Keeping it clean
Auditing has long been a critical function for businesses. But now, more than ever, identifying and managing risk, and helping organisations achieve their objectives, are adding new dimensions to the profession.
Frances Leung, general manager of Bank of China Hong Kong's (BOCHK) group audit department, says her unit has undergone significant changes as compliance and regulatory requirements become more stringent. In addition to regularly reviewing internal audit results, her department has to respond to frequent requests from Hong Kong and mainland regulators for reviews of different areas of business operations.
"This supervisory trend signifies that the internal audit function is playing a more critical role across the banking industry," Leung says.
In addition to dealing with issues such as money laundering, Basel III and liquidity management, the bank's auditors have to adjust to different regulatory regimes as the bank expands across different geographical locations, Leung says. "We need to ensure our auditors have global perspectives and a forward-looking mindset so that we can advise and help the board and our senior management to act proactively against emerging risks."
Leung says internal audit offers excellent career-advancement opportunities. Generally, professionals with five or six years' experience will have acquired a broad range of knowledge that will allow them to move between different businesses and functions.
For example, senior-level audit professionals who can demonstrate outstanding leadership skills and all-round business acumen may be promoted to key roles such as chief financial officer, chief risk officer or chief operating officer. "There are also examples of our auditing staff becoming branch managers or corporate banking managers," Leung says.
BOCHK looks for candidates with finance- and business-related academic backgrounds when recruiting internal auditors. In addition, as technology-related expertise becomes an increasingly important part of the internal auditing roles, disciplines related to computer science are also relevant. "It is crucial to build up a team with a balanced mix of expertise and skills so that job responsibilities can be discharged appropriately," Leung says.
Internal auditors at BOCHK periodically undergo cross-departmental job placements, allowing them to build up multidisciplinary knowledge within the banking sector. "We also place emphasis on helping our internal auditors develop critical thinking and interpersonal skills," Leung says.
Peter Koo, enterprise risk services partner at Deloitte China, is another experienced industry practitioner who believes that the auditing profession offers rewarding roles for those with the right experience and qualifications. "We usually recruit and help employees to gain their professional accounting qualifications before providing additional specialist training, such as IT auditing training," he says.
Koo explains that with cybersecurity a growing concern among corporate leadership, clients are looking for help to improve their security infrastructure and analytical processes. To help combat hacking and other technology related threats, Deloitte staff train for additional specialist qualifications such as certified information systems auditor, certified internal auditor and certified fraud examiner. "Our team of professionals is equipped to offer both auditing and advisory services," he says.
While in-demand auditors may be tempted with job offers once they have gained their CPA qualification, Koo cautions young professionals to consider their futures before changing jobs. "If they stay with their employers once they gain their professional qualifications, young professionals can continue receiving vital training that will enable them to become industry specialists. This opens the way to even bigger career opportunities."
Christine Wright, managing director of Hays in Asia, says that with constantly evolving regulations and market conditions, internal and external auditors are highly valued, in demand and in short supply. "Over the past five years, the internal audit function has become increasingly valuable to organisations," she says. She adds that companies are seeking employees with leadership potential and the ability to work well in a variety of different environments and with a diverse range of colleagues and executives.
Wright foresees that with Hong Kong stock exchange (HKEx) proposals on internal audit consultations expected to increase demand for auditors, more pressure will be placed on companies that need to recruit and retain auditing professionals. The HKEx proposals include seeking enhanced accountability of the board, board committees and management by clearly defining their roles and responsibilities in relation to risk management and internal controls. "In an already candidate-short market, this will pose a real challenge for companies looking to recruit quality audit candidates," Wright says.
Furthermore, experienced auditors will be able to command higher salaries and employers will need to attract them with robust career opportunities and other employee-retention strategies, Wright says. This includes options to transfer into areas such as risk, front office and other corporate functions.
Victor Paraschiv, a senior manager with management consultancy Sia Partners, says fundamental regulatory and compliance changes, particularly in the banking and finance sectors, is creating career opportunities for those with auditing experience that are looking to join the consultancy industry.
"Traditionally, if you look at the sweet spot, it is people with three to five years of on-the-job experience who are ideally placed to join the consultancy industry," says Paraschiv, whose firm is looking to recruit audit and risk compliance professionals.
He says recruits with a few years of experience can benefit from comprehensive internal training and the exposure that consultancy work provides. "As consultants, we help our clients to examine and evaluate controls to determine if they are working as intended," Paraschiv says.
Meanwhile, Nicolas Tollie, a senior manager at Sia Partners, says the role of auditors will continue to expand due to changes in regulatory frameworks. "Auditors and people with risk and compliance backgrounds are needed to help clients with their requirements across the entire business and operations process," Tollie says.