of your bank, talk to your audit committee or the CEO -- lack of timely response to audits is a big red flag to examiners and it'll hurt the management rating. You can't force management to give you timely responses, but you can bet the the CEO and audit committee can get them - and they will if they understand that part of the CAMELS rating depends on timely response to audits.

4 - Make sure you maintain a friendly relationship (as in chatty and comfortable) with the tellers, the operations people, the loan processors, etc - they're a gold mine of information and they don't always know it. The information you can get in a casual conversation is a big help. For example, I saw where branch managers were signing off on monthly checklists that they'd checked the bait money and changed the date on the straps (one line on a long checklist that our Operations Officer requires them to sign). I was talking to one of the tellers at one of the branches one day - leaning on his window chatting when I said "Hey Dave - what's the current date on your bait money?" - his response was that it had been at least 6 months since anyone had even looked at it, so he was guessing October but that they kept the bait money loose so that there wouldn't be a problem with dates. Casual conversation kept going with a shift to another subject, but then I knew that the branch manager wasn't doing what she was signing off as doing, I knew that she had changed the bait money procedure on her own, and I knew that she wasn't checking the serial numbers to make sure it hadn't been accidentally given out. Dave didn't know that he'd just given me 3 pieces of audit info. When I wrote the report, I'd checked 2 or 3 tellers at each location - he wasn't in trouble with his branch manager because she had no way of knowing that it was her teller and her branch that tripped that portion of the audit.

5 - When you write your audit reports, consider adding a section showing what the typical internal controls are for that area and why they are standard controls. That gives you a basis to discuss the controls that are in place in your bank, how they're working and then you've provided a basis for your recommendations.

6 - Keep the tone of the reports totally objective and neutral. Don't let your word choice put the recipient on the defensive - if you haven't been able to get their attention with previous audits, you can send them a draft audit report with a pretty feisty email but never forget that the examiners are your ultimate audience. Document for them - if you have an email exchange discussing the report or discussing their lack of response to the report and the ramifications of the examiners seeing the audit report with no response, KEEP IT. That's how you cover your @$$ when you're dealing with an idiot in senior management. Make darn sure that if you've got a significant finding, you gradually take it up the ladder requesting a response - you've got a reputation with the examiners (or will have) - keep that reputation intact. There's nothing wrong with keeping copies of those emails with the audit reports if you aren't getting good response from management.

7 - If you see something that's working really well, comment on that in your audit report. It's a great way to let management know that you see the good stuff too. And you can bet that whomever you caught doing something really well will hear about it from their manager.

8 - Remember that no matter what you find, it's most likely an honest mistake - don't get pissy about it. You'll have the odd occasion when you're going to have to get feisty about something you find - you'll get farther if that's not your normal approach. Is that always easy? No way - this job is going to make you really mad some days. Figure out how you're going to keep a lid on yourself so that the rest of the staff sees you as friendly, objective, easy to get along with and above all, easy to talk to.

9 - If someone slips you a piece of info that you know needs to be caught or verified by an audit, protect their identity and just make sure you catch that particular piece in the scope of your audit. If someone tips you to something that you wouldn't have caught on your own, get them a pair of movie passes or something unnoticeable to anyone but them -- make them feel appreciated for tipping you off. And remember - if you ever burn someone for tipping you on something you might want to take a look at? You can bet you'll never hear anything else.

10 - Make sure you've got an open, easy-going relationship with the audit committee and the outside directors. If you've got a retired banker as a director, they can be a good person to bounce something off of - that audit committee is going to serve as your shield if the fire gets big enough because they're the ones who get to pull out their checkbooks and pay the fines that they're trusting you to shield them from. Make sure you know what you're going to do and who on the committee you can trust if you smell a rat in senior management. Make sure your audit committee has an audit charter that allows them to obtain outside legal counsel without consulting the board.

Most of the time this job is pretty straightforward - if you get along with most everyone most of the time, it's going to be a lot easier on you. Once in a blue moon, you're going to think you've earned a year's salary in a single day - those are the days that your mom never warned you about, but if you spend enough time in internal audit, you're going to have those OH $#!T!!!! moments. My CEO and I sat down the day I started working here and discussed who the outside directors were and how to get hold of them if I had a problem with an insider - and my CEO brought up the subject before I did - told me a whole lot about the tone from the top. If you can document that information (and make sure it's in something the examiners see), it tells the examiners that you've thought about the possibility and have a contingency plan for the worst things an internal auditor can trip into.

Good luck - it's a pretty fun job most of the time!

Wow! That is some awesome advice! There is wisdom in those mountains.

I've learn several of them the hard way (as I'm sure we all have). Other things I've had to learn and other pieces of advice -

You don't have to be perfect and the world will not end if you miss something.

Yes, it is good to have big shoulders, but you don't have to carry the world on them.

If you can't get a response from management, they look bad, not you. You've done your job. Remind them of this, but in a half joking kind of way. Works for me.

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2 - Deal with the most senior person managing the area you've audited. Let that person handle the people working in their area - your job is to audit, not manage.

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Respect the chain of command. You forget this once and you will never forget again.

Be confident in your abilities, but remain humble. You obviously know something or Mgmt wouldn't have picked you. If you don't respect yourself, they won't either.

Be a leader and proactive, not a follower and reactive.

Your learning curve is huge, but don't get overwhelmed. No one will fault you if you say, "I don't know, but I'll find out." Just make sure you do and report back in a timely fashion.

Remember who your customers are and provide them with good customer service. I'm talking about your "internal customers."

Good luck!

There's wisdom in that oil can too, Ed!

One more - consider getting an internal audit certification. ICBA has a great audit school for community bank internal auditors -- in 2 weeks, you'll learn a lot, get some good tools, meet a bunch of contacts that you'll probably stay in touch with - and it won't hurt your credibility with either you or your boss.

Audit is a new position here...I was hired to set up an audit shop on March 7th. According to the IIA May is International Internal Audit Awareness Month. (I know it sounds incredibly cheesey) But my HR girl is putting an article in our May newsletter stating the fact that it's IIAAM and that we now have an Internal Audit Program and a brief explanation of what it will be doing.

I'll let you know how well it works.

The only way there will be cake is if I bring it. But I do make a really good chocolate pudding cake with chocolate chip frosting...yummm!

Years ago, one of the banks in our company automated the reconcilement of their outstanding checks (cashiers checks, expense checks, etc.). But they also continued to manually reconcile them every month, because they had always done it that way. I recommended that they rely on the automated reconcilement (which worked just fine) and stop manually reconciling them. They gladly agreed. At the next Audit Committee meeting, management commented that this was the first time an auditor had recommended that less work be done, and they were pleased to be able to use the time saved for more productive things.

You have gotten some wonderful advice here. Relax and plug away. You will earn the respect you deserve in time, it doesn't happen quickly.

I always try to get to know the people I'm working with. Be friendly but don't become too chummy with anyone as your independence and objectivity may be questioned.

I, formerly having been a loan officer, before transferring into compliance/internal audit, have been friend with fellow loan officers for years..am not hearing.."Can't talk to you. You're the enemy." That really upsets me. I try to laugh it off, but it's true. We used to e-mail and call but since my transfer all has stopped on their end, which after a while of trying, has stopped on my end too. What to do?