Creative and Innovative Auditing

Bringing creativity and innovation into all professions and types of auditing today, this book meets the needs of auditing practices in the future. Recent criticisms of auditing practices by financial regulators, the traditional ?expectation gaps? between auditors and auditees and the continuing advances in technology make it even more important today to motivate creativity and innovation in the professions of auditors, be they internal, external, quality, environmental, social, clinical and so on.

In Creative and Innovative Auditing, Jeffrey Ridley studies all auditing practices, not just internal auditing, using an innovation model he has developed through research which is applicable to all auditing organisations and professions. He shows how motivating innovation in auditing practices will address the needs of today and tomorrow?s auditing of governance, risk management and control.

List of Figures

List of Tables

Chronology of Author’s Published Articles and Research in the book

About the Author

Foreword

Acknowledgements

Preface

Chapter 1 Creativity and Innovation in Management and Auditing: Theories and Practices

1.1 Creativity and Innovation Theories

1.2 Creativity and Innovation Starts with a Vision

1.3 Creativity and Innovation in Management

1.4 Creativity and Innovation in Auditing

1.5 Framework for Creative Thinking and Innovation in Governance

1.6 Chapter Review

1.7 Introduction to the following Chapters

1.8 Creative Audit Thinking Activities

PART I STEWARDSHIP

Stewardship Is All About Ethics, Trust and Compliance

Creative Audit Thinking Activities

Chapter 2 Auditors Are Responsible Leaders

2.1 Importance of Responsible Leadership Today and Tomorrow

2.2 Auditors are Responsible Leaders Today and Tomorrow

2.3 Auditors are Responsible Leaders of Governance

2.4 Auditors are Responsible Leaders of Culture

2.5 Auditors are Responsible Leaders of Sustainability

2.6 Chapter Review

2.7 Creative Audit Thinking Activities

Chapter 3 Auditors Are Ambassadors

3.1 Ambassadors Are Envoys Who Represent a State

3.2 Auditors Are Ambassadors for the State of Good Stewardship

3.3 Professional Associations Are Brand Ambassadors for Auditors

3.4 Chapter Review

3.5 Creative Audit Thinking Activities

Chapter 4 Auditors Are Gatekeepers

4.1 Stewardship Is About Care and Protection

4.2 Prevention and Detection of Fraud

4.3 Auditors Are Gatekeepers at Board Level

4.4 Auditors Are Gatekeepers of the Control Environment

4.5 Chapter Review

4.6 Creative Audit Thinking Activities

PART II CHANGE

Creative Audit Thinking Activities

Chapter 5 Auditors Are Time Travellers

5.1 Time Travel – Past Present and Future

5.2 Time Travel and Change in the Audit Process

5.3 Time Travel in the Audit Learning Space

5.4 Risk, Control and Change Management in Time Travelling

5.5 Chapter Review

5.6 Creative Audit Thinking Activities

Chapter 6 Auditors Are Scientists

6.1 Scientists Are Auditors

6.2 All Auditors Are Scientists

6.3 Principles and Standards of Auditing

6.4 Rules of Conduct for Scientists and Auditors

6.5 Science of Data Mining, Analysis and Diagnosis

6.6 Chapter Review

6.7 Creative Audit Thinking Activities

Chapter 7 Auditors Are Futurists

7.1 Futurists are Auditors

7.2 Future of Internal Auditing – 1975

7.3 Future of Internal Auditing in the 21st Century

7.4 Future of All Auditing in the 21st Century

7.5 Today’s Futuristic Visions of Auditing by Others

7.6 Chapter Review

7.7 Creative Audit Thinking Activities

PART III ASSURANCE

Creative Audit Thinking Activities

Chapter 8 Auditors Are Sceptics

8.1 Auditors Must Be Sceptics

8.2 Sceptical Auditors Must Ssk the Right Questions

8.3 All Audit Committees Must be Sceptics, Too

8.4 Chapter Review

8.5 Creative Audit Thinking Activities

Chapter 9 Auditors Are Lawyers

9.1 Compliance With Laws and Regulations

9.2 Lawyers Are Auditors

9.3 Auditors Are Lawyers

9.3 Audit Committees Must Be Lawyers, Too

9.5 Chapter Review

9.6 Creative Audit Thinking Activities

Chapter 10 Auditors Are Quality Managers

10.1 Quality Management Creates Trust

10.2 Who Are the Customers of Auditors?

10.3 Auditors are Quality Managers

10.4 Audit Committees Are Quality Managers, Too

10.5 Chapter Review

10.6 Creative Audit Thinking Activities

PART IV EXCELLENCE

Creative Audit Thinking Activities

Chapter 11 Auditors Are Researchers

11.1 Researchers Are Auditors

11.2 Auditors Are Researchers for New Knowledge

11.3 Researching Auditors Seek Continuous Improvement

11.4 Chapter Review

11.5 Creative Audit Thinking Activities

Chapter 12 Auditors Are Benchmarkers

12.1 Benchmarking Is a Management Tool

12.2 Excellent Auditors Need to Continuously Benchmark

12.3 Excellent Auditors Continuously Benchmark Governance

12.4 Chapter Review

12.5 Creative Audit Thinking Activities

Chapter 13 Auditors Are Runners

13.1 Running Auditors Are PROACTIVE

13.2 Running Auditors Know the Power of Three

13.3Running Auditors Market a Brand of Excellence

13.4 Running Auditors Must Race Into the Future

13.5 Chapter Review

13.6Creative Audit Thinking Activities

Epilogue

Appendices

A The Ten Principles of The United Nations: Global Compact Human Rights

B Ten Top Tips for Improving Leadership and Capability Management

C How Good Is Your Culture?

D How to Train to Be a Diplomat

E Charter of the Commonwealth

F Risk Management Checklist

G International Integrated Reporting Council: Guiding Principles and Content Elements

H United Nations Sustainability Development Goals

I COSO Fundamental Concepts of Internal Control – Integrated Framework

J The Institute of Internal Auditors Inc.: Code of Ethics

K Creativity and Innovation: Keys to a Successful Future for Internal Auditing

L Benchmarking

M The Principles for Responsible Investment

Bibliography for the 21st Century

Index

Jeffrey Ridley was appointed a visiting professor of auditing at the London South Bank University, UK, in 1991, a visiting professor of corporate governance assurance at the University of Lincoln, UK, in 2013 and a visiting professor of corporate governance at the Birmingham City University, UK, in 2017. He is a Fellow of the Institute of Chartered Secretaries and Administrators and a Fellow of the Chartered Institute of Internal Auditors. His auditing experience spans both the public and private sectors. Before his academic career he was a senior auditor in General Motors Limited for three years and manager of internal auditing in Kodak Limited, England, for twenty-eight years. Prior to his industrial experiences he was a member of HM Government’s Overseas Audit Service in Nigeria for ten years. During the past twenty-three years he has taught at undergraduate, postgraduate and now doctorate levels in London and has spoken at many conferences, nationally and internationally.