Internal Audit Log: 0.5

This isn’t my first Internal Audit rodeo. After college, I was a banking consultant with Ernst & Young, and my first project was in internal audit with Freddie Mac, the fabled mortgage financer in the United States. It was an eye-opening experience. My first foray into risk and assurance. It also left me with an off-taste for internal audit. The function at Freddie Mac was large and a bit green. They seemed to be reaching, with EY’s prodding, for findings. To prove its value and impact, internal audit may have been having the counter-effect.

From that very first project with IA, I graduated to other planets of the risk cosmos, including model risk, credit risk, and stress testing. I think I was good at risk work, but I felt that I was only marginally contributing to banks being able to manage their risk. It did not feel very impactful. I wanted to be on the front lines of a business, not analyzing the front lines’ maneuvres. I left EY for the Peace Corps with this thought on my mind.

Fast forward five years and I joined Olam’s Future Leaders Programme with the expectation of reaching the front lines of the agri-commodities industry. I spent the year preparing for those responsibilities and asking to be placed in procurement, operations, or supply chains. I thought it was going to happen until it didn’t. That’s when I graduated from IA 0.0 to IA 0.5, where I find myself today (20th floor, Marina Bay One, East Tower, Hot Desk #13, Singapore). I don’t even have the right set of clothes for IA. For the last year, I’ve been on farms and in warehouses and cookie factories. Now I’m in an office every day. I only packed two dress shirts in my suitcase.

I am the newest member of Olam’s IA squadron. IA strikes me as a very small team (around 14 members) for a $30 billion company. Although, then again, Olam has kept its managerial ranks quite lean throughout the years, which seems to serve it well. I am currently in Singapore, working with the leaders of IA to get trained and ready to conduct audits of Olam’s various business units around the world. My area of focus will be Latin America, with occasional travel to the rest of the world. I’ve been reading IA manuals (thrilling), risk policies (exhilarating), and recent audit reports (illuminating).

Francisco

The first audit report that I read was for our dairy farming operations in Uruguay. It would be unwise for me to share any details of the report on my public blog, so I’ll only go so far as to say that I’m glad that I was not the auditor that had to investigate the efficacy of the excrement separator machines. My colleague, Francisco, who has been in Uruguay since January, keeps saying that dairy is our most complicated and difficult business line. I’m beginning to think that he may actually be right!

Olam is involved in many interesting businesses. My time with IA is going to be extremely interesting, getting to visit and learn about so many of them. I could wind up at our logistics and port operations in Gabon, ship chartering in Dubai, a chicken hatchery in Nigeria, or a cocoa processing plant in Illinois. That’s not to mention Latin America, where we buy coffee in seven countries, cocoa in two countries, plus cotton, quinoa, chia seeds, amaranth, kidney beans, and have to deal with the moody heifers in Uruguay. The team seems to be well aware of the trap Freddie Mac and other IA functions around the world have fallen into. The small size of the team, lack of reliance on external consultants, and the tactical nature of the audits lead me to believe that as a team we are much more valuable to Olam than IA is for Freddie Mac.

I will not be able to hide behind the collective expertise of an entire IA department either. While the team values me as a member for my knowledge in operations, I’ll have to cover every aspect of the operation and finances while visiting the business units in Latin America and around the world. I’m going to have to brush off my accounting notes from business school. Most of my IA colleagues are actually CPA’s. I expect to be in Singapore for another week or so, reading reports, asking questions, and learning the basics. From here, I’ll start heading west. I may drop in for an audit or two along the way, along with visiting some IA colleagues in Dubai, London, or the US. In the meantime, it’s work during the day and wandering around Singapore by moonlight.