A Day in the Life of an Internal Auditor at Compass Diversified
Macartan's role as Internal Audit Manager at Compass Diversified involves a cyclical process, beginning in March with a comprehensive risk assessment of each entity, including "changes in personnel, systems, or processes," and a fraud risk assessment to protect against internal or external threats. The majority of the year is then dedicated to executing the audit plan, performing detailed tests of controls, and ensuring financial statements are accurately reported to investors.
Risk Assessment, Internal Controls, Financial Statement Auditing, Fraud Risk Assessment, Report Writing
Advizer Information
Name
Job Title
Company
Undergrad
Grad Programs
Majors
Industries
Job Functions
Traits
Macartan McElroy
Internal Audit
Compass Diversified
Villanove University
N/A
Accounting
Finance (Banking, Fintech, Investing)
Finance
Video Highlights
1. Internal audit involves a yearly cycle starting in March, focusing on risk assessment and understanding each entity's profile, including changes in personnel, systems, processes, customers, or product mix.
2. A significant part of the process includes fraud risk assessment to identify potential internal or external threats and ensure the company's assets and information are secure.
3. The majority of the year is dedicated to executing the audit plan, which involves detailed testing of key controls, reconciliation of accounts, analysis of management's application of rules and policies, and ultimately reporting to investors to ensure accurate financial statements
Transcript
What does a day in the life of an internal audit manager look like?
Throughout the year, internal audit follows a cycle that generally kicks off in March. At that point, we examine each entity we own. We work with management and decision-makers at these local entities to understand their profile.
This includes identifying any changes in personnel, systems, or processes. We also look for shifts in significant customers or product mix. The goal is to understand the entity's profile and how it will impact our internal audit plan.
We typically begin the year with a risk assessment. We meet with management to review not just financial statements, but the entire organization and its business. We also consider industry changes that could impact the company and want to understand their potential effects.
In addition, we perform a fraud risk assessment. This is a specialized review to ensure there are no internal or external bad actors. We want to make sure no one is stealing from the company, its assets, or its information.
After these initial steps, we conduct walkthroughs. We sit down with management to review documented processes and verify that internal controls and key personnel are still in place. We then update any changes that have been made.
Following that, we execute our audit plan, which occupies about 80% of our year. We perform detailed tests of key controls, ensuring operations are as expected. We also confirm accounts are reconciled and analyzed, and that management has applied its rules appropriately regarding policies and reserves.
Ultimately, we aim to ensure that the information reported to our investors is properly stated.
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