Last Monday I attended this one day seminar in Menara KL. It was supposed to be an awareness program for Accountants in TM about Corporate Governance and best practices for operational control methods. But it turned out to be an ‘exciting’ session where the organizer, the Group internal auditors had a very tough day answering questions fielded by the participants. Mind you, these were the people who used to be treated with the auditors so called ‘fair’ view year in year out so I guess, it was a great opportunity for us especially who’s involved with operational matters to turn around the table and express our ‘fair’ view on them.
One interesting comment from the floor was about Auditors role in being pro-active in the company in ensuring adequate mechanisms are in place in ensuring corporate governance flows throughout the company. Instead of coming in annually or even quarterly to conduct their auditing activities, which personally I see it as very re-active, with the best practices knowledge that they claimed that they have, they should be able to prevent any organisational structure failure and systems or work processes control weaknesses from the beginning. They always know during every audit when there is actually inadequate or ineffective segregation of duties for example to avoid misuse of abuse of power and authority. Our argument was, all this can be avoided if during the development stage of any organization structure or systems development for that matter, the auditors could come in and provide consultation based on their ‘deep’ knowledge pool and ensure that appropriate control measures are in place.
One interesting comment from the floor was about Auditors role in being pro-active in the company in ensuring adequate mechanisms are in place in ensuring corporate governance flows throughout the company. Instead of coming in annually or even quarterly to conduct their auditing activities, which personally I see it as very re-active, with the best practices knowledge that they claimed that they have, they should be able to prevent any organisational structure failure and systems or work processes control weaknesses from the beginning. They always know during every audit when there is actually inadequate or ineffective segregation of duties for example to avoid misuse of abuse of power and authority. Our argument was, all this can be avoided if during the development stage of any organization structure or systems development for that matter, the auditors could come in and provide consultation based on their ‘deep’ knowledge pool and ensure that appropriate control measures are in place.
This is one preventive and pro-active approach to ensure good corporate governance practices in TM. What really irritates me was that they actually said that they are only willing to come in and give their opinion upon invitation! They have their reasons la kan where as far as resources are concerned, it is quite difficult for them to be this proactive. Tapi there are many other ways to implement this kan? For a start, they could develop a policy or some guidelines for us comply before approving any organization structure. What I observed usually, corporate governance had always taken a back seat during any organizational structure development process and always, empire building or self interest takes priority. Sometimes, in an operational org. structure especially, when there is a ‘right sizing’ campaign, I feel that auditors can play a very influential role in providing justifications on the amount of resources required to ensure adequate control, check and balances methods are in place in the structure.
Perhaps the management could have more faith and trust gathering feedbacks from this ‘independent’ body and use this info to influence their decisions. Kalau kita yang bagi feedback, dia kata kita nak kembang kan empire or nak dapat grade lagi besar. So auditors, where were you guys masa kita buat organizational restructuring exercise?? Didn’t get any invitation?? I believe that you guys can help us make things right from the very first time..after that, you can always conduct compliance audit. Think about it, wouldn’t you have less auditing work if all these measures have been in place from day one?? Or maybe that’s the real problem is it? No more or less work to do as a result of being pro-active? I don’t deny the importance of auditing, however, I just wish that there’s some paradigm shift in their mindset. The stereotype view that we always have is that auditors are like ‘spell checkers’, providing opinions on compliance. I personally feel that they could provide more preventive ‘inputs’ rather than corrective. Apa-apa pun, that day, I get to enjoy the view from KL Tower and of course , free food!
1 comment:
Hmmm, very deep thought was involved in writing this blog. May the force be with you. On with the attack on auditors. ps... we will be audited in June06. Gulp!
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