Preventive and reactive Auditing
Several practical examples at Novartis illustrate that, depending on location, scope and topic, internal auditors must adopt specific approach techniques. Therefore Peter showed several typologies in behaviours in conjunction with audit communication and execution of audit projects.
Peter showed that internal audit can either act as police officers, providing assurance that the rules within an organization are applied and “punishing” those who don’t comply, or act more as doctors, diagnosing in a more constructive way organizational problems and prescribing treatments to make the organization better and avoid chronical diseases. While both roles include risks of overpromising and under delivering, they also have some benefits, which, in combination, could maximize the impact of the value proposition of internal audit.
The ‘policeman’ approach is more appropriate/necessary in a regulated environment where non-compliance can have major consequences. The ‘doctor’ approach more appropriate in unregulated environments, where there can be more focus on business effectiveness. (Peter Elam)
In the perspective of Peter: In the end, the best approach might be the one or the other… or a combination of both.
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Peter Elam | CV
Peter Elam was until June 2018 Head of Internal Audit for Novartis, a position he assumed in 2010 when he joined the company.
Prior to joining Novartis, Mr. Elam spent 15 years at Shell in positions of increasing responsibility in Europe and Asia. He served as finance director of Shell China Ltd., head of internal audit at Shell’s Downstream Europe business, and finance director and controller at the Pernis refinery in the Netherlands, among other roles.
Mr. Elam holds master’s degrees in history and modern languages and in Russian and East European studies from the University of Oxford in the United Kingdom. He also studied at McGill University in Canada and at Eötvös Loránd University in Hungary. He is a chartered internal auditor and a fellow of the UK Chartered Institute of Management Accountants.
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