Agile Auditing. Raven Catlin

Preface

      From the beginning, it seemed natural that Ceciliana Watkins and I would form a friendship. We think alike as auditors, respect each other immensely, and have a passion for learning and sharing knowledge, not to mention sharing a huge passion for cooking and experimenting with “recipes.” On a warm summer night in 2011, just outside of Sacramento, California, we had dinner and talked about some of the pains and frustrations that we experienced in auditing. One of our frustrations is that many auditors work on multiple projects simultaneously and miss deadlines far too frequently. We continued our evening recognizing that we had to determine and fix the root causes of our problems, including audit clients (commonly referred to as “auditees”) frequently failing to deliver evidence when needed, constant and often unconscious scope creep, excessive audit workpaper documentation, and wordsmithing masked as elegant writing consistently clouding the message we really need to deliver to add value, improve processes, and help our organizations accomplish their objectives.

      Please understand, my friend and co‐author Ceciliana is a life‐long learner, creator, and challenger. She is a project management professional and has dedicated her professional life to auditing. She challenges others to think better and do more to help improve the audit profession. As we discussed many audit‐related frustrations, my dearest friend asked, “have you ever researched Agile project management?” It was that dinner conversation, over home‐cooked corn tortillas, ceviche, and watermelon‐basil margaritas, that started my Agile auditing journey. On the plane back to Virginia, I started listing the problems faced in the audit process. The very next day, I purchased my first book on Agile and began learning about Agile, including Scrum and other frameworks. Moreover, I started tackling the list of frustrations and mapping Agile practices to the problems in a quest for solutions. I began the journey seeking answers to these questions:

      I talked with Ceciliana about our journey, questions, and early conclusions. We realized that many of our problems are just symptoms of a root cause, poor audit client relationships. So, we looked for opportunities to use Agile frameworks to help resolve client relationship issues.

      Since 2011, “I” became “we” as the Raven Global Training team expanded. Expert trainers joined, and courses increased, including courses on Agile auditing. Ceciliana was the first instructor we officially added to the team. We continually collaborate on many topics and bounce ideas off each other – it is a great partnership.

      We concluded that the auditing profession can, and should, use Agile frameworks and that doing so can solve the root cause of many problems experienced in the audit life cycle, such as poor client relationships. But how? What would this look like? Would it look the same for every audit team? Can it work on every audit? What would we call it? The name Agile auditing felt right, and the rest of the story is provided for you in the pages of this book.

      Successful Agile projects are those that recognize failure quickly, through constant inspection, and rapidly adapt to identified failures.

      In 2013, we began offering keynote addresses on Agile auditing concepts at conferences. As we continued developing our Agile audit framework, we also sought opportunities to put the framework into practice. Our first client was up for the challenge in 2014, and we knew we might not get it right the first time. In fact, failing, and failing fast, is a collective mindset in Agile disciplines. It is okay to fail. Failure is even expected! Successful Agile projects are those that recognize failure quickly, through constant inspection, and rapidly adapt to identified failures.

Our first full‐day Agile auditing class was offered in Roseland, New Jersey, in September 2014. Back then, our Agile audit framework rigidly aligned the audit process and project management principles used in auditing to the Agile Manifesto, Agile principles, and Scrum framework. Our first Agile audit methodology was too rigid and didn't incorporate our personal auditing experiences. With our second Agile auditing class in Albuquerque, New Mexico, in January 2015, we changed the methodology to reflect more of a framework and incorporated Participatory Auditing principles, more client collaboration, and professional standards for the audit profession. For private sector internal auditing, we turned to the Standards for the Professional Practice of Internal Auditing issued by The Institute of Internal Auditors (IIA). For public sector auditing, we reviewed the Generally Accepted Government Audit Standards (GAGAS), commonly referred to as the Yellow Book. For audits of external financial reporting, we researched the Generally Accepted Auditing Standards (GAAS).

      As Steven Denning points out in his book The Age of Agile, Agile started as a movement that took off in 2001 as a set of values and principles articulated by the Agile Manifesto of 2001. The manifesto spawned various management methodologies including Scrum and many others (Denning 2018). Over time, it evolved into a movement of people with a specific mindset that focuses on delivering continuous value to customers. As we started our journey in Agile, we soon realized the importance of distinguishing a framework from a methodology to facilitate the Agile auditing movement.

So, what is the difference between a methodology and a framework? According to the Cambridge Dictionary, methodology is defined as “a system of ways of doing, teaching, or studying something” (Cambridge Dictionary 2020b). Basically, a methodology is a systematic way of doing or accomplishing something. If we apply an Agile methodology, we must have systematic procedures. Methodologies are prescriptive – they tell us how to do something in a step‐by‐step manner. On the other hand, the term framework is defined as “a supporting structure around which something can be built” or “a system of rules, ideas, or beliefs that is used to plan or decide something” (Cambridge Dictionary 2020a). Therefore, a framework provides guidelines or a structure that we can work under. A framework allows us to be flexible and adaptive. While a framework has a general structure, the user is not guided through specific steps or processes to get to results. A framework has flexibility within its structure, enabling the user to be supple and to adopt responses to change without having to follow specific steps. Therefore, Agile auditing is a framework that provides options to develop your approaches, methods, practices,