December 13, 2023 • 35 mins
Embracing Internal Audit Evolution: A Conversation with Michael Drechnowicz, Head of Internal Audit at TK Elevator
In this episode, Michael shares his insights on the evolution of IA in his role as Head of Internal Audit with a major player in the global elevator and escalator industry.
His work demonstrates a shift from traditional finance-focus towards extensive business process coverage, ranging from sales to purchasing and fraud investigations.
We discuss the increasing importance of diversity in global audit teams and how technology, particularly Artificial Intelligence (AI) and data analytics, are transforming internal audit processes.
The conversation further touches on AI's importance in identifying and managing risks, improving process efficiency, and augmenting the learning experiences of junior auditors.
Looking ahead, Michael sees a promising and dynamic future for internal auditors amidst rapid digital transformation.
About this podcast
The podcast for performance auditors and internal auditors that use (or want to use) data.
Hosted by Conor McGarrity and Yusuf Moolla.
Produced by Risk Insights (riskinsights.com.au).
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Yusuf (00:00):
Hello and welcome to The Assurance Show.
today we have a special guest,Michael from TK Elevator.
Michael, I am not going to tryto pronounce your surname, so
I'm going to leave that for you.
Michael, welcome to the show.
Michael (00:14):
Thank you Yusuf, thanks for inviting me and I
get it a lot with my last name.
So it's not even worthmentioning, I guess
Michael is completely fine.
Yusuf (00:24):
Thanks for coming on the show, Michael.
Really interested inunderstanding, your background,
and a bit about the organizationthat you work for as well.
Michael (00:32):
I currently work as the head of internal
audit at TK Elevator.
PrIor to this, I worked quitesome time at DHL, also in the
internal audit area, mainlyin the finance audit area.
And prior to that, a few monthsin the company, I was studying
and learning ThyssenKruppSteel in the accounting.
(00:54):
So I have mainly a finance andaccounting background, but since
I switched to TK elevator it'smuch more than about finance.
We are covering everybusiness process, from sales
to purchasing we also do alot of fraud investigations.
So really the entire processis A to Z, we are covering
(01:15):
with our internal audit team.
And, we have a team of about 16auditors, all around the world.
We have offices in SouthAmerica and Asia Pacific.
In Europe, and we try tocover the around 100 entities
we have in our company.
And of course we also dosome functional audits,
which are not based onentities, but also based on
(01:38):
our functional structure.
We also have advisoryprojects in the area of
lecture service centers.
during implementation.
So my finance background wasdefinitely extended in the
last four and a half years atTK elevator, which is great,
which is very interesting.
Personally.
My parents are from Poland, soI speak Polish, German, English,
(02:02):
and that's also where thisdifficult surname comes from.
Yusuf (02:07):
Talking about multiple countries, you said you operate
in over a hundred countries.
Of course, everybody at somepoint would have stepped into
a TK elevator or maybe usesit two, three times a week
when they go into the office,jumping into an elevator that
was provided by yourselves.
And you know, 50, 000employees across the globe.
But what was really interestingis you mentioned that
(02:28):
your team, so you said youhave a team of 16 auditors,
but 10 nationalities.
So a lot of diversityjust in that itself.
Do you want to talk a littlebit about your thoughts on
DEI and what that has lookedlike within your team?
Michael (02:42):
Yeah, I think diversity is extremely important,
especially when you do auditsin different countries.
You also have to somehowensure that there is some
sort of cultural fit as well.
I would say currently we arefemale dominant in the team.
And we can also see it on themarket to be honest, because
we are currently recruiting.
(03:03):
And I would say 80 percentof the people we are actually
inviting to interviews, orthe headhunters give to us,
are female. So I can sense somesort of change in this, because
I remember every time a newcolleague came, I would say it
was 60-70 percent male probably.
But I can see definitelysome sort of switch I think
(03:25):
this is great because maybeinternal audit in the past
was seen as a male jobbecause of the traveling.
beCause of the stigma say thatthis is definitely not the case.
We have also many, manyfemale colleagues with kids.
And we just try to be very,very flexible for them
when it comes to traveling.
(03:45):
So instead of saying you haveto travel in this particular
two weeks we very early askthem what the best week is.
Of course, there are sometimesad hoc investigations or audits.
Where you need the flexibilitybut we always try to be flexible
and yeah, due to the fact thatwe have strong markets also in
(04:06):
China, for instance, so we havealso an office, in China with,
colleagues from China as well.
But also in our Europeanteams, we have really different
kinds of nationalities and wealmost do not speak German,
so all of our repos are inEnglish as well, even though
we are a German companycoming from ThyssenKrupp.
(04:27):
So it's extremely importantand it's also, I think, value
adding and everybody growspersonally because if you did
not have all of these differentnationalities, you would miss
all of these conversationsand aha and wow moments when
people talk about how they seethings how their culture is.
And yeah, it also createsa great spirit I would say.
(04:49):
And just great to see it.
Yusuf (04:51):
Excellent.
So Michael, what is it thatbrought you into internal audit?
Like why, explore acareer in internal audit?
Obviously there'slinks to accounting,
but what specificallyabout IA attracted you?
Michael (05:05):
Definitely the dynamics of this job.
So I always tell people whodon't know what internal
audit is about, that youwake up having a look
into financial figures.
Then before lunch, youlook into IT topics.
Then after lunch, you finalizemaybe a fraud investigation.
And then at the very end,you look how to make sales
(05:26):
processes more efficient.
So I would say that an internalauditor is the employee who
knows the company the best.
It's definitely nothingfor someone who likes
to to do always thesame or repeat the task.
It's definitely for people who,yeah, enjoy being challenged
every day with new topics.
(05:47):
And it's, and it's difficult.
I mean, new joiners alwaysvery often struggle because in
the end, sometimes in a veryshort time frame, you have to
be able to challenge peoplewho work in an area for 10, 20
years and you just started liketwo weeks of preparation and
you need to tell this personwho already works 10, 20 years
(06:10):
on a topic how to improve orhow he or she can improve.
And this is challenging.
This is also nice because youcan see that if you really allow
yourself to go into this processand really think about it, that
people will actually appreciatethis outside perspective.
And I think that from myperspective, the dynamics of
(06:32):
this job, it's really great.
It is also challenging from atravel perspective, of course.
Even though now more andmore can be done remotely,
of course, the COVID timesshowed us that some things
just can be done remotely, butif you talk about operational
audits, if you want to goto the guys in the factory,
you just have to be on site.
(06:52):
And this is not alwayseasy because it requires
two weeks outside of yourfamily when you have family.
And then, in our case there arepeople who really enjoy also the
fraud investigation team becauseyou really feel sometimes like
an agent, I would say, but somepeople just enjoy more to have
(07:13):
a more regular working life,meaning regular audits, six
weeks, then the next one for sixweeks, So they can really plan
better the private life as well.
Yusuf (07:24):
Fantastic.
Michael, you, you usedata a lot in your audits.
and you've been encouragingbroader use of data.
What is it about using datathat makes the audit better?
And how did you getinto that as a team?
Michael (07:41):
The general thought of using data analytics is
about giving more assuranceto the management and
also to understand reallythe processes completely.
So in the past auditors tendto do a lot of sampling.
So for instance, weselected 10 invoices.
(08:02):
Which was sent to the customerand five of these invoices
were incorrect or five of theseinvoices were only sent after
two weeks instead of directlyafter the service was provided.
With data analytics, you don'tdo these statements anymore.
You just tell the managementthat 20 percent of our
invoices with a value ofmillions of euros to you.
(08:24):
We're sent too late, so our cashflow was impaired by X days.
And then of course we dosampling to verify the data
analytics efforts we had.
Because also data is not always100 percent or does not always
give the opportunity to beinterpreted 100 percent correct.
(08:44):
So is, this is a big gamechanger because you really
can not only improve thesecurity of processes,
but also the efficiency.
So so what we always do also iswe have a look into the whole
picture, like how fast we dothings, how fast do we issue
invoices or how many invoicecancellations that you have.
(09:05):
Otherwise in sampling, youwould only give an idea
And then you would extrapolateit, but everybody knows
that when you extrapolate,room of error is very high.
Because you could testa very bad choice in the
sampling and have like nineincorrect samples, 90%,
but it doesn't mean thatyour entire population is
(09:26):
incorrect or 90 percent of it.
So I would say that thisis the main reason why we
went into this approach.
So you will see only veryfew findings which are
based on the few samples.
You would usually see findingswhich really say, for instance,
20 percent of our vendorinvoices did not have a relating
(09:47):
PO, which on the one sideshows you that a process would
be very insecure because youdidn't use purchase orders and
you didn't follow the process.
On the other side youalso, let's say, see the
complete extent of it.
So you know that, okay, 20percent of my purchasing
process is actually at risk.
And we didn't follow it.
Otherwise, in sampling, youalways get into discussions
(10:09):
with auditors where, Ah,but it's because you just
took the wrong sample.
No it's 20%.
And you can see since whenyou're using data analytics,
all findings speced up bydata analytics usually are not
discussed, are not disputed.
The ones which are disputedthe most are the sample ones.
(10:30):
So this makes also, let's say,the definition of measures
very easy because everybodycan see that it's actually
the case and it's in the data.
So I think it's, first of all.
Perhaps also to give tothe management a very
good overview about theentire process maturity,
security, and efficiency.
(10:51):
And on the other side, italso reduces, in the end,
the work, the post auditwork, with discussions, with
with measure implementation.
And then also the room of errorof measure is quite low, because
if you do measures or actionitems based on a sample, it
doesn't mean that these measureswill really be effective because
(11:13):
you actually don't know aboutthe extrapolated piece of it.
So I would say that yeah,this also makes it much more
efficient to, to have a concretemeasure and to have really
effective measures in the end.
Yusuf (11:28):
And that accuracy is important for
German stakeholders.
I remember traveling from Berlinto Dusseldorf with my wife after
a NIME conference a few yearsago, and it was either a two
hour trip or four hour trip,I can't remember on the Dr.
Bantrain, and a few minutesinto the journey the conductor
comes on and apologizesprofusely for the delay.
(11:49):
And we thought, oh, here we go,you know, it's going to be a
long time before we get there.
And the delay that hewas apologizing for
was two minutes, right?
Two minutes.
Oh, I'm really sorry, we'regoing to be late by two minutes.
You know, and apologizingso much that, like I said,
we thought it's going tobe a long time and it ended
up being two minutes andmy wife and I just laughed
because that's, ridiculous.
So that, that's thelevel of precision , that
(12:10):
you're looking for.
And obviously data helps, with getting to that , with
those sorts of stakeholders.
Yeah.
Michael (12:15):
I think probably, and this is also about culture,
I think one of the firstthings someone would tell
you about Germans, I wouldsay people think that we
always like to be on time.
We probably do more thanother cultures maybe.
But I think it's also drivenby this because you have very
(12:36):
often also people complainingabout one or two minute delays.
So that's probably also why,the conductors are trained
to even apologize for such,for such a small delay.
Yusuf (12:49):
Not many other places.
I mean, I'm in Australia and Icatch a bus into work every day.
Buses here are quite good,but you know, a 10 minute
delay is, normal andthere's no, it's just, it's
just, it's just accepted.
There's no, there'sno problem with it.
Um, you've been using KNIMEand obviously, was born 600
or so kilometers south of,where you are right now.
(13:10):
What is it that, attractedyou to KNIME and how do
you use it within the team?
Michael (13:15):
When we decided to go for KNILE, we were actually
convinced of, let's say, themultidimensional use of it.
So of course it is a dataanalytics tool where you
can process a lot of data,where you can analyze a
lot of data but you canuse it also, for instance,
for process automation.
So you can use it in orderto always create the same
(13:38):
reports, always to update thesame SharePoint site, which
otherwise a team member wouldhave to do and you can also
use it as a working paper.
Because you have all,all of these, let's say,
knots which are connectedand then you can just use
annotations and say this ismy database extracted from,
from SAP or whatever system.
(14:00):
This is the first auditstep I did and this is
how the data came out.
And then at the endyou have your result.
So if you use KNIMEcompletely, then you also
get rid of preparing workor extra working papers.
Because you can haveeverything in your online
project and it's even easierfor an external party.
(14:20):
So if you have a quality auditby an external party on your
internal audit department.
Then there will be probablynot so many questions
anymore when it comes totraceability of findings mainly.
Because you have everythingin one place and it's clear
which kind of data you use.
It's clear that you reconcilethe data with the system
so that you can also ensurecompleteness and accuracy.
(14:43):
So I think these threedimensional, I would
call it, use of KNIME,really convinced us.
And then we also really enjoythe portal of KNIME, where
you can ask questions, wherealso other people share their
use cases or their issues, andthen there are discussions.
So it was also very oftenthe case that based on the
(15:06):
discussions there with people,didn't even have to, let's say,
join the discussion alreadydiscussions which happened
one year, one week, one monthbefore the problem arised for
me, I could see, okay, someonehad this problem already
and I can now make use of itand it was always helpful.
So that's why we went forKNIME and I think that we are
(15:28):
now also having the plan touse it more and more and more.
So that's, let's say ourstrategy when it comes to,
to the data analytics tool.
Yeah,
Yusuf (15:38):
obviously a lot of what we do, we have an objective
in mind and we're looking todo, specific things, but, just
understanding how differentpeople have tackled different
problems or even that they can,is interesting because we don't
always know, what we don't knowin terms of natural language
processing or even some of themachine learning techniques
and just how, frankly, justhow easy it is when you pick
(16:00):
up a low-code tool like KNIMEBeyond that, within your team,
or maybe even more broadly forinternal audit, what do you
think the future for data, fortechnology, AI use will be
within internal audit practices?
Michael (16:16):
I think AI is already a big part of our work probably,
or should be already a big partof it because with, with AI
and I know that some companiesalready go into this direction.
We are also now going intothis direction to use ai for
instance to create report.
(16:37):
So there are different,different solutions.
Of course, you, due to thecriticality of the data and
the statements you do inthe report, you need ai,
which does not share thisinformation to improve.
The same AI.
So there are already, let'ssay, company solutions
where the data just remainswithin your company.
(17:00):
You can still use, for instance,ShareGPT, but you will have a
version which does not sharethe information you input there,
like if you do it privately.
So the chat GPT would not usethe internal information you put
in there to improve the product.
So I think this isextremely important because
sometimes we really havevery sensitive and strictly
(17:20):
confidential information.
buT I do think also and Iwas A few weeks ago I was
on the Congress in Polandin and the Institute of
Internal Auditors of Poland.
And we had a very interestingsession also hosted by the
ARC, the Audit Research Center.
And we were talking alsoabout audited the metaverse
(17:43):
and new ways of of learning.
And one thing which is actuallyvery interesting in and I think
education is also extremelyimportant in development.
It's one of the IIA standardsthat you have to regularly
train your employees.
And I think it, it goesinto the direction that it's
called serious business games.
(18:03):
I was it's called.
So you actually learn byplaying a game and I think
especially now the newgeneration do really enjoy it.
So and we also learned aboutways how to make remote meetings
also with auditors much morereal, let's say, so you would
be like in a virtual room wherepeople would see each other.
(18:26):
Some companies even useholograms, as I learned, so
it's completely like a sciencefiction movie, I would say.
But I do think that onething how to maybe make it
more digital to make peoplelearn and educate themselves.
The other one isdefinitely to automate.
Parts of the process which canbe automated because you, as
(18:50):
of now, I don't see how you canautomate, for instance, someone
going on an investigation andtrying to get information out
of whistleblowers or whoever.
I think this is still,of course, something a
human being has to do.
But then how you use thedata and how you process the
(19:10):
data, definitely we want togo into the direction of AI.
And to give you a very goodexample, in investigation,
you also have a lookinto chat protocols, and
you have a lot of them.
So sometimes you maybetalk about 100 chats of one
individual, because thisindividual has contact with a
(19:31):
lot of people in the company.
Thank you.
And then you don't want to gothrough all the 100 of them, you
want to identify which are thechats, which are relevant for
you, where are the red flags.
So, if you would put piecesof this chat into chat gpt,
then chat gpt would also beable to tell you that in one
(19:52):
chat protocol the relationshipseems to be more private,
and the other one verydistant, there is a lot of
distance, and professional.
And I, I did some cases of itwhere I just created a fake
chat, of course, not withreal data, but the fake chat.
And it was quite accuratethe assumptions JetGPT had.
(20:13):
So you can also, let's say,do these very, very subjective
assessments by JetGPT.
And it helps you at least, maybenot to identify everything,
but to focus primarily on, onthe first three or four chats.
Which already takea lot of time.
So also in this dataprocessing activities,
this could be of interest.
(20:35):
And this is something we arecurrently exploring because
it would make our processmuch, much more efficient.
Yusuf (20:42):
Okay, so you're using AI to help you sift through the
various types of conversationsto find those that you need
to focus on and then a humanwill go in and actually
focus on that and understandexactly what's going on.
Michael (20:56):
this is the plan.
We are not quite there yet.
I mean, it requires also alot I mean, to ensure that the
data is really safe and so on.
But based on fictitious casesI could already see that this
will be actually helpful.
So now we, we made thedecision that we want
to go in this direction.
Because it's quiteamazing how accurate the
(21:20):
assumption of chat GPT was.
Which chat is more ofrelevant in terms of personal
relationship, for instance,with the supplier or with
another decision maker?
Yusuf (21:29):
So the question then is, you cutting out
work that often more juniorauditors would learn from.
What does that do in terms ofthe learning experience and
the learning journey for thoseyounger auditors that are,
starting out in , their career?
Michael (21:47):
good question.
I mean, you, get that a lot.
there are, of course, sometimesconcern from people who then
think that their job will becut because AI is taking over.
But for us, to be honestwe already automated
some of the processes.
And it's the same, like if youimplement an audit management
system, then you don't needso much resources anymore.
(22:09):
In terms of maintainingdifferent data sets, to
put them together so alsoin our management system,
we'll always reduce, yourSG& A effort, I would say.
But what we always dois we then assign people
to, to more complex taskswhere they can learn.
I mean, instead of going througha chat and then tell the senior
(22:30):
which chats from his or herperspective is more interesting
the junior auditor can then usethe chats suggested by ChatGPT,
go already through them, andthen make already suggestions
to the senior, okay, I see herethis and this indication, or
maybe even I have the evidence,which we were looking for.
So instead of using the timeto go through the 100 chats and
(22:50):
then identifying what could beinteresting or relevant for the
senior he or she can just godirectly in the chat suggested
by the chat GCT and then say,okay, please pay attention,
especially on page two 100,because this seems to be very
interesting, very suspicious.
(23:10):
So, it's not about, I think,cutting the work and learning
experience of juniors, it'sprobably more to already give
them some more complex and morecontent related work, because
what you get a lot also fromworking students, and I think
the working students thatwe always had and have, they
(23:31):
are the best example for it.
You don't use the workingstudents anymore to create
Excel, of course, as well.
This is also part of the jobbecause you don't want a senior
manager to, to do this work.
But we have already caseswhere let's say a working
student maybe contributed 50percent to an audit, which
requires mainly data analytics.
(23:54):
So that the senior just wentthrough it, confirmed it's okay.
So in the end you can see alsothe new generation coming in.
They also probably want morecomplex topics at the beginning.
They get maybe even bored.
quicker than maybe we did inthe past because they already
grow up with this very efficientAI solutions, with the very
(24:18):
efficient systems and so on.
So, I think that this isalso important now for the
new generation to give themcomplex tasks from the very
beginning, which maybe do notrequire experience in this
area, but which require theknowledge how to use AI, how
to use different systems.
And this is somethingthey learn quite early.
(24:42):
So I think that this actuallywill help to attract talent
when you say, okay, listen,we use AI and this is
how we use it instead of,okay, you will have to go
through 100 chats manually.
I think that like this, we willnot be able to attract talent
anymore and it's already verycompetitive market for talent.
Yusuf (25:02):
That's really interesting.
I hadn't really had that,perspective explained and
that's, it makes a lot of sense.
So might.
Elevate the work thatinternal auditors do and
particularly coming in.
So the quality of internalaudit might actually
just end up going up
Michael (25:18):
Yeah, I do think so.
And I think also that youwill be able to cover more
risk because currently whenyou do an annual audit plan,
you have a certain percentageof your manpower assigned
to administrative tasks.
So to maintain a database orto even do this work, which
(25:39):
is required to go throughchat, to go through emails
or to go through documents.
But if you reduce it already by,I don't know, 10 10 percentage
points go to the real audit workand then you cover maybe one
or two entities more and thenyour risk score is also higher.
and then you can provideeven more assurance
to the management.
(26:00):
So of course there is alwaysthe perception that, okay,
now we can cut resourcesbecause we are automated.
The other way is to say, okay,now we can use this safe time
to even add more risk coverageinto our audit plan or to even
have whistleblower cases orfraud investigation cases.
Faster or even morethan we already do.
(26:22):
So, there are, I think,two perspectives to it, and
definitely the, the secondone, I think, is the one
where probably every auditdepartment wants to go, but
then, of course, it also dependson the company environment
and, and how the companyis currently performing.
But I would see it ratherfrom, from this perspective.
Yusuf (26:42):
Fantastic.
So that's, for juniors.
And just wanted to switchvery quickly to, you know,
for experienced auditors.
You and I have been doingthis for many, many years,
or maybe intermediateauditors who've been around
for five to 10 years.
What do you think thelearning curve is like?
is it very steep?
Is there a lot of timethat's going to have to
be spent over the next fewyears getting people up to
speed that have been doingthings in a particular way?
(27:03):
Cause it's always harder tobreak, established habits
and patterns than it is tolearn something brand new
for the first time, right?
Michael (27:11):
I definitely agree.
So if you have people whowork for 15 to 20 years in
the sampling method, In thisokay, I interviewed the auditee
and generate my findingsalready through the interview.
Then I just take a sampleto confirm my interview
findings, so to say.
So then it's definitely moredifficult for someone to
(27:34):
get into this data analyticapproach to get into AI.
While people who just startwith internal audit, and
it's not only the juniorsor the people who just come
from university, you also seewhen someone from inside the
company with already 10 to 15years experience department.
(27:54):
And we have it quite oftenbecause we also want of
course, internal experts whothen come to our department.
Then for them, it's alsothen much easier to learn
and adapt this approach.
We have then by someonewho was working, let's say
10 to 20 years in anotheraudit department, only doing
sampling and not really goinginto this level of detail.
(28:19):
It's very, very difficult forthem to learn it, but it's of
course not with all people.
I think in general human beingshave sometimes problems with
change or it's definitelymore inconvenient to change
your approach, of course.
But what I experienced is thatwhen you can really show the
people that it's actually worthit, and then also if you have
(28:42):
the feedback from the auditee.
And then also when experiencedauditors come to me and
say, okay, how much do youdiscuss with your auditors?
I say, not so much.
I mean, it depends on thetiming, but if you have a
data analytics and if youhave let's say statement
on the entire population,you don't discuss so much.
(29:03):
And this is also whatmotivates them that the
work is appreciated.
And that they don'thave a lot of room for
error in discussions.
And I think that thisis something which
motivates them as well.
But I think with every humanbeing, not only in internal
audit, but in general, whenyou do something for 20
years, of course, it takessome time to a new approach.
(29:27):
But my experience, at leastin our company we had always
good and positive cases wherepeople adapted quite quickly.
But it didn't happenovernight definitely.
And I think you cannotexpect it from everyone.
and you also want theexpertise these people
get in the 15 to 20 years.
And this is also nothing AI ordata analytics will replace.
(29:50):
So that's why I think you haveto give some people some time
but it's very individually,it's not everybody the same
but yeah, if you have someonewho comes just freshly in to
the department, it doesn'tmatter if it's If it's an
experienced person or not thenI think it's just easier to
adapt to it because you doit from the very beginning.
(30:12):
So you don't have to, let'ssay, break through this
stigma you, had the last year.
I think,
Yusuf (30:18):
That's encouraging, right?
So about a patience andsupport and helping people
to, to cope with the changesreally what we're going to
be seeing over the next fewyears because I don't have
stats and anecdotally, you'dthink that, maybe half of
our auditors are experiencedand half new coming in.
So there's a fairly large cohortof experienced auditors that.
(30:39):
need some patience andneed some encouragement to
get to the next level.
but the future is bright giventhe level of coverage that we.
can start to enable andjust provide more value
particularly in those areasthat we couldn't cover because
we just didn't have enoughbudget or enough resources.
So that's good.
Michael, what's the futurefor you and, your team?
What are you excitedabout particularly over
the next couple of years.
Michael (31:00):
We really enjoy being back also with
travel, with the directcontact with the companies.
I mean, though COVID is alreadyone and a half years or so
ago we still have countrieswhere it was difficult
to travel to when we talkabout China, for instance.
So we did not have the chancein the last four years to have,
(31:21):
for instance, our annual auditconference to meet everybody.
And even though a lot ofpeople are already here for
two, three, four years it'sreally yeah, sad to see that
most of the people did notmeet each other personally.
So what we are lookingforward now as well is the
personal contact, the, thephysical meeting, we will
(31:41):
have our audit conference.
Now in a few weeks, the firsttime since we set up the
internal audit department atTKElevator four years ago.
So we are looking forward tomore, let's say interaction
between the teams to more jointaudits between the regions.
And we see it also inthe employee survey
our company is doing.
(32:02):
on an annual basis.
So in our department,people really miss let's
say, the interaction.
So they want theywant joint audits.
They also want tosee other cultures.
And they are also, let'ssay, interested because every
time we have our global fixremotely people talk about their
audits, about their cultures.
(32:23):
And it's, I think, veryinteresting for the people
to go there and alsoexperience it, especially.
For, for the younger peoplewho did not travel so much
to, to different countries.
So we are definitelylooking forward to more
personal contact, notonly within the team, but
also with the auditees.
And I think we are also prettymuch looking forward to the
(32:48):
fact that we have all the timeand let's say new audit topics.
And I would say that our companyis quite on a digital journey,
so we have digitalizationalso in elevator business
also use of AI over there.
But this, yeah, this alwayschanging environment also
(33:10):
in our company makes itexciting because we will
have always new audit topics.
Because our company is isdeveloping very quickly,
it's very dynamic verycompetitive market, the
elevator market, of course.
So, we recently also launcheda new product which also
required to set up newsystems and processes.
(33:30):
So yeah, I think the peoplein my department, they, they
know that they will never doalways the same, there will
be always something new.
This is what we are looking for.
The dynamics of this job, Ithink this will never change.
Doesn't matter if there will beAI or not, I think the people
who work in internal auditwill always have a dynamic job.
Yusuf (33:53):
That sounds really exciting.
It sounds like a niceplace to be at the moment.
So well done on creating thatlevel of excitement within
an internal audit team foryour existing, team members
and also those lookingto come in and join you.
And I know you, you'realways looking for good
people to join you, Michael.
Michael (34:10):
Yeah, always search for people, if
your everyday experienceshould be very dynamic.
And you don't want to knowwhen you go to bed, what
will wait for you the nextday and definitely this
is the right place to be.
Yusuf (34:25):
Excellent.
Michael, thank you somuch for joining us today.
Really interesting conversationthat I'm sure a lot of people
will take good info away from.
What's the, for those thatwant to find out more about
you and your team, think aboutjoining, et cetera what's
the best way to contact you?
Michael (34:41):
on LinkedIn I mean.
The name will be written.
So it's not so easy to find,but the good thing when it comes
to my name is when you put itinto LinkedIn, there are not so
many people which will appear,so you'll find me quite quickly.
Yusuf (34:55):
Okay, so that, that uniqueness is definitely a plus.
we'll put a link to yourLinkedIn profile in the
show notes, Michael.
Thank you so muchfor joining us again.
Michael (35:03):
Thank you Yusuf, have a nice weekend.
Hello and welcome to The Assurance Show.
today we have a special guest,Michael from TK Elevator.
Michael, I am not going to tryto pronounce your surname, so
I'm going to leave that for you.
Michael, welcome to the show.
Michael (00:14):
Thank you Yusuf, thanks for inviting me and I
get it a lot with my last name.
So it's not even worthmentioning, I guess
Michael is completely fine.
Yusuf (00:24):
Thanks for coming on the show, Michael.
Really interested inunderstanding, your background,
and a bit about the organizationthat you work for as well.
Michael (00:32):
I currently work as the head of internal
audit at TK Elevator.
PrIor to this, I worked quitesome time at DHL, also in the
internal audit area, mainlyin the finance audit area.
And prior to that, a few monthsin the company, I was studying
and learning ThyssenKruppSteel in the accounting.
(00:54):
So I have mainly a finance andaccounting background, but since
I switched to TK elevator it'smuch more than about finance.
We are covering everybusiness process, from sales
to purchasing we also do alot of fraud investigations.
So really the entire processis A to Z, we are covering
(01:15):
with our internal audit team.
And, we have a team of about 16auditors, all around the world.
We have offices in SouthAmerica and Asia Pacific.
In Europe, and we try tocover the around 100 entities
we have in our company.
And of course we also dosome functional audits,
which are not based onentities, but also based on
(01:38):
our functional structure.
We also have advisoryprojects in the area of
lecture service centers.
during implementation.
So my finance background wasdefinitely extended in the
last four and a half years atTK elevator, which is great,
which is very interesting.
Personally.
My parents are from Poland, soI speak Polish, German, English,
(02:02):
and that's also where thisdifficult surname comes from.
Yusuf (02:07):
Talking about multiple countries, you said you operate
in over a hundred countries.
Of course, everybody at somepoint would have stepped into
a TK elevator or maybe usesit two, three times a week
when they go into the office,jumping into an elevator that
was provided by yourselves.
And you know, 50, 000employees across the globe.
But what was really interestingis you mentioned that
(02:28):
your team, so you said youhave a team of 16 auditors,
but 10 nationalities.
So a lot of diversityjust in that itself.
Do you want to talk a littlebit about your thoughts on
DEI and what that has lookedlike within your team?
Michael (02:42):
Yeah, I think diversity is extremely important,
especially when you do auditsin different countries.
You also have to somehowensure that there is some
sort of cultural fit as well.
I would say currently we arefemale dominant in the team.
And we can also see it on themarket to be honest, because
we are currently recruiting.
(03:03):
And I would say 80 percentof the people we are actually
inviting to interviews, orthe headhunters give to us,
are female. So I can sense somesort of change in this, because
I remember every time a newcolleague came, I would say it
was 60-70 percent male probably.
But I can see definitelysome sort of switch I think
(03:25):
this is great because maybeinternal audit in the past
was seen as a male jobbecause of the traveling.
beCause of the stigma say thatthis is definitely not the case.
We have also many, manyfemale colleagues with kids.
And we just try to be very,very flexible for them
when it comes to traveling.
(03:45):
So instead of saying you haveto travel in this particular
two weeks we very early askthem what the best week is.
Of course, there are sometimesad hoc investigations or audits.
Where you need the flexibilitybut we always try to be flexible
and yeah, due to the fact thatwe have strong markets also in
(04:06):
China, for instance, so we havealso an office, in China with,
colleagues from China as well.
But also in our Europeanteams, we have really different
kinds of nationalities and wealmost do not speak German,
so all of our repos are inEnglish as well, even though
we are a German companycoming from ThyssenKrupp.
(04:27):
So it's extremely importantand it's also, I think, value
adding and everybody growspersonally because if you did
not have all of these differentnationalities, you would miss
all of these conversationsand aha and wow moments when
people talk about how they seethings how their culture is.
And yeah, it also createsa great spirit I would say.
(04:49):
And just great to see it.
Yusuf (04:51):
Excellent.
So Michael, what is it thatbrought you into internal audit?
Like why, explore acareer in internal audit?
Obviously there'slinks to accounting,
but what specificallyabout IA attracted you?
Michael (05:05):
Definitely the dynamics of this job.
So I always tell people whodon't know what internal
audit is about, that youwake up having a look
into financial figures.
Then before lunch, youlook into IT topics.
Then after lunch, you finalizemaybe a fraud investigation.
And then at the very end,you look how to make sales
(05:26):
processes more efficient.
So I would say that an internalauditor is the employee who
knows the company the best.
It's definitely nothingfor someone who likes
to to do always thesame or repeat the task.
It's definitely for people who,yeah, enjoy being challenged
every day with new topics.
(05:47):
And it's, and it's difficult.
I mean, new joiners alwaysvery often struggle because in
the end, sometimes in a veryshort time frame, you have to
be able to challenge peoplewho work in an area for 10, 20
years and you just started liketwo weeks of preparation and
you need to tell this personwho already works 10, 20 years
(06:10):
on a topic how to improve orhow he or she can improve.
And this is challenging.
This is also nice because youcan see that if you really allow
yourself to go into this processand really think about it, that
people will actually appreciatethis outside perspective.
And I think that from myperspective, the dynamics of
(06:32):
this job, it's really great.
It is also challenging from atravel perspective, of course.
Even though now more andmore can be done remotely,
of course, the COVID timesshowed us that some things
just can be done remotely, butif you talk about operational
audits, if you want to goto the guys in the factory,
you just have to be on site.
(06:52):
And this is not alwayseasy because it requires
two weeks outside of yourfamily when you have family.
And then, in our case there arepeople who really enjoy also the
fraud investigation team becauseyou really feel sometimes like
an agent, I would say, but somepeople just enjoy more to have
(07:13):
a more regular working life,meaning regular audits, six
weeks, then the next one for sixweeks, So they can really plan
better the private life as well.
Yusuf (07:24):
Fantastic.
Michael, you, you usedata a lot in your audits.
and you've been encouragingbroader use of data.
What is it about using datathat makes the audit better?
And how did you getinto that as a team?
Michael (07:41):
The general thought of using data analytics is
about giving more assuranceto the management and
also to understand reallythe processes completely.
So in the past auditors tendto do a lot of sampling.
So for instance, weselected 10 invoices.
(08:02):
Which was sent to the customerand five of these invoices
were incorrect or five of theseinvoices were only sent after
two weeks instead of directlyafter the service was provided.
With data analytics, you don'tdo these statements anymore.
You just tell the managementthat 20 percent of our
invoices with a value ofmillions of euros to you.
(08:24):
We're sent too late, so our cashflow was impaired by X days.
And then of course we dosampling to verify the data
analytics efforts we had.
Because also data is not always100 percent or does not always
give the opportunity to beinterpreted 100 percent correct.
(08:44):
So is, this is a big gamechanger because you really
can not only improve thesecurity of processes,
but also the efficiency.
So so what we always do also iswe have a look into the whole
picture, like how fast we dothings, how fast do we issue
invoices or how many invoicecancellations that you have.
(09:05):
Otherwise in sampling, youwould only give an idea
And then you would extrapolateit, but everybody knows
that when you extrapolate,room of error is very high.
Because you could testa very bad choice in the
sampling and have like nineincorrect samples, 90%,
but it doesn't mean thatyour entire population is
(09:26):
incorrect or 90 percent of it.
So I would say that thisis the main reason why we
went into this approach.
So you will see only veryfew findings which are
based on the few samples.
You would usually see findingswhich really say, for instance,
20 percent of our vendorinvoices did not have a relating
(09:47):
PO, which on the one sideshows you that a process would
be very insecure because youdidn't use purchase orders and
you didn't follow the process.
On the other side youalso, let's say, see the
complete extent of it.
So you know that, okay, 20percent of my purchasing
process is actually at risk.
And we didn't follow it.
Otherwise, in sampling, youalways get into discussions
(10:09):
with auditors where, Ah,but it's because you just
took the wrong sample.
No it's 20%.
And you can see since whenyou're using data analytics,
all findings speced up bydata analytics usually are not
discussed, are not disputed.
The ones which are disputedthe most are the sample ones.
(10:30):
So this makes also, let's say,the definition of measures
very easy because everybodycan see that it's actually
the case and it's in the data.
So I think it's, first of all.
Perhaps also to give tothe management a very
good overview about theentire process maturity,
security, and efficiency.
(10:51):
And on the other side, italso reduces, in the end,
the work, the post auditwork, with discussions, with
with measure implementation.
And then also the room of errorof measure is quite low, because
if you do measures or actionitems based on a sample, it
doesn't mean that these measureswill really be effective because
(11:13):
you actually don't know aboutthe extrapolated piece of it.
So I would say that yeah,this also makes it much more
efficient to, to have a concretemeasure and to have really
effective measures in the end.
Yusuf (11:28):
And that accuracy is important for
German stakeholders.
I remember traveling from Berlinto Dusseldorf with my wife after
a NIME conference a few yearsago, and it was either a two
hour trip or four hour trip,I can't remember on the Dr.
Bantrain, and a few minutesinto the journey the conductor
comes on and apologizesprofusely for the delay.
(11:49):
And we thought, oh, here we go,you know, it's going to be a
long time before we get there.
And the delay that hewas apologizing for
was two minutes, right?
Two minutes.
Oh, I'm really sorry, we'regoing to be late by two minutes.
You know, and apologizingso much that, like I said,
we thought it's going tobe a long time and it ended
up being two minutes andmy wife and I just laughed
because that's, ridiculous.
So that, that's thelevel of precision , that
(12:10):
you're looking for.
And obviously data helps, with getting to that , with
those sorts of stakeholders.
Yeah.
Michael (12:15):
I think probably, and this is also about culture,
I think one of the firstthings someone would tell
you about Germans, I wouldsay people think that we
always like to be on time.
We probably do more thanother cultures maybe.
But I think it's also drivenby this because you have very
(12:36):
often also people complainingabout one or two minute delays.
So that's probably also why,the conductors are trained
to even apologize for such,for such a small delay.
Yusuf (12:49):
Not many other places.
I mean, I'm in Australia and Icatch a bus into work every day.
Buses here are quite good,but you know, a 10 minute
delay is, normal andthere's no, it's just, it's
just, it's just accepted.
There's no, there'sno problem with it.
Um, you've been using KNIMEand obviously, was born 600
or so kilometers south of,where you are right now.
(13:10):
What is it that, attractedyou to KNIME and how do
you use it within the team?
Michael (13:15):
When we decided to go for KNILE, we were actually
convinced of, let's say, themultidimensional use of it.
So of course it is a dataanalytics tool where you
can process a lot of data,where you can analyze a
lot of data but you canuse it also, for instance,
for process automation.
So you can use it in orderto always create the same
(13:38):
reports, always to update thesame SharePoint site, which
otherwise a team member wouldhave to do and you can also
use it as a working paper.
Because you have all,all of these, let's say,
knots which are connectedand then you can just use
annotations and say this ismy database extracted from,
from SAP or whatever system.
(14:00):
This is the first auditstep I did and this is
how the data came out.
And then at the endyou have your result.
So if you use KNIMEcompletely, then you also
get rid of preparing workor extra working papers.
Because you can haveeverything in your online
project and it's even easierfor an external party.
(14:20):
So if you have a quality auditby an external party on your
internal audit department.
Then there will be probablynot so many questions
anymore when it comes totraceability of findings mainly.
Because you have everythingin one place and it's clear
which kind of data you use.
It's clear that you reconcilethe data with the system
so that you can also ensurecompleteness and accuracy.
(14:43):
So I think these threedimensional, I would
call it, use of KNIME,really convinced us.
And then we also really enjoythe portal of KNIME, where
you can ask questions, wherealso other people share their
use cases or their issues, andthen there are discussions.
So it was also very oftenthe case that based on the
(15:06):
discussions there with people,didn't even have to, let's say,
join the discussion alreadydiscussions which happened
one year, one week, one monthbefore the problem arised for
me, I could see, okay, someonehad this problem already
and I can now make use of itand it was always helpful.
So that's why we went forKNIME and I think that we are
(15:28):
now also having the plan touse it more and more and more.
So that's, let's say ourstrategy when it comes to,
to the data analytics tool.
Yeah,
Yusuf (15:38):
obviously a lot of what we do, we have an objective
in mind and we're looking todo, specific things, but, just
understanding how differentpeople have tackled different
problems or even that they can,is interesting because we don't
always know, what we don't knowin terms of natural language
processing or even some of themachine learning techniques
and just how, frankly, justhow easy it is when you pick
(16:00):
up a low-code tool like KNIMEBeyond that, within your team,
or maybe even more broadly forinternal audit, what do you
think the future for data, fortechnology, AI use will be
within internal audit practices?
Michael (16:16):
I think AI is already a big part of our work probably,
or should be already a big partof it because with, with AI
and I know that some companiesalready go into this direction.
We are also now going intothis direction to use ai for
instance to create report.
(16:37):
So there are different,different solutions.
Of course, you, due to thecriticality of the data and
the statements you do inthe report, you need ai,
which does not share thisinformation to improve.
The same AI.
So there are already, let'ssay, company solutions
where the data just remainswithin your company.
(17:00):
You can still use, for instance,ShareGPT, but you will have a
version which does not sharethe information you input there,
like if you do it privately.
So the chat GPT would not usethe internal information you put
in there to improve the product.
So I think this isextremely important because
sometimes we really havevery sensitive and strictly
(17:20):
confidential information.
buT I do think also and Iwas A few weeks ago I was
on the Congress in Polandin and the Institute of
Internal Auditors of Poland.
And we had a very interestingsession also hosted by the
ARC, the Audit Research Center.
And we were talking alsoabout audited the metaverse
(17:43):
and new ways of of learning.
And one thing which is actuallyvery interesting in and I think
education is also extremelyimportant in development.
It's one of the IIA standardsthat you have to regularly
train your employees.
And I think it, it goesinto the direction that it's
called serious business games.
(18:03):
I was it's called.
So you actually learn byplaying a game and I think
especially now the newgeneration do really enjoy it.
So and we also learned aboutways how to make remote meetings
also with auditors much morereal, let's say, so you would
be like in a virtual room wherepeople would see each other.
(18:26):
Some companies even useholograms, as I learned, so
it's completely like a sciencefiction movie, I would say.
But I do think that onething how to maybe make it
more digital to make peoplelearn and educate themselves.
The other one isdefinitely to automate.
Parts of the process which canbe automated because you, as
(18:50):
of now, I don't see how you canautomate, for instance, someone
going on an investigation andtrying to get information out
of whistleblowers or whoever.
I think this is still,of course, something a
human being has to do.
But then how you use thedata and how you process the
(19:10):
data, definitely we want togo into the direction of AI.
And to give you a very goodexample, in investigation,
you also have a lookinto chat protocols, and
you have a lot of them.
So sometimes you maybetalk about 100 chats of one
individual, because thisindividual has contact with a
(19:31):
lot of people in the company.
Thank you.
And then you don't want to gothrough all the 100 of them, you
want to identify which are thechats, which are relevant for
you, where are the red flags.
So, if you would put piecesof this chat into chat gpt,
then chat gpt would also beable to tell you that in one
(19:52):
chat protocol the relationshipseems to be more private,
and the other one verydistant, there is a lot of
distance, and professional.
And I, I did some cases of itwhere I just created a fake
chat, of course, not withreal data, but the fake chat.
And it was quite accuratethe assumptions JetGPT had.
(20:13):
So you can also, let's say,do these very, very subjective
assessments by JetGPT.
And it helps you at least, maybenot to identify everything,
but to focus primarily on, onthe first three or four chats.
Which already takea lot of time.
So also in this dataprocessing activities,
this could be of interest.
(20:35):
And this is something we arecurrently exploring because
it would make our processmuch, much more efficient.
Yusuf (20:42):
Okay, so you're using AI to help you sift through the
various types of conversationsto find those that you need
to focus on and then a humanwill go in and actually
focus on that and understandexactly what's going on.
Michael (20:56):
this is the plan.
We are not quite there yet.
I mean, it requires also alot I mean, to ensure that the
data is really safe and so on.
But based on fictitious casesI could already see that this
will be actually helpful.
So now we, we made thedecision that we want
to go in this direction.
Because it's quiteamazing how accurate the
(21:20):
assumption of chat GPT was.
Which chat is more ofrelevant in terms of personal
relationship, for instance,with the supplier or with
another decision maker?
Yusuf (21:29):
So the question then is, you cutting out
work that often more juniorauditors would learn from.
What does that do in terms ofthe learning experience and
the learning journey for thoseyounger auditors that are,
starting out in , their career?
Michael (21:47):
good question.
I mean, you, get that a lot.
there are, of course, sometimesconcern from people who then
think that their job will becut because AI is taking over.
But for us, to be honestwe already automated
some of the processes.
And it's the same, like if youimplement an audit management
system, then you don't needso much resources anymore.
(22:09):
In terms of maintainingdifferent data sets, to
put them together so alsoin our management system,
we'll always reduce, yourSG& A effort, I would say.
But what we always dois we then assign people
to, to more complex taskswhere they can learn.
I mean, instead of going througha chat and then tell the senior
(22:30):
which chats from his or herperspective is more interesting
the junior auditor can then usethe chats suggested by ChatGPT,
go already through them, andthen make already suggestions
to the senior, okay, I see herethis and this indication, or
maybe even I have the evidence,which we were looking for.
So instead of using the timeto go through the 100 chats and
(22:50):
then identifying what could beinteresting or relevant for the
senior he or she can just godirectly in the chat suggested
by the chat GCT and then say,okay, please pay attention,
especially on page two 100,because this seems to be very
interesting, very suspicious.
(23:10):
So, it's not about, I think,cutting the work and learning
experience of juniors, it'sprobably more to already give
them some more complex and morecontent related work, because
what you get a lot also fromworking students, and I think
the working students thatwe always had and have, they
(23:31):
are the best example for it.
You don't use the workingstudents anymore to create
Excel, of course, as well.
This is also part of the jobbecause you don't want a senior
manager to, to do this work.
But we have already caseswhere let's say a working
student maybe contributed 50percent to an audit, which
requires mainly data analytics.
(23:54):
So that the senior just wentthrough it, confirmed it's okay.
So in the end you can see alsothe new generation coming in.
They also probably want morecomplex topics at the beginning.
They get maybe even bored.
quicker than maybe we did inthe past because they already
grow up with this very efficientAI solutions, with the very
(24:18):
efficient systems and so on.
So, I think that this isalso important now for the
new generation to give themcomplex tasks from the very
beginning, which maybe do notrequire experience in this
area, but which require theknowledge how to use AI, how
to use different systems.
And this is somethingthey learn quite early.
(24:42):
So I think that this actuallywill help to attract talent
when you say, okay, listen,we use AI and this is
how we use it instead of,okay, you will have to go
through 100 chats manually.
I think that like this, we willnot be able to attract talent
anymore and it's already verycompetitive market for talent.
Yusuf (25:02):
That's really interesting.
I hadn't really had that,perspective explained and
that's, it makes a lot of sense.
So might.
Elevate the work thatinternal auditors do and
particularly coming in.
So the quality of internalaudit might actually
just end up going up
Michael (25:18):
Yeah, I do think so.
And I think also that youwill be able to cover more
risk because currently whenyou do an annual audit plan,
you have a certain percentageof your manpower assigned
to administrative tasks.
So to maintain a database orto even do this work, which
(25:39):
is required to go throughchat, to go through emails
or to go through documents.
But if you reduce it already by,I don't know, 10 10 percentage
points go to the real audit workand then you cover maybe one
or two entities more and thenyour risk score is also higher.
and then you can provideeven more assurance
to the management.
(26:00):
So of course there is alwaysthe perception that, okay,
now we can cut resourcesbecause we are automated.
The other way is to say, okay,now we can use this safe time
to even add more risk coverageinto our audit plan or to even
have whistleblower cases orfraud investigation cases.
Faster or even morethan we already do.
(26:22):
So, there are, I think,two perspectives to it, and
definitely the, the secondone, I think, is the one
where probably every auditdepartment wants to go, but
then, of course, it also dependson the company environment
and, and how the companyis currently performing.
But I would see it ratherfrom, from this perspective.
Yusuf (26:42):
Fantastic.
So that's, for juniors.
And just wanted to switchvery quickly to, you know,
for experienced auditors.
You and I have been doingthis for many, many years,
or maybe intermediateauditors who've been around
for five to 10 years.
What do you think thelearning curve is like?
is it very steep?
Is there a lot of timethat's going to have to
be spent over the next fewyears getting people up to
speed that have been doingthings in a particular way?
(27:03):
Cause it's always harder tobreak, established habits
and patterns than it is tolearn something brand new
for the first time, right?
Michael (27:11):
I definitely agree.
So if you have people whowork for 15 to 20 years in
the sampling method, In thisokay, I interviewed the auditee
and generate my findingsalready through the interview.
Then I just take a sampleto confirm my interview
findings, so to say.
So then it's definitely moredifficult for someone to
(27:34):
get into this data analyticapproach to get into AI.
While people who just startwith internal audit, and
it's not only the juniorsor the people who just come
from university, you also seewhen someone from inside the
company with already 10 to 15years experience department.
(27:54):
And we have it quite oftenbecause we also want of
course, internal experts whothen come to our department.
Then for them, it's alsothen much easier to learn
and adapt this approach.
We have then by someonewho was working, let's say
10 to 20 years in anotheraudit department, only doing
sampling and not really goinginto this level of detail.
(28:19):
It's very, very difficult forthem to learn it, but it's of
course not with all people.
I think in general human beingshave sometimes problems with
change or it's definitelymore inconvenient to change
your approach, of course.
But what I experienced is thatwhen you can really show the
people that it's actually worthit, and then also if you have
(28:42):
the feedback from the auditee.
And then also when experiencedauditors come to me and
say, okay, how much do youdiscuss with your auditors?
I say, not so much.
I mean, it depends on thetiming, but if you have a
data analytics and if youhave let's say statement
on the entire population,you don't discuss so much.
(29:03):
And this is also whatmotivates them that the
work is appreciated.
And that they don'thave a lot of room for
error in discussions.
And I think that thisis something which
motivates them as well.
But I think with every humanbeing, not only in internal
audit, but in general, whenyou do something for 20
years, of course, it takessome time to a new approach.
(29:27):
But my experience, at leastin our company we had always
good and positive cases wherepeople adapted quite quickly.
But it didn't happenovernight definitely.
And I think you cannotexpect it from everyone.
and you also want theexpertise these people
get in the 15 to 20 years.
And this is also nothing AI ordata analytics will replace.
(29:50):
So that's why I think you haveto give some people some time
but it's very individually,it's not everybody the same
but yeah, if you have someonewho comes just freshly in to
the department, it doesn'tmatter if it's If it's an
experienced person or not thenI think it's just easier to
adapt to it because you doit from the very beginning.
(30:12):
So you don't have to, let'ssay, break through this
stigma you, had the last year.
I think,
Yusuf (30:18):
That's encouraging, right?
So about a patience andsupport and helping people
to, to cope with the changesreally what we're going to
be seeing over the next fewyears because I don't have
stats and anecdotally, you'dthink that, maybe half of
our auditors are experiencedand half new coming in.
So there's a fairly large cohortof experienced auditors that.
(30:39):
need some patience andneed some encouragement to
get to the next level.
but the future is bright giventhe level of coverage that we.
can start to enable andjust provide more value
particularly in those areasthat we couldn't cover because
we just didn't have enoughbudget or enough resources.
So that's good.
Michael, what's the futurefor you and, your team?
What are you excitedabout particularly over
the next couple of years.
Michael (31:00):
We really enjoy being back also with
travel, with the directcontact with the companies.
I mean, though COVID is alreadyone and a half years or so
ago we still have countrieswhere it was difficult
to travel to when we talkabout China, for instance.
So we did not have the chancein the last four years to have,
(31:21):
for instance, our annual auditconference to meet everybody.
And even though a lot ofpeople are already here for
two, three, four years it'sreally yeah, sad to see that
most of the people did notmeet each other personally.
So what we are lookingforward now as well is the
personal contact, the, thephysical meeting, we will
(31:41):
have our audit conference.
Now in a few weeks, the firsttime since we set up the
internal audit department atTKElevator four years ago.
So we are looking forward tomore, let's say interaction
between the teams to more jointaudits between the regions.
And we see it also inthe employee survey
our company is doing.
(32:02):
on an annual basis.
So in our department,people really miss let's
say, the interaction.
So they want theywant joint audits.
They also want tosee other cultures.
And they are also, let'ssay, interested because every
time we have our global fixremotely people talk about their
audits, about their cultures.
(32:23):
And it's, I think, veryinteresting for the people
to go there and alsoexperience it, especially.
For, for the younger peoplewho did not travel so much
to, to different countries.
So we are definitelylooking forward to more
personal contact, notonly within the team, but
also with the auditees.
And I think we are also prettymuch looking forward to the
(32:48):
fact that we have all the timeand let's say new audit topics.
And I would say that our companyis quite on a digital journey,
so we have digitalizationalso in elevator business
also use of AI over there.
But this, yeah, this alwayschanging environment also
(33:10):
in our company makes itexciting because we will
have always new audit topics.
Because our company is isdeveloping very quickly,
it's very dynamic verycompetitive market, the
elevator market, of course.
So, we recently also launcheda new product which also
required to set up newsystems and processes.
(33:30):
So yeah, I think the peoplein my department, they, they
know that they will never doalways the same, there will
be always something new.
This is what we are looking for.
The dynamics of this job, Ithink this will never change.
Doesn't matter if there will beAI or not, I think the people
who work in internal auditwill always have a dynamic job.
Yusuf (33:53):
That sounds really exciting.
It sounds like a niceplace to be at the moment.
So well done on creating thatlevel of excitement within
an internal audit team foryour existing, team members
and also those lookingto come in and join you.
And I know you, you'realways looking for good
people to join you, Michael.
Michael (34:10):
Yeah, always search for people, if
your everyday experienceshould be very dynamic.
And you don't want to knowwhen you go to bed, what
will wait for you the nextday and definitely this
is the right place to be.
Yusuf (34:25):
Excellent.
Michael, thank you somuch for joining us today.
Really interesting conversationthat I'm sure a lot of people
will take good info away from.
What's the, for those thatwant to find out more about
you and your team, think aboutjoining, et cetera what's
the best way to contact you?
Michael (34:41):
on LinkedIn I mean.
The name will be written.
So it's not so easy to find,but the good thing when it comes
to my name is when you put itinto LinkedIn, there are not so
many people which will appear,so you'll find me quite quickly.
Yusuf (34:55):
Okay, so that, that uniqueness is definitely a plus.
we'll put a link to yourLinkedIn profile in the
show notes, Michael.
Thank you so muchfor joining us again.
Michael (35:03):
Thank you Yusuf, have a nice weekend.
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