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Auditing beyond numbers -Assessing the Human resource management strengths -By CA Lekha Krishnakumar [email protected]

Auditing beyond numbers

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-Assessing the Human resource management strengths. Auditing beyond numbers. New Idea. “If you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.” - George Bernard Shaw. Before we start let us try to answer a few questions. - PowerPoint PPT Presentation

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Page 1: Auditing beyond  numbers

Auditing beyond numbers

-Assessing the Human resource management strengths

-By CA Lekha Krishnakumar

l e k h a @ l e k r i s h . c o m

Page 2: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

New Idea

“If you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.”

-George Bernard Shaw

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Page 3: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Before we start let us try to answer a few questions What is the role we envisage for a

traditional auditor? If you are in the industry as a Finance

Controller, how would you perform qualitative analysis?

What could be a finance professionals role towards Human Resources function in an organization?

Do you think it is important to appraise qualitative aspect of resources including human resources?

The understanding that we carry today are paradigms accumulated over the years due to experiences.

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Page 4: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

What do you see in this picture?

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Page 5: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

What do you see in this picture?

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Page 6: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Paradigms

It has been observed that :

All of us have paradigms that resist us to appreciate and acknowledge a different perspective.

Paradigms might take a rigid form with progression of age.

Some paradigms are due to the socio-economic factors and others are self created.

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Page 7: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Change is inevitable

Traditional Number cruncher to a Consultant

Validations to Interpretations7

Page 8: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

What is the purpose we wish to accomplish from this presentation?To appraise internal auditors and management teams, regarding problems generally overlooked by organizations due to departmentalization and inflexible job descriptions.

To provide insights where a third party independent auditor could add value in building a successful enterprise.

To bring out the dynamics of management amongst the five critical aspects of human resource capital viz., Knowledge, Skill, Competence, Incentives and Belongingness.

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Page 9: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Quantity or Quality?

16KB Floppy

1GB Pen-drive

Pentium I PC

Pentium Dual Core

PC

Mechanical

Executers

Executive Thinkers

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FewMany

Page 10: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Attrition – Lost man months

Job searching

Notice Period

Finding Replacement

Training new recruit

Two

One

One

Three

Seven

Activities when an employee quits

Man-Months Lost

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Page 11: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Satisfy all Stakeholders

Auditor

Shareholders

Management

CreditorsCustom

ers

Employees

Regulatory Authorities

Public at Large

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Page 12: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Team Building

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Page 13: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Qualities of good team..

Effective solutions are provided by talented, skillful and proactive people who can strike the right balance among key business values viz.,

InnovationPromptnessQualityEffectivenessGoodwill RelationshipSatisfaction

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Page 14: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

How do we build a good team?

A Good team

Hiring Right People

Nurturing Leadership Qualities

Structuring The

Organization Properly

Competence Mapping And

Capacity Building

Adopting Good

Evaluation And Incentive

Systems

Creating A Sense Of

Belongingness

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Page 15: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

How do we build a good team?

A Good team

Hiring Right

People

Nurturing

Leadership

Qualities

Structuring The

Organization

Properly

Competence

Mapping And

Capacity Building

Adopting Good

Evaluation And Incentiv

e Systems

Creating A Sense

Of Belongin

gness

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Hiring Right

People

Page 16: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Hiring good people

Job DescriptionSkill

Requirement analysis

Costing

Timeline Profile match

Candidate analysis

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Page 17: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Candidate Analysis

Knowledge

Skill

Competence

Cost Attitude

Adaptability

Values

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Page 18: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Talking about attitude..

Let me share a small presentation received from my friend.

The following 8 slides are from the other presentation on attitude.

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Page 19: Auditing beyond  numbers

A SMALL TRUTH TO MAKE LIFE

100%

Page 20: Auditing beyond  numbers
Page 21: Auditing beyond  numbers

Hard Work

H+A+R+D+W+O+R+K

8+1+18+4+23+15+18+11 = 98%

Knowledge

K+N+O+W+L+E+D+G+E

11+14+15+23+12+5+4+7+5 = 96%

Page 22: Auditing beyond  numbers

Love

L+O+V+E

12+15+22+5 = 54%

Luck

L+U+C+K

12+21+3+11 = 47%

( don't most of us think this is the most important ??? )

Page 23: Auditing beyond  numbers

Then what makes 100% ?

Is it Money ? ... NO ! ! !

M+O+N+E+Y

13+15+14+5+25 = 72%

Leadership ? ... NO ! ! !

L+E+A+D+E+R+S+H+I+P

12+5+1+4+5+18+19+9+16 = 89%

Page 24: Auditing beyond  numbers

Every problem has a solution, only if we perhaps change our

attitude.

To go to the top,

to that 100%,

what we really need to go further... a bit more...

Page 25: Auditing beyond  numbers

ATTITUDE

A+T+T+I+T+U+D+E 1+20+20+9+20+21+4+5 =

100%

It is OUR ATTITUDE towards Life and Work that makes OUR Life

100% ! ! !

Page 26: Auditing beyond  numbers

Change Your Attitude …

And You Change Your Life ! ! !

Page 27: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

How do we build a good team?

A Good team

Hiring Right

People

Nurturing

Leadership

Qualities

Structuring The

Organization

Properly

Competence

Mapping And

Capacity Building

Adopting Good

Evaluation And Incentiv

e Systems

Creating A Sense

Of Belongin

gness

27

Nurturing

Leadership

Qualities

Page 28: Auditing beyond  numbers

Nurturing Leadership..

Lead by example..

Don’t just manage..

28Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Page 29: Auditing beyond  numbers

Manager or Leader?

MANAGER

What & Who?What happened &

Who did it?Plays Blame Game.Penalizes the doer.

LEADER

Why & How?Why something

happened and How it can be corrected?

Concentrates on the fundamental cause.

Offers solutions to problems.

29Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Page 30: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

How do we build a good team?

A Good team

Hiring Right

People

Nurturing

Leadership

Qualities

Structuring The

Organization

Properly

Competence

Mapping And

Capacity Building

Adopting Good

Evaluation And Incentiv

e Systems

Creating A Sense

Of Belongin

gness

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Structuring The

Organization

Properly

Page 31: Auditing beyond  numbers

Preparing an Organizational Chart

Board of Directors

CEO/MD

General manager-Support services

General manager- Marketing (South)

General manager- Marketing (West)

Chief manager Finance

Chief manager -HR

Chief manager-Logistics

Manager- Technical team

Manager- Business Development team

Manager- Commercial

Manager- Commercial

Manager- Technical team

Manager- Business Development team

31Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Page 32: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Clearly define roles and responsibilities of each employee

Chief Manager Finance

Accounts Planning/Budgetary Control

Treasury/ Statutory Compliance

Contract management

General Ledger

Accounts Receivable

Accounts Payable

Receipt and payment through cash/bank

Bank Reconciliation

Finalization of financial statements

Managing internal & external audit

Preparation of Annual Budgets

Comparative analysis of budgets vs actual

Product pricing methodology

Preparation of monthly MIS

Cash and funds flow management

Compliance with direct and indirect tax and assessments

Relationship with banks

Debt Collection

Dealer Contract management

Supplier Contract management

Invoicing

Status of outstanding commitments

Systematic maintenance of documents

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Page 33: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Establishing Clear performance parameters

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Page 34: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Communicating objective decisions and critical feedback

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Page 35: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Establishing effective communication channels and whistle blower policy

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Page 36: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

How do we build a good team?

A Good team

Hiring Right

People

Nurturing

Leadership

Qualities

Structuring The

Organization

Properly

Competence

Mapping And

Capacity Building

Adopting Good

Evaluation And Incentiv

e Systems

Creating A Sense

Of Belongin

gness

36

Competence

Mapping And

Capacity Building

Page 37: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Right Person for the right job..

Creative brain used for mess cleaning??!!??

Field worker

used for Desk

Job??!!??

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Page 38: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Capacity Building

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Page 39: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

How do we build a good team?

A Good team

Hiring Right

People

Nurturing

Leadership

Qualities

Structuring The

Organization

Properly

Competence

Mapping And

Capacity Building

Adopting Good

Evaluation And Incentiv

e Systems

Creating A Sense

Of Belongin

gness

39

Adopting Good

Evaluation And

Incentive Systems

Page 40: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Periodic performance evaluation

Staff Dialogues

Peer reviews

Management

feedback

Goal setting

and establishi

ng Key Result Areas

Measurement of actual

performance with respect to KRAs

Objective rating

systems

Good HR policies

for incremen

ts, promotions and merit

rewards

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Page 41: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

How do we build a good team?

A Good team

Hiring Right

People

Nurturing

Leadership

Qualities

Structuring The

Organization

Properly

Competence

Mapping And

Capacity Building

Adopting Good

Evaluation And Incentiv

e Systems

Creating A Sense

Of Belongin

gness

41

Creating A Sense Of

Belongingness

Page 42: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Belongingness wields Power

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Page 43: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Good Organizational Culture

Show flexibility to amend mistakes as opposed to

defending them.

Evolve a policy of giving credit when

voluntary disclosures of

lessons learnt from mistakes are

communicated.

Develop a feeling of pride within the individual to be a part of the team.

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Page 44: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

To summarize..excerpts from Management E-Learning program

44

Please watch the e-learning program..

Page 45: Auditing beyond  numbers

How can a Finance Professional help build Human Resources team?

Understand Human Resources aspect of Management.

Evaluate constantly the health of an Organization.

45Auditing Beyond Numbers -By CA Lekha Krishnakumar

www.lekrish.com

Page 46: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

What can a finance professional do?

Analyze the symptoms. We are originators and presenters of financial information. And, symptoms are revealed from figures.

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Page 47: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

What can a finance professional do?

Diagnose the right cause of problems – this may involve a paradigm shift.

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Page 48: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

What can a finance professional do?

Give corrective recommendations at the right time. Bring business on track.

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Page 49: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Let us keep our minds open for various possibilities..

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Page 50: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Let us help in building Healthy Organizations!

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Page 51: Auditing beyond  numbers

Auditing Beyond Numbers -By CA Lekha Krishnakumar www.lekrish.com

Thank You!

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