Schmidt: Auditing sacred cows

"Do you audit your sacred cows?", asks Ursula Schmidt.

Contributor

I recently heard a speaker explaining his company's journey from unstructured audit & compliance to risk-based audit & compliance. One point struck me in particular: “We also looked at our sacred cows.”

Wow!

Apart from the fact that I think that cows are adorable animals (in fact I stop, if I can, when I see cows and take pictures, but that's another story ), this triggered two questions for me:

DO WE KNOW THE SACRED COWS IN OUR COMPANY?

From experience, I would say that virtually every company, small or large, has a few “untouchables”. This could be a
❌ person
❌ process
❌ system
❌ supplier
❌ location
❌ (please add! Options are endless)

What they have in common is that questions about such “untouchables” are generally not well received (putting it positively). Moreover, rules that apply for such sacred cows tend to deviate from the expected.

Ursula Schmidt is on LinkedIn at https://www.linkedin.com/in/schmidt-advisory/

Examples:
Supplier X is never asked to provide evidence of work done.
Location Y does not need to follow the same reporting requirements.
Person Z always submits expenses with 6 months' delay.

And everyone finds this normal.
That´s a risk. It´s actually a huge, big, flying warning flag.

DO WE AUDIT THE SACRED COWS?

Let me guess. For those sacred cows you know about, you have already tried several times. You got loads of funny answers such as
“maybe better next year”,
“the local MD is a good guy, she knows what she is doing”,
“we shouldn't bother this supplier too much”,
“the system is too complex for internal audit to look at”,
“he travels so much, we cannot expect him to do his expenses properly”. My favourite: "that's not a good idea, politically speaking."

Sometimes you win the independence battle. But sometimes you give up. Because – let's face it – there are other, more pressing risks to review. That's not great, but it is human.

So what to do about our sacred cows – in internal audit, but also in general in a company?

✅ Watch out for your sacred cows. They may be less adorable than those baby calves in the field, but it's crucial to understand WHY they are allowed to graze completely unsupervised under their remote willow.

✅ Resist pressure to “not touch the sacred cows” in internal audit. It's a HUGE warning flag. I'm happy to repeat myself. Use all your professional independence and put those untouchables on your audit plan – and then execute. Don't be afraid to escalate any attempts to stop you. Document yourself.

Repeat with me: don't let your sacred cows graze unobserved under their special willow!


Ursula Schmidt is an internal audit consultant who helps companies by giving internal audit and compliance a positive spin, because internal audit and compliance were invented to make your business safer - not to irritate you.


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