‘Beware…here come the auditors!’ is a saying often heard echoing through corridors of banks here in Asia and around the globe. Internal audit is often seen as the ‘dark side’, a bunch of people set to ruin your day and make your life hell.
While I’ve met some internal auditors who aptly fit that description, the profession overall has transformed itself and become a real contributor to a bank’s success. And the internal audit industry is also under even more stringent scrutiny by professional bodies and regulators.
I’ve been a regional and global head of audit in both small and large banks in Asia – most recently at CLSA and J.P. Morgan in Hong Kong. Based on this experience, I’d really recommend a short-term stint and/or a career in internal audit, particularly if you’re working in another department and want a different perspective on the banking industry.
A stint in internal audit is like doing a practical MBA. It’s perfect if you’re looking for a different challenge within banking without initially knowing exactly where you want to take your career. And it can also help you fast track your existing career path by broadening your experience.
Internal audit is a key to many doors within a bank. It gives you diverse perspectives on the organisation because you deal with staff and management at all levels.
And these days internal audit is not a tick-the-box function – it’s both strategic and operational. Internal auditors are in a unique position to gain a hands-on, live understanding of the bank and to measure the true health of the business.
For example, in a typical markets-trading audit, the auditor might have a front-to-back insight into deal creation within several areas of the front office, as well as in operations, risk, compliance, and finance. This exposure is magnified and consolidated as you conduct multiple audits.
By contrast, if you’re working in (for example) operations or finance, your core exposure is generally limited to just the operations department.
Banks in Asia need more experts to move into internal audit
Across both the strategic and operational levels of internal audit, there is an increasing need for subject matter experts at banks in Asia.
This is where so-called ‘guest auditors’ (staff from other departments who move into audit either temporarily or permanently) can come into their own.
An effective internal audit department has to be commercial, pragmatic and market focused, with a real appreciation of both substance and form – and it’s here that guest auditors are invaluable. Their expertise is critical when assessing suitability for executive roles across all departments within a bank, for example.
As regulators become more stringent and as risks within the audit industry change, a more holistic and substantive audit methodology is emerging. It requires more detailed subject-matter expertise in the audit process. Auditors are expected to deep dive more than in the past.
For example, in Asian banking there is currently a strong demand for candidates from the front-office, risk, finance, technology and compliance functions from the internal-audit teams that are auditing in those respective areas.
Moreover, given the growing demand for guest auditors in Asia, more banks are relocating candidates from the US and Europe into this region.
For banks in Asia, both short-term and long-terms stints within internal audit for staff from other departments are now a necessity. If you want a career change, you could be well placed to take advantage of this.
Sharad Chawla has worked as a senior professional within the finance industry for more than 25 years. He was global head of audit for CLSA for over six years, and preceding that was APAC head of audit for J.P. Morgan. He is now the MD and founder of G.R.A.C.E Recruitment Group in Singapore.
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