The Art of the Good Life: 52 Surprising Shortcuts to Happiness, Wealth and Success by Rolf Dobelli (Part 2)

The Circle of Competence (Why It’s Important to Know Your Limits). In the circle are the skills you have mastered. Know your circle of competence and stick within it. Focus on your circle of competence in your career. You should not do things outside the circle of your competence. One often feels tempted to broaden your area of competence, but you shouldn’t do it. To master something, a lot of time will be required. It also involves a certain level of obsession. Be realistic and know that you suck at certain things in life. One outstanding skill can trump many mediocre ones.

The Secret of Persistence (Why Bores Are More Successful than Adventurers). Classy investors buy a handful of companies and they keep them. To avoid transaction costs, they buy and sell as infrequently as possible. They take advantage of a long term horizon. Longevity has its benefits as there are many old books which are still bestsellers even today. Our brains do not have instinct for duration. Long term successes are important. One can be more productive in a peaceful environment. Stick to your circle of competence for as long as possible once you have a rewarding hobby. Perseverance and tenacity are highly valuable virtues.

The Tyranny of a Calling (Do What You Can, Not What You Wish You Could). How can find your calling? People believe there is a bud waiting to be formed inside of you. However, the problem will callings are that they are illusions. A calling that makes you happy is false. Don’t go blindly chasing your ambitious goals and feel depressed if you don’t achieve them. We often only see cases of selection bias, where we see people with a calling being successful. Build on the skills you have. The skills you have mastered are the things you enjoy doing most of the time. Other people have got to value your talents.

You can pursue a craft with love, of course, and even with a touch of obsession, but your focus should always be on the activity, the work, the input – not on the success, the result, the output. – Rolf Dobelli

The Prison of a Good Reputation (How to Shift from External to Internal Validation). Bob Dylan didn’t acknowledge his Nobel Prize in Literature in 2016. Grigori Perelman declined the Fields Medal for Mathematics. He is indifferent to what the world thinks of him. As you grow older, you feel that public perception has little to do with the quality of your work. This is the difference between someone with an inner vs outer scorecard. In the past, people were more concerned about their outer scorecard and what others thought of them. Humans spend 90% of the time talking about other people. However, in modern day, what others think of it is far less important. People are approval seeking machines on social media. People are going to comment on whatever please them. Don’t simply crave recognition but rather focus on achieving something.

Would you rather be the world’s greatest lover, but have everyone think you’re the world’s worst lover? Or would you rather be the world’s worst lover but have everyone think you’re the world’s greatest lover? – Warren Buffett

People will gossip and tittle-tattle behind your back. They’ll heap you with praise and drag you into shitstorms. You can’t control it. – Rolf Dobelli

The ‘End of History’ Illusion (You Can Change Yourself – but Not Other People). How much have you changed over the last 10 years? In terms of personality, character, temperament, values etc. When asked, most people feel that they won’t change a lot in the next 10 to 20 years. However, it isn’t true that personalities stop developing over time. The good news is that adults can exercise some influence over changes in your personality. Use your idols and be careful of the people you want to admire. The bad news is that you can’t change other people, not even your partner. Motivation has to come from within. One of the key rules of a good life is to ‘Avoid situations in which you have to change other people.’ Do not hire someone where you have to change their character. Skills can be trained, but attitudes can’t be changed easily.

Oh, it’s just so useful dealing with people you can trust and getting all the others the hell out of your life… But wise people want to avoid other people who are just total rat poison, and there are a lot of them. – Charlie Munger

The Smaller Meaning of Life (Which Goals You Can Achieve – and Which You Can’t). Our lives consist of many facets. It is very difficult to answer the question of ‘Who you are’. You should ask about what your purpose in life is. Stop trying to look for the larger meaning of life. However, you should ask yourself about the smaller meaning of life, your goals, ambitions, mission etc. Life goals are very important and it is important to set a few. Goals are useful because they put you in the mood for accomplishing them. Goals make decision-making easier. Life consists of making forks in the road. Goals need to be realistic though.

There is no discernable overarching purpose – not for humanity, life or the universe. The world is fundamentally meaningless. So stop looking for the “larger meaning of life”. You’re only wasting your time. – Rolf Dobelli

Your Two Selves (Why Your Life Isn’t a Photo Album). You have two selfs, the experiencing self and the remembering self. A human can hardly recall moments in the past. We can’t retain our experiences well. The remembering self has better retention and perhaps you can remember the awesome praline that you ate 24 hours ago. The experiencing self is only concerned with a 3 second interval. Our two selves often give contrasting replies. The remembering self tends to recall happy memories as compared to the experiencing self. Humans suffer from duration neglect. The problem of this that our remembering selves tend to value short-term fun more than long term ones. We need to rely on both selves and cannot simply ignore either one.

Humans remember most clearly the peak of an episode, ie., the moment of greatest intensity, and the end. Hardly anything else filters through into our memories. – Rolf Dobelli

Not even duration matters. Whether you’re on holiday for one week or three, your memory of it will be roughly the same. Likewise, whether you’re in prison for a month or a year, it makes no difference to your memory – the specific amount of time spent behind bars will be forgotten. – Rolf Dobelli

The Memory Bank. How much are you willing to pay for an ideal experience? Imagine what would be your most wonderful experience and jot down a price you would pay for it. How much would you pay for it if you weren’t able to remember it afterwards? To many, experiences only count if you can remember them. This is known as a memory bank. But this is weird, because doesn’t what you experience in the moment count? Animals have moments, but few or no memories. This is when we need to value our experiencing self more. Trying to recall happy moments are good, but shouldn’t you just try to enjoy the present as well? The human memory ain’t great and you will struggle to recall things. Even if we can recall, we can only recall the high point and the ending.

Memories are one-dimensional, shallow, abstract, frequently mistaken, partially fabricated and ultimately unproductive. In short, we overvalue memory and undervalue the experienced moment. – Rolf Dobelli

A life of wondrous yet forgotten moments is still a wondrous life, so stop thinking of experiences as deposits for your memory bank. One day you’ll be on your deathbed, and your account will be permanently closed. – Rolf Dobelli

Life Stories are Lies (Why We Go Through the World with a False Self-Image). We act smart and we need to know a lot via our knowledge of past events. Our brain sometimes does not remember information accurately. It remembers processed data and captures stories more vividly. Stories are things that are made up by humans. By turning it into a story, humans can remember things better. The 3Cs are used, compact, consistent, casual. Adults change as they age, more than they think they will. We tend to think that we are smarter than we actually are. This is known as self-serving bias. The trick to overcome this is to ask your friends what they think of you. Every human has their shortcomings and dark sides and it is important to see things realistically.

The ‘Good Death’ Fallacy (Why Your Final Moments Shouldn’t Worry You). When you have a terminal illness, you won’t have the ability to engage in philosophical reflection. Even if you can remember, chances are it won’t be accurate. Humans suffer from duration neglect. We have trouble evaluating how attractive other people’s lives are. Of course when you are old, you would not have such a good time as when you were younger. The key is just to live well in the present.

More crucial still is that the way you feel in your final moments is totally irrelevant in the context of your whole life. Contemplating your hour of death is unproductive, and will only distract you from the good life. – Rolf Dobelli

Better a life well lived and a few painful days on your deathbed than a shoddy life and a good death. – Rolf Dobelli

The Spiral of Self-Pity (Why it makes no sense to wallow in the past). Self-pity is largely useless and one can enter an emotional whirlpool if sucked into it. It is an unhealthy thought pattern that should be stopped. One has to accept their wrongs and move on. Blaming others has their own expiry date too. Childhood events have little impact on adult personality. You could blame your genes, but that won’t change anything. Life isn’t perfect to begin with.

If you can do something to mitigate the current problems in your life, then do it. If you can’t, then put up with the situation. Complaining is a waste of time, and self-pity is doubly counterproductive. – Rolf Dobelli

Whenever you think that some situation or some person is ruining your life, it is actually you who are ruining your life… Feeling like a victim is a perfectly disastrous way to go through life. – Rolf Dobelli

Hedonism and Eudemonia (How Meaning Can Compensate for Enjoyment – and the Other Way Around). Meaningful activities need not be enjoyable. What should you be focusing your time on? Enjoyable or meaningful activities? Instant gratification can seem animalistic. Striving for the higher pleasures for deemed as Eudaimonia. Every experienced moment has 2 components: pleasurable and meaningful. Good films also need to have a meaningful component. Some graduates are willing to take a pay cut to engage in meaningful projects. One needs to strike a balance between enjoyment and meaning.

The Circle of Dignity – Part 1 (But If Not). ‘But if not’ means ‘over my dead body’. This means issues that are not for negotiation. This is like your individual pledge. It protects you from 3 forms of attack: a) better arguments; b) mortal danger; c) deals with the Devil. You need to know where your boundaries lie. One should have a clearly demarcated circle of dignity. This is the solid ground you can fall upon. It crystallizes with time, around middle age. You need to know which principles you want to defend, and which you are prepared to give up. These are your core principles and beliefs which you need to defend.

The Circle of Dignity – Part 2 (If You Break on the Outside). You have to tell others what you believe in. You have to cherish your own will and keep persevering. People might attack our preferences, principles etc. They might be subtle and we might not even notice them. Each arrow can hurt your self-esteem and weaken your immune system. Verbal attacks can be very painful as well. This is one of the keys to a good life.

The Circle of Dignity – Part 3 (The Devil’s Bargain). What does it mean to sell your soul? Offer each money and the owner weakens. What are the things so sacred to you that you will not sell them at any price? What about your health and your opinions? We have to defend our principles against a) better arguments; b) mortal danger; c) deal with the devil. The trick is to defend your circle of dignity sharply. Everything in your circle is non-negotiable.

The Art of the Good Life: 52 Surprising Shortcuts to Happiness, Wealth and Success by Rolf Dobelli (Part 1)

Foreword. Since centuries ago, people have been asking themselves on what it means to live a good life? Is it better to seek happiness or to avoid unhappiness? The world is complicated and there is no simple solution. We need mental tools and models to rely on. This book is based on research as well as knowledge from ancient times. The tips from the book should help you navigate the challenges in life.

Mental Accounting (How to Turn a Loss into a Win). A speed camera on the expressway captured my car speed and I was going too fast. I used to be angry with such instances. However, now I smile when I receive summons. I pay the fines using money which I have set aside for good causes every year. This is known as mental accounting. You are tricking yourself into giving yourself a peace of mind. The fact has happened, but you can choose how to interpret the event. Living a good life has a lot to do with interpreting facts in a constructive way. To take the sting out of payment, you can pay first and consume later. When something has become a little more expensive/cheaper, I don’t think about it. I rather save my energy than money. You will help to retain your inner poise. Mental accounting will teach you to value your time.

The Fine Art of Correction (Why We Overestimate Set-Up). During a flight, the pilot constantly makes readjustments to the flight path. When things don’t go according to plan, we have to navigate. We can’t take our hands off the steering wheel. Our live is exposed to turbulence. Correction is more important than the set-up. The human body works in this way to fight viruses and bacteria too. In every relationship, fine-tuning is crucial too. We don’t like to correct because we feel we were right at the start. The US Constitution has been amended dozens of times already. There is no such thing as ideal training.

As an amateur pilot I’ve learned that it’s not so much the beginning that matters but the art of correction following take-off. – Rolf Dobelli

The Pledge (Inflexibility as a Stratagem). Clayton Christensen, an author, lives his life according to pledges. A pledge means an absolute commitment. This indicates inflexible behavior. However, when it comes to important issues, flexibility is not an advantage but a trap. This is because new decisions require willpower and lead to decision fatigue. Pledging saves your mental energy. Pledging means you are consistent on many topics. Pledges must be very firm and you must not waver.

Chain yourself to your pledges. Uncompromisingly. It’s easier to stick to your pledges 100% of the time rather than 99%. – Rolf Dobelli

Black Box Thinking (Reality Doesn’t Care About Your Feelings; or, Why Every False Step Improves Your Life). The black box in the plane was an indestructible box that can retrieve conversations in the cockpit so that it is easier to determine the cause of a crash. Black box thinking means radical acceptance of the truth and analyzing your actions. Your illness will still be there whether you want to focus on it or not. Self-deception is not compatible with a good life. The fact is that you are poor at something could be indeed true. Radical acceptance of defeats is part of life. Build your own black box. When making a big decision, think of what is going through your mind. Black box thinking can also work on a personal level. Tackle the problem at the source.

The world isn’t remotely interested in what you think of it or how you feel. Banish all such obscurantist tactics from your brain. – Rolf Dobelli

Accepting reality is easy when you like what you see, but you’ve got to accept it even when you don’t – especially when you don’t. – Rolf Dobelli

To put it another way, if you can’t spot where you put a foot wrong, you’re going to fall flat on your face again. Persistence in your analysis will pay off. – Rolf Dobelli

Counterproductivity (Why Timesavers are Often Timewasters). A car improved efficiency by many fold over horse carriages. Although it seemingly saves time, you have to factor in the time needed for maintenance, patrol, time caught in traffic jams. After factoring all these, the car has an average speed of 3.7mph. Technologies that seem good at the start needs to analyzed using a full cost analysis. For instance, powerpoint is great, but isn’t it a waste of time when you can get the message across using something simpler. Therefore, it is important to be on your guard against counterproductivity. Keep only the bare essentials. Technology can actually be a burden. The author is against modern technology, like smart devices.

A basic rule of the good life is as follows: if it doesn’t genuinely contribute something, you can do without it. – Rolf Dobelli

The Negative Art of the Good Life (Do nothing Wrong and the Right Thing Will Happen). Pilots simply want to avoid crashes. In investment, there is upside and downside. As long as you do the checks on the plane, you should be safe and minimize the downside. Like in tennis, you are likely to win if you minimize on your errors and play conservatively. What makes people happy? The literature does not contain much information. However, we can pinpoint what makes people unhappy: alcoholism, drug addiction, chronic stress, noise, long commute etc. Thus, the trick in life is to eliminate the downside as much as possible.

The Ovarian Lottery (Why You Didn’t Earn your Successes). Happiness is something you have. How much of success can be attributable to your own actions? Sometimes, it is because you were simply born in a good place. Where we are born definitely influences our success in a big way. The same also matters for the family you were brought up in. Timing is important. We are also a blend of our parent’s genes. For quite a number of things, you owe it to your genes. You haven’t really earned your achievements. You definitely need on others to be successful. Grateful people are demonstrably happier people.

Six percent of all the people who have been born over the last 300,000 years – since Homo Sapiens populated the world – are alive in the present day. They could just as easily have been born into another era; indeed, the probability of that is 94%. – Rolf Dobelli

The Introspection Illusion (Take Feelings Seriously – Just Not Your Own). Describe the objects in front of you. Describe what you feel about them right now. Our feelings are more nebulous. However, we are unable to express them clearly. You can’t achieve the good life through introspection. You are unlikely to achieve a certain purpose just by analyzing. Examine what are the recurring themes of your past and not analyze your feelings. Learn to read the emotions of others. Learn to treat your emotions less seriously. We need to cultivate a new relationship with our inner voices. Feelings will change over time and one should never be ‘owned’ by them. Repressing your emotions will only lead to them coming harder back at you. The key message is not to trust your emotions.

Take other people’s feelings very seriously, but not your own. Let them flit through you – they’ll come and go anyway, just as they please. – Rolf Dobelli

The Authenticity Trap (Why You need a Secretary of State). We all like to talk to authentic people However, do we want people to be too honest and forthcoming? Authenticity online are all staged. We don’t really know what authentic behavior is. There is simply no need to blurt out for innermost feelings. You can play your second self and keep promises and not blurt out personal feelings too often.

The Five-Second No (Small Favors, Big Pitfalls). How often do you say yes to favors without thinking? Do you reject others? When you keep helping others, you have less time for yourself. Co-operation was common in the animal kingdom because of survival. In game theory, the tit for tat works well. In the animal kingdom, animals believe in reciprocal altruism. Only apes have the ability to do it because they have a good memory. It keeps the economy going. However reciprocity has its dangers. Nowadays I say no to a lot of things which aren’t important to me. This is one of the key points of a good life.

The Focusing Illusion (Why You Wouldn’t be Happier in the Caribbean). When you are experiencing winter, you feel that you will be happier in the tropics on a beach somewhere. The more you focus, the greater the influence of the event. Because we are focusing on the climate only, we think Miami is superior. However, it is important to think about other factors. You assign the weather as overly important. Therefore, it is important not to overemphasize any single factor. The problem with humans is that it is not easy to view things from an ultra-wide lens. The grass usually looks good on the other side. The focusing illusion is bad and you need to be aware when it happens.

Nothing in life is as important as you think it is while you are thinking about it. – Daniel Kahneman

The Things You Buy Leave no Real Trace (Why You Should Buy less and Experience More). How much pleasure do you get from your car? It seems that people do. We tend to overemphasize the impact an object can give us. When you think of the car, you seem happy. However, when you think about using and maintaining it, probably you won’t feel as happy. Expensive objects tend to have higher upkeep and you get used to them after a while. When you experience something, you are fully present. Try to experience more and it is also usually cheaper. We overestimate the impact of purchases on our wellbeing.

While you’re thinking about X, you tend to grossly over-estimate X’s impact on your life. – Rolf Dobelli

Fuck-You Money (Saving Up Freedom). There is a diminishing marginal utility to things you consume, like water even if you are very thirsty. This holds true for money. Think about how much money you need to earn before you feel that additional income will not have any impact on your wellbeing. A decent income is needed for survival, but beyond that, it doesn’t bring you a lot of additional happiness. Rich people have more things to worry about. Life satisfaction for Americans in the 1946 and 1970s were largely the same, according to Easterlin. Wealth is relative, not absolute. Hence, this is the problem that humans face. Fuck-you money are the savings that will allow you to quit your job without you ending up in financial trouble. Don’t think too much about money and worry about slight fluctuations in your portfolio. Don’t compare yourself with the rich or you will feel unhappy. Live modestly even if you are rich as wealth makes people jealous. Genuine success is not financial in nature.

This revelation has been termed the Easterlin paradox: once basic needs have been met, incremental financial gain contributes nothing to happiness. – Rolf Dobelli

IIA Magazine June 2017 Issue

Courage under Fire. Public sector auditors need to have the courage to raise issues despite the political agenda in the public sector. Audits provide a cornerstone of good public sector governance. Targeted relationship building is very important. Courage is a pre-requisite of being an internal auditor.

Terrorism and Geopolitical risks. Violence and political uncertainty threaten business interests internationally. Overall, terrorism and political violence have been at high levels. Businesses need to have strategies to deal with the geopolitical climate.

SWIFT has improved their security standards via a customer security control framework, where banks must comply annually. SWIFT will report banks which don’t comply with the new standards.

Corruption usually happen because of a poor tone from the top. The younger generation seems to be more lax when it comes to ethics and to managing others. There needs to be strong leadership from the top to tackle bribery and corruption. The board has oversight of the company’s culture but management has the best position to shape culture. Firms can get insights from departments like HR, finance on the company’s culture. Companies that allow employees to store personal information in emails etc is asking for trouble.

Key stakeholder surveys. Internal auditors should look to get feedback from their most important customers. A QAIP is a requirement but surveys are rarely given to the AC and executive management. Audit should have the habit of surveying at the end of each assurance or advisory activity. The respondent should be able to make comments as well. If the scores are not satisfactory, the CAE should recommend some course of action. Survey results should be shared with AC etc. These results can enter the QAIP as well.

‘It is common for audits with satisfactory ratings to receive high opinion scores while audits with unsatisfactory ratings receive low survey scores despite efforts to adhere to department policies and the Standards.’

Application Control Testing. Control reviews can help ensure critical software applications function effectively and securely. To audit effectively, it is necessary to audit application controls too. This covers every feature and function of the application. Next, one needs to identify the key application processes and the application controls. If necessary, an integrated audit should be performed. One can use the GTAG 8 to help. Auditors can validate input and output controls. Are the processing controls accurate? Are there critical errors in computations? There is a need to examine interface controls as well. IA needs to examine: output controls, storage controls, monitoring controls, configuration management, change controls and patch management.

The Risk in the Control Environment. Auditors need to think beyond check boxes to provide assurance that control processes are addressing risks. The control environment is difficult to measure. IA should not cover up control weaknesses to management. Policies change over time and become less applicable, hence the control environment shifts. SOD is useful, but in cases where the firm is too small, alternative measures need to be made. When there are personnel change, there might be an urgent need to re-train.

‘IA needs to ensure they have authority to analyse and communicate the situation beyond just the existence of policies. Ensure management understands the difference between a control gap and a control failure. It is important to know whether the gap has created a failure, but just because it hasn’t failed to date should not minimize the impact of the gap.’

The ‘Free Trail’ Scam. Data analytics uncovers a sales force fraud using pre-paid credit cards to boost commissions. Be wary of pre-paid credit card usage among commissioned sales forces. There is a need to check credit card transactions against a BIN database. Understand how many customer accounts are associated with a single credit card number. Companies should request for customer credit scoring and upfront payment to prevent customer defaulting on payments.

Under Siege. Public sector auditors can face intimidation, isolation, retaliation, suspension – even termination – just for doing their job. For instance, if the audit conflict with an agency’s head’s political agenda, the agenda usually wins. CAEs might have to sue the government in the end. Targeted relationship building is important. Retaliation might reduce in a reduction of CAE’s duties. Sometimes, they are told to cease investigations. Sometimes, the CEO will tell you want to audit but you are not allowed to listen to the Board. Sometimes, the CAE has to supress facts in a report. The CAE needs to drive an open and ethical environment with the AC to prevent such things from happening. If you want to be the CAE, you need to establish clear reporting lines and ensure you have access to the Board right from the start. If you are not comfortable, walk away. Auditors should build relationships with those they work with. Start by winning over staff and explain your audit charter to them. Keep open lines of communication. Document and verify any disagreements and understand the root cause. Learn to create a paper trail for your findings. Sometimes, resigning is the only option. It is still better to do the right thing.

‘It’s very difficult to make a change if the organization is dysfunctional. Sometimes you can make renovations to a house that will improve the functionality, but sometimes you just have to declare the house condemned and start over.’

How to Audit Culture. Culture audits can help practitioners gain insight into the causes of poor organizational behaviour. Not enough firms are auditing culture. It can be challenging because it is subjective and complex. Culture is shaped by values that influence everyday behaviour within the organization. Management’s create sub-cultures among their teams. Different departments have different cultures and risk tolerances etc. There is no defined criteria for each aspect of the business too. One can start with a model to audit culture. Employees are the best source of information about the culture. Culture is largely perception based. The problem is that employees might be fully honest, they work in silos, they may like to complain etc. The Board and management need to believe that the IA team has what to takes to audit culture. Some of the questions to ask are ‘Do our HR and talent practices reinforce the desired behaviors throughout the organization?’; ‘Does your business manage risk appropriately and in line with our risk appetite?’; ‘What do our leaders communicate to us about risk, ethics, and how we should be doing our work?’; ‘Does the company’s environment promote accountability for desired risk behaviors?’ The audit report must be worded in not a sensitive manner. IA needs to obtain evidence via appropriate engagement techniques. Sometimes, soft evidence can work as well. Structured interviews can be conducted for auditees. It is good to gather evidence from many employees. It is possible to add questions on ethics and culture to the annual employee survey. IA could present a monthly dashboard etc on data like customer survey results, customer complaints, turnover statistics etc.

A smarter approach to third-party risks. Adopting a focused collaborative strategy can help improve management of outsourced service providers. Third-party risks are very real, especially functions which have been outsourced. Banks are to held responsible for their third-parties’ performance. Data breaches in recent times have made this even more important. It is important to manage the risk from third-party vendors. It is good to map a list of third-parties you work with and the risks to be assessed and monitored. It may be useful to develop key risk and KPIs for areas where risk is increasing. It could be useful to send questionnaires to the third party to understand their risk exposure and risk appetite. Some companies are looking at group intelligence as a means of sharing due diligence data. Some firms have already set up risk consortiums. Managing outsourcing risks is vital to protecting shareholder value.

The Innovative Internal Auditor. As businesses strive to find opportunities in a world driven by technological transformation, internal auditors need to continually innovate to stay ahead of the game. IA cannot be static if they want to survive in the environment. Change is part of modern life and IA needs to adapt to changing needs. There is a need for IA to be more forward looking. Because of this, IA needs to innovate in the areas like audit automation, data analytics etc. One needs to adopt a continuous improvement mindset. It takes courage to innovate, but the team will reap the rewards. Get someone on your team to be in charge of innovation. Robots might be able to perform routine control testing. We need to embrace technology to its fullest capacity.

The Dynamics of Interpersonal Behavior. To be successful, auditors need to cultivate their soft skills just as much as their technical abilities. Soft skills like listening, understanding, questioning etc are just as important as hard skills. Sometimes, audit reports are not in sync with what stakeholders want. IA people need to form effective interpersonal relationships. People-centric skills are not easy to master. Auditors need to build trust over a few days. IA needs to keep to promises on deadlines, listen to feedback and deliver their goals. Auditees might feel there is a big difference between themselves and auditors and tend to look down on auditors. IA must approach from the angle that you are trying to help. Having a good mentor will help. Ultimately, IA needs to meet stakeholders’ demands.

Opportunity from Disruption. IA should try to understand emerging risks. Be forward thinking, via a strategic planning process and have more internal audit’s risk assessment process. It is also important to create flexibility in the audit plan. Be inclusive and communicate with the other lines of defence. Be business minded and hire from a wide variety of sources and ensure they have different types of training. Be flexible by design. Evaluate the nature and timeliness of IA’s procedures. Be talent ready.

It is important for IA to issue audit reports and follow-up on corrective actions taken soon after. Although IA reports to the AC, it still has to administratively report to the CEO. Having no time is not an excuse.

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