At a glance
Benson Yu, internal audit manager ANZ at BlueScope, an international manufacturer of painted and coated steel products, faced a familiar problem in 2022 – the need to fill a job vacancy for an internal audit role.
Yu was not convinced that hiring the same kind of people – with the same skills – was still the best choice for his internal audit team, so he opted to look beyond the traditional accountancy skill set.
Complex systems and technologies dominate business today, and new organisational and governance structures have begun to emerge in multiple sectors. Although common in healthcare settings, multidisciplinary team models are still a source of debate in the accountancy and audit professions.
Research suggests that it is unrealistic to expect auditors to be across the entire legal, technical and organisational canvas without input from experts in other professions, and that there is an “expectation gap” between the auditor’s role and stakeholder expectations.
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In the case of BlueScope, Yu believed that his team needed more operational knowledge and data skills. Many businesses would default to hiring a contractor to fill the knowledge gaps outside of accounting and auditing areas, but Yu chose another option.
In consultation with HR, he put the job out to market. Yu also approached BlueScope’s operations team to find out if there was someone internally who might be interested in working in internal audit – and there was.
“I found a chemical engineer who had been with BlueScope for 15 years, always on the production side. He felt stuck and wanted a new challenge. The interesting thing was that during the lockdown, he self-studied coding – and he was very strong in data science,” Yu says.
The candidate did not have traditional accounting and auditing skills – interviewing experts, telling stories about numbers and drafting audit reports were not his strong points – but Yu realised that he could coach the candidate in these areas.
The risks of hiring “an outsider from within” could be reduced by hiring a colleague, Yu says, because they are a “known quantity”. Yu could be certain that he was hiring a high‑performing employee who is eager to learn.
BlueScope is a complex business with upstream, mid-stream and downstream operations, all vertically integrated. Yu says that if he had hired a general auditor with manufacturing knowledge from outside the company, it would have taken them about three years to fully grasp the processes at BlueScope.
“With the internal appointment, I have a colleague who already knows the business inside out,” Yu says.
Professor Denise Jackson, director of work‑integrated learning in the School of Business and Law at Edith Cowan University, says that having people come into a business with fresh perspectives – who can critique how things are done – can help organisations innovate and improve.
“It’s good for employers to realise that they are not going to get everything in one person when they recruit, particularly in this economic climate, but there are challenges. A business may bring in someone with the technical skills, but underestimate the softer skills, which can be harder to develop,” Jackson says.
For an internal audit team like Yu’s, otherwise populated by seasoned accounting professionals, recruiting someone with no finance background may make your existing team feel as though their skills are devalued, says Jackson.
Strong management skills are critical here, says Jackson. “Teams work most effectively when everyone feels they can make an important contribution. It is about having diverse individuals complementing each other and reassuring people that by working together, you can achieve more.”
Yu admits he has faced some scepticism, and some are yet to be convinced. Still, he believes short-term anxieties are outweighed by the uplift in operational knowledge for the team as a whole, easier access to vital information and the improved business insights from advanced data analysis.
“Our new colleague has a network established, so when we visit a site, it is easier to approach people and ask questions. He is also on hand with an answer if we have questions, such as ‘How much coal or iron ore is being used?’,” Yu says.
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The appointment has created “a wave” at BlueScope, which has increased interest among its workforce about the role of internal audit and finance, says Yu. The appointment has also demonstrated that the company is forward-thinking and flexible about the opportunities available to its employees.
The bottom line, Yu says, is that BlueScope is determined to transform itself.
“We need to find a different way to do the audit, and we need to have experts in different areas. Our new colleague is a different “animal” – he’s not put off by large amounts of data and is hungry to analyse. With new stuff coming out every day in technology, we need to keep ahead,” Yu explains.
A recent paper from the International Ethics Standards Board for Accountants (IESBA) argues that the multiple skill sets within diverse teams elevate the status of internal audit and finance within a business.
In large organisations, accountants rarely get involved in technology adoption or development beyond scenario analysis, KPIs or forecasting specific to the technology’s financial impact.
According to IESBA, accountants need to be “part of the conversation on strategic value creation because of their important bridging role across business units” and for their “business acumen, professional judgement and ethical oversight”.
Diversity = Quality?
Accountancy Europe (AE) represents 50 professional accounting organisations from 35 European countries. AE’s ongoing priorities for auditors – to achieve the highest audit quality, serve the public interest and compliance with independence, and adhere to ethical requirements – will hinge on building effective multidisciplinary teams in the future.
In a rapidly changing and complex business environment, auditors depend on other experts, scientists, engineers and actuaries to supplement their skills to provide the highest quality audit of financial statements, AE says.
Mark Babington, AE member and UK regulator, says that global corporations are using top-level experts to advise them, which means, “the audit firm has to be equally sure that it has sufficient firepower to be able to properly challenge management and their assumptions”.
Philip Johnson, a former senior audit partner at Deloitte UK, says that “firms want to show – to a potential audit client – the depth of expertise available to the audit partner within the firm.
“The details of the experts who will be called upon are included in the tender documents. In many instances now, the firms name these experts and often bring them to the audit tender meetings”.
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How do multidisciplinary teams work?
While the concept of multidisciplinary teams is gaining footing, organisations may be wondering how to initiate collaboration. What are the respective roles and responsibilities of the auditor and the expert in an audit engagement?
Involving experts early in the planning phase of an audit is key. Anita Fanita, Romanian auditor and AE member, says taking a risk-based approach can identify areas where specialists are needed to help the auditors obtain appropriate evidence.
UK valuation expert Rachel Turrell says the auditors drive the scope of what experts do.
“We will have initial consultations with them and discuss what we think the risky areas might be. This helps auditors to form their view on how much assistance they need from us,” says Turrell.
Two areas noted by the Europeans as the most prominent trends were the need for auditors to continue improving their skills in using technology and their knowledge on non-financial reporting.
A new mindset is required
Yu believes the biggest risk for businesses that do not embrace multidisciplinary teams is that they lose the opportunity to do things better – by doing them the “same old way”.
The multidisciplinary model requires a different mindset, Yu says.
“I know the power of diversity. We keep talking about it, but we never do it. Instead, we play safe and hire someone who has done similar things and just repeat what has gone before. In doing that, we pigeonhole people, limit their opportunities and remain static.”
Jackson agrees, and says that the professional associations can play a key role in fostering a different mindset among members.
“They need to champion the idea that diverse teams are a positive development and support them in moving away from a model where capabilities are divided and towards multidisciplinary teamwork.”