Agile Auditing

Master new, disruptive technologies in the field of auditing

Agile Auditing: Fundamentals and Applications introduces readers to the applications and techniques unlocked by tested and proven agile project management principles. This book educates readers on an approach to auditing that emphasizes risk-based auditing, collaboration, and speedy delivery of meaningful assurance assessments while ensuring quality results and a focus on the areas that pose the greatest material risks to the business under audit.

The discipline of auditing has been forever changed via the introduction of new technologies, including:

• Machine learning
• Virtual Conferencing
• Process automation
• Data analytics

Hugely popular in software development, the agile approach is just making its way into the field of audit. This book provides concrete examples and practical solutions for auditors who seek to implement agile techniques and methods.

Agile Auditing is perfect for educators, practitioners, and students in the auditing field who are looking for ways to introduce greater levels of efficiency and effectiveness to their discipline.

Tables and Figures

Foreword

Preface

About the Authors

Raven Catlin

Ceciliana Watkins

Acknowledgments

Introduction

List of Acronyms

Part I: Building an Understanding of Agile and Auditing

Chapter 1 What Is Agile?

Agile Is a Framework

Definitions of Agile

The Agile Manifesto

Agile Frameworks

Scrum Framework

Scrum/Agile Roles

Scrum Artifacts

Scrum Activities (Scrum Events)

Recipe: Explaining the Concept

Nuggets

Chapter 2 What Is Audit?

Defining Audit

Types of Audits

Internal Audits

Government Audits

External Audits

Audit Customers

Knowledge Areas for Auditors

Governance

Risk

Control

Finance/Accounting

Technology

Compliance

Skills for Auditors

Audit Project Life Cycle

Phase 1: Initiation/Starting the Project

Phase 2: Planning/Organizing and Preparing

Phase 3: Execution/Carrying Out the Work

Phase 4: Closeout/Completing the Project

Traditional, Waterfall Audit Process: A Real-Life View of the Problems

Identifying, Assessing, and Responding to Delivery Risks

Recipe: Building Auditor Knowledge and Skills

Nuggets

Chapter 3 Traditional Audit Processes and Practices

Audit Jargon

Traditional Entity-Level Audit Planning

Traditional Audit Engagement Planning

Traditional Audit Engagement Fieldwork

Traditional Audit Engagement Reporting

Nuggets

Chapter 4 What Is Agile Audit?

The Journey of Agile Auditing

What Is Agile Auditing?

Overview of the Agile Audit Process

Skills for Agile Auditors

Nuggets

Chapter 5 Why Agile Audit?

Avoid the Jurassic Auditor

What’s Your Why?

Who Is Using Agile Auditing?

Starting Your Agile Auditing Change Transformation

Agile Audit Frameworks

What Are the Benefits of Agile Auditing?

Can Agile Auditing Help Me Solve Problems in the Audit Process?

Nuggets

Chapter 6 Creating the Agile Mindset

What Is an Agile Mindset?

Build a Passion for Being Agile

Start with Auditor Self-Assessments

Do I Need to Call It Agile Auditing?

Recipe: Getting Auditor Buy-In

Nuggets

Part II: Implementing Agile Auditing

Chapter 7 Implementing Agile Auditing: Deciding Your Approach and Your Agile Audit Project Roles

Choosing Your Implementation Strategy

Full Agile Strategy

Pilot Agile Strategy

Agile Lite Strategy

Dealing with Titles

Product Owner

Scrum Master

Delivery Team Members (Developers)

Dealing with People Challenges

Nuggets

Chapter 8 Implementing Agile Auditing: The Audit Planning Process

Nontraditional Audit Planning (Agile Audit Planning)

Dynamic Risk Assessments and Audit Planning

Data-Driven Risk Assessments and Audit Planning

Risk Universe Prioritizations and Audit Planning

Product Backlog

User Story

Epic

Recipe

Nuggets

Chapter 9 Implementing Agile Auditing: Planning Agile Audit Engagements

Planning Agile Audit Resources

Agile Audit Planning Steps

Step 1: Hold the Sprint Planning Meeting

Step 2: Agree on the Definition of Done

Step 3: Agree on the Definition of Ready

Step 4: Determine Your Project Tasks and Create Your Taskboard/Sprint Backlog

Step 5: Prepare the Project Canvas and Other Planning Documents

Agile Jargon

Using Agile Auditing to Solve Engagement Planning Problems

Poor Time Budgets/Estimates to Complete Audits

Nuggets

Chapter 10 Implementing Agile Auditing: Executing the Agile Audit

Testing with the Audit Client

Workpaper Documentation in an Agile Audit Environment

Managing Scope Creep

Audit Findings

Using Agile Auditing to Solve Engagement Execution Problems

Nuggets

Chapter 11 Implementing Agile Auditing: Communicating Agile Audit Results

Report Writing

Daily Meetings to Communicate “Bugs,” Deficiencies, and Findings

Sprint Review

Do I Still Need a Report?

Sprint Retrospective

Using Agile Auditing to Solve Engagement Communication and Reporting Problems

Nuggets

Part III: Special Considerations

Chapter 12 Agile Auditing in the “New Normal” Environment (Remote Auditing)

The New Normal

Existing Technologies

Virtual Conferencing

Data Analytics (DA)

New Technologies and Agile Audit

Robotics Desktop Applications, Robotics Process Automation, Machine Learning, and Artificial Intelligence

Issues to Consider When Implementing These Technologies

How Are These Technologies Affecting Audit, and How Can We Use Them to Become More Agile?

Recipe for Starting DA

Nuggets

Chapter 13 Lean and Agile Auditing

What Is Lean?

Eliminating Waste Using Agile Auditing

Nuggets

Chapter 14 Exploring Kanban Agile Auditing

What Is Kanban?

When Can I Use Kanban?

Kanban Principles Applied to Agile Auditing

Managing Workflow, the Kanban Way

Nuggets

Chapter 15 Merging Risk-Based Auditing and Integrated Auditing with Agile Auditing

Stop Creating Kitchen Sink Audits!

What Is Risk-Based Auditing (RBA)?

Extreme Risk-Based Auditing

Can I Still Complete Integrated Audits in Agile Auditing?

Nuggets 152

Chapter 16 Building the Auditor Toolbelt and Self-Managing Agile Audit Teams

Agile Auditing as a Tool

Skills Needed to Be an Agile Auditor

Becoming an Integrated Auditor in an Agile Audit World

Using Scrum Values to Create Self-Managing Agile Audit Teams

Benefits of Dealing with Self-Managing Teams

Cautions of Dealing with Self-Managing Teams

Nuggets

Chapter 17 Preparing Your Organization for Agile Auditing/Creating the Agile Culture

What Is Culture?

Changing Others’ Perception of Auditors

Participatory Auditing

Influencing a Culture That Supports Agile Auditing

The Influence of the Grateful Agile Leader

What Do You Want for the Other Person?

What Do You Want for Yourself?

What Do You Want for Your Relationship with the Other Person?

Ideal Conditions for Agile Auditing

Nuggets

Chapter 18 Passing Your Quality Assessment Review in an Agile Audit Environment

Government Auditors

Internal Auditors

External Auditors

Agile Auditing and Your QAR

Audit Independence and Objectivity: Working with People over Processes and Tools

Audit Planning: Doing What’s Right and Adding Value over Following a Preset Inflexible Plan

Audit Documentation: Providing Relevant and Timely Insights over Extensive Audit Documentation

Audit Report and Supervision: Client Collaboration and Relationship Building over Audit Report Negotiation

Nuggets

Chapter 19 Nuggets for Agile Audit Success

Appendix A Glossary of Terms

Appendix B Product Backlog Template

Appendix C Agile Audit Example

Bibliography

Index

RAVEN CATLIN is a veteran audit practitioner and Founder and CEO of Raven Global Training, an organization that provides custom training to business professionals in internal audit, internal controls, risk management, data analytics, and governance. As a member of the Institute of Internal Auditors and the American Institute of Certified Public Accountants, she advocates for continual improvement in audit practices.

CECILIANA WATKINS is Founder and CEO of Team Oriented Solutions and a trainer in risk management, internal audit, and Agile project management. She previously served as an online course facilitator for Boston University, a trainer and facilitator for Raven Global Training, and the internal audit division manager for a large state government agency.

Traditional audits are replete with performance problems that can cause delays in completing audit work and delivering time-sensitive information to audit clients and stakeholders. Although the auditing industry has been slow to adopt it, the Agile framework is ideal for increasing the speed, accuracy, and efficiency of typical auditing engagements.

In Agile Auditing: Fundamentals and Applications, an expert team of trainers, practitioners, and authors in the risk management and auditing fields delivers an actionable and flexible set of solutions for anyone looking to adopt some of the most groundbreaking and disruptive technologies and strategies in auditing.

From artificial intelligence to machine learning, robotics process automation, and data analytics, the authors walk you through how to conduct audits better, faster, and more reliably. You’ll discover in-depth insights from over a dozen audit shops that have applied Agile auditing to improve their results and efficiency.

The book also includes practical discussions of how internal audit departments, including those in government agencies, can become more Agile in their work and how to successfully plan Agile auditing engagements using tried-and-true Agile methods like daily scrums, backlogs, and Kanban cards.

You’ll learn how to merge risk-based auditing and integrated auditing with Agile frameworks and how to avoid the “kitchen sink” audits that frequently degrade efficiency and slow the delivery of actionable insights. You’ll also find out how to create an Agile auditing culture in your organization to ensure the changes you implement endure for the long term and are enthusiastically adopted by your people.

Perfect for educators, practitioners, and students in the field of auditing and risk management, Agile Auditing: Fundamentals and Applications is a must-read guide for anyone looking for ways to increase the efficiency and effectiveness of their auditing techniques.

Praise for AGILE AUDITING

“In Agile Auditing: Fundamentals and Applications, Raven and Ceciliana skillfully apply the Agile Manifesto principles and values to the auditing profession in a clear, engaging, and approachable style. As they translate the Agile principles to their profession, they masterfully and thoughtfully discuss the importance of creating a Grateful Leadership culture to increase collaboration and succinctly capture the importance of creating a culture of appreciation throughout the organization and the Agile audit team. This valuable book couldn’t come at a better time as we face unprecedented changes and find ourselves in dire need of valuable assurance focused on areas of greater risk to organizations’ survival.”
—Judith W. Umlas, author, Grateful Leadership: Using the Power of Acknowledgment to Engage All Your People and Achieve Superior Results; Sr. Vice President and Trainer, International Institute for Learning (IIL)

“As public and private organizations increasingly move to a risk-intelligent approach to optimize performance, the auditing team plays a pivotal role in providing real-time audit findings for timely course correction. Agile Auditing offers a risk-based framework to adopt and adapt a real-time approach, enhancing the value proposition of the audit team to the organization’s mission and goals. My esteemed appreciation to Raven and Ceciliana for giving us a guide and tool chest for the successful implementation of tested Agile auditing practices.”
—Kathleen Webb, former Director of Performance Improvement, California Government Operations Agency

“In this revered book, Raven and Ceciliana do an excellent job of tackling how to use auditing to support Agile in your organization by addressing risks to the organization. The authors do so in a useful way for both novice and experienced readers. This is a rare find for a book to do such a great job addressing both readers. In an age where we have limited time, know that yours would be valuably spent reading this excellent book!”
—Susan Parente, PMP, CISSP, PMI-RMP, PMI-ACP, CSM, CSPO, PSM I, SFC, SDC, SMC, SPOC, SCT, ITIL, RESILIA, CRISC, GLCP, MS Eng. Mgmt., Agile and risk management subject matter expert

“Raven and Ceciliana are highly respected experts in the field of internal audit and true thought leaders on innovative audit practices. This book has created a fantastic ‘go-to’ resource to support the implementation of an Agile framework for any audit team. I found the support included about the real value achieved by implementing an Agile framework especially compelling. As an active practitioner looking to implement more Agile practices, I appreciated the depth of insight and perspective the authors shared based on their own practical experience. Overall, the book would be a great resource for auditors at any stage of their Agile journey.”
—Sarah Saunders, CIA, CFSA, CIDA, Assistant Vice President, Internal Audit

“Scrum has long been adding value to businesses well beyond its software origins. I am always excited to see a new pioneering application of the framework that revolutionizes a field like risk management and internal audit.”
—JJ Sutherland, CEO, Scrum Inc.