Internal Audit Log: 1.0

I’m in rural North Carolina with a Mexican, a South African, and a Pakistani. It sounds like the start of a politically incorrect bar joke, but this is actually my real life, and this post is my continual effort to chronicle my work and experiences as an internal auditor with the company I work for. Also, they are a great bunch of intelligent co-workers.

Day 1

My first audit (with my current employer)! I’m at one of our peanut processing plants; this one being located in Edenton, NC. Yes, there are warnings when you walk up to the factory. Do not enter under any circumstances if you have a peanut allergy. Luckily I do not have a peanut allergy, so I was able to enter the facility and continue with the audit.

This week I am mostly observing the audit fieldwork being done by my colleagues (the Mexican, South African, and Pakistani). I interject fairly frequently with questions of my own. In addition to learning about internal audit, I’m also trying to learn as much as I can about the peanut ingredients business, the edible nuts business, and the company’s business in the US.

The peanut ingredients business is very interesting. Just think about all of the snacks you may encounter with peanuts, in a variety of forms. … Many of those peanut ingredients come from this factory.

Day 2

Interested in the peanut supply chain? Here’s my simplified understanding:

1. A farmer grows peanuts (growing spans from eastern New Mexico to southern Virginia). The most productive area is the southern Alabama/Georgia border area.
2. A shelling company buys those peanuts and removes the shells
3. A blanching company roasts the peanuts and “blanches” them, meaning the redskin is removed and the peanut is split into its two halves
4. Further processing, such as granulating or grinding the peanuts into a paste
5. The peanuts or derivative ingredients are sold to a food company that incorporate them into their products (peanut butter, snack mixes, candy bars, etc.) and sell them to consumers

All peanuts that we regularly consume are roasted (or possibly boiled). We don’t regularly consume raw peanuts, nor would you want to.

Day 3

We cover an incredible amount of information over the four or so days of fieldwork. In addition to finance, inventory, and accounting, we cover health, safety, security, hygiene, sanitation, quality, food safety, environment, HR, and sustainability. You’d be quite glad to see the extent of efforts to ensure food safety, fair treatment of employees, and preservation of the natural environment. In addition to an internal auditor, I feel like the FDA, EPA, and OSHA.

After work on Wednesday, we went to Edenton’s waterfront on the Albermarle Sound. Edenton is a beautiful little town. It’s in Chowan County, the smallest of North Carolina’s 100 counties. Think of neat houses with wrap-around verandas. Brick houses right up on the sun-filled sound with calm water. On the main street, there’s even a little Sears, which just seems so 1920’s to me. Beyond the town, all we can see are fields of soya, cotton, corn, peanuts, and small pine forests.

Day 4

Today had my favorite moment of the audit. We were meeting with a manager and we recognized a risk with regards to how she uses computer files and e-mails. She leaned in close to her computer monitor and spoke to it, asking it not to make a mistake, as if Alexa were inside and could preempt her mistakes. Good Process & Controls.

Day 5

Today is the last day of the audit. We only worked a half a day so we can all get back to our homes in NY, Atlanta, or London, via the Norfolk, VA airport. We spent the early part of the morning discussing what we believe are the critical findings with regards to the peanut business, and the late morning presenting the findings to the peanuts management team. The management team was quite receptive, which was very encouraging to see.

Update: My flight from VA to NY was delayed three hours. I’m back in NY now.