CVS Health: Shaping the Auditor of the Future has been saved
Perspectives
CVS Health: Shaping the Auditor of the Future
As published in Risk and Compliance Journal for The Wall Street Journal
The internal auditor of the future is more tech savvy and less bureaucratic, according to CVS Health’s David Chavez, who is in the midst of transforming the function he leads
Redefining the role of internal auditors is central to the work David Chavez started a year ago when, as the new chief audit executive at CVS Health, he embarked on building the audit function of the future. Expressing his vision of using innovation and process excellence to transition internal audit into a more strategic function, Chavez notes that he left a divisional CFO role to lead the transformation at CVS Health. In addition to the finance chief post, his experience spans multiple roles and industries—from oil and gas to entertainment, and from corporate controller and chief risk officer to chief audit officer.
“My focus is on leveraging digitization and automation to better anticipate risk, which can help transform audit and benefit the whole organization,” says Chavez. He explains that for auditors, an important priority is to enhance their skill set by becoming more technology-savvy and less bureaucratic in their approach, which leads them to better understand and assess business processes.
“The pushing-paper mentality needs to go away,” Chavez says of the profession. “A broad understanding of the overall business environment and of technologies and systems is key to identifying potential pitfalls in an organization and to becoming a more impactful auditor.”
Auditors are in a strategic position within organizations because they are required to consider different perspectives—including risk, compliance, finance, operations, and IT—to perform their duties. With the addition of adequate tech tools at their disposal, auditors could be ideally situated to help management prevent and address issues across the business in a proactive manner, according to Chavez.
“One of the main goals for auditors is to embrace technology in their day-to-day activities and to think outside the box,” he says. “Auditors can identify better and more efficient workstreams, and technology can be used to challenge less-effective processes and the reasoning behind such processes.”
Chavez spoke with Matt Hourin, a principal at Deloitte Risk & Financial Advisory, Deloitte & Touche LLP, about the value of cross-training to develop audit talent, the new skills auditors are learning, and why he once hired a geophysicist.
Hourin: How do you develop audit talent within your organization?
Chavez: In my view, internal audit team members should spend time in other departments to get a better understanding of the business and develop relationships. Our IT and finance teams offer development programs that benefit auditors. It’s important for auditors, especially those at the higher levels, to go through these rotational programs before moving up in the organization. The value gained by understanding the overall challenges of the business is critical to building the audit function of the future.
The process works in reverse as well. Talent from other units of the business rotate into Internal Audit and participate in two- to three-year programs. Audit leverages the knowledge and perspectives these colleagues from the business and other functional areas bring to us. The company provides these rotations to existing employees and to new hires, which not only helps build the brand of the audit function but also strengthens the overall capabilities of the organization.
Would you expand on how the programs work in practice?
The aim is to break down silos and build a rotational model that allows top talent—both managers and staff—to gain visibility across the whole organization. Another goal is for internal audit to become a powerful training ground for talent and a destination for employees wanting to move up in the organization. An internal audit assignment can help employees improve their ability to analyze a business process and identify activities that bring value to the business. Capabilities and expertise developed within the function can be extrapolated and then permeates the rest of the company via the rotation program. My personal performance scorecard includes activities related to training talent for the audit function and sending them back into marketing, finance, operations, or other units with a comprehensive perspective of the organization.
What are some of the specific skills auditors and other employees are learning through these programs?
As part of the company’s first-year transformational objectives, all audit team members will be trained in data analytics and robotic process automation (RPA). They aren’t all expected to build RPA programs, but they can benefit from learning to use technology in their daily work. Technology is a large component of training in addition to process excellence and innovation, which is a concept that expands from lean manufacturing and Six-Sigma that focuses on continuous improvement to drive value. We are in the process of developing employees’ skill sets to better analyze and evaluate processes and identify non-value-added activities while leveraging technology to the maximum capacity.
What does creating the audit function of the future entail from a talent perspective?
I don’t necessarily think that everyone on my team needs to be a data scientist, but everyone needs to be technologically savvy to better understand and assess business processes. It’s impossible to separate technology from these processes; and having tech capabilities on an audit team makes our work more impactful, efficient, and effective. Although manual processes are disappearing and the pushing-paper mentality with it, the system still needs humans to identify correlations, data points, and risks. The transformation is not about replacing auditors with robots but about changing the skill set so they have more of an impact with the tools at hand.
Diversity is one of internal audit’s—and the company’s—priorities. How do you approach diversity within audit?
CVS Health serves millions of people every day. For our company to thrive, it’s important to have a workforce that reflects not only our customers, but also the communities they live in. One of the first steps in promoting diversity is to have a diverse pool of candidates when making recruiting decisions, and then to not hesitate in delaying the hiring process if the pool of candidates is not diverse enough. It goes beyond ethnic, gender, and other personal diversity attributes to tapping into a variety of operational backgrounds. During my career, I have pushed organizations to hire people with different backgrounds, knowledge, and experience. The perception is that auditors typically have a finance, accounting, or IT background, but companies can be creative by recruiting more diverse talent to the function.
At a prior job, I once hired a geophysicist, which surprised many, but it brought specific knowledge and an understanding of the business from an operational perspective. Operational and industry knowledge is key to the audit function, not only in health care but in other sectors as well. Effective auditors with a deep operational background can be given the tools to improve their evaluation of processes, controls, and risk, but it takes more time to absorb sector-specific nuances and industry knowledge.
―by Marine Cole, senior writer, Deloitte Services LP, Deloitte Insights in the Wall Street Journal
This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.
Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.
Copyright © 2022 Deloitte Development LLC. All rights reserved.
Get in touch
Recommendations
The Emergence of Chief Controls Officers
As published in the Risk and Compliance Journal in The Wall Street Journal
Can Reporting Automation Challenge the Status Quo?
As published in Risk & Compliance Journal for The Wall Street Journal
