Conducting a Successful Internal Audit of Contract Risk

An Assignment by Erika Blomerus

Conducting Successful Internal Audits of Contract Risk

Professional Diploma in Digital Learning Design

Thanks

Our Team

Metric

Strategy

Competitors

Target audiences

Roadmap

- The WHO

- Background

PART 1: MACRO DESIGN

Index

PART 1: Macro Design

I have recently founded a start-up business, The Transparency Hub, that will offer training and consulting services to help organisations achieve greater transparency in their finances and operations. As part of this, we will offer an online course aimed at internal auditors seeking to develop their capabilities in respect of contract risk.

What is the proposed solution?

Learn more

As an experienced internal audit manager and former director of a specialist contract compliance audit firm, I will act as the SME. However, in order to sense check and further develop my ideas I have also used Microsoft Copilot as an additional SME.

The role of the SME

Backgound

What is the problem we're seeking to solve?

Almost all organisations are exposed to some form of contract risk, whether it be financial, operational, legal or regulatory. However, internal auditors can face challenges in planning and executing successful audits of contract risk, often as a result of the following:

• Lack of specialist knowledge, particularly with regards to complex and evolving contractual requirements

• Lack of resources (staff and time) required to develop further skills in this area
• Poor relationships with, or limited exposure to, other functions that manage contract risk (e.g. legal, procurement, etc.)

Analysis of Personas

Learner personas were created based on my prior experience as an internal audit manager. I reflected on colleagues I've worked with in the past when developing the personas, and sought to understand their goals, motivations and frustrations. Employing this approach will enable me to develop and deliver empathy-driven training. Image source: Canva Pro

The WHO - Learner Personas

The Business Need

Internal auditors lack the speciliast knowledge and skills to perform effective and efficient risk-based audits of contract risk. As a result, their organisations may not take appropriate measures to manage these risks, resulting in negative outcomes (e.g. financial loss).

The Business Problem

The Learning Gap

At the entry level, participants will exhibit moderate to significant knowledge (Level 2 or 3 of Bloom's tax onomy) in general internal audit. However, they will exibit little or no knowledge (Level 1 of Bloom's taxonomy) of risk-based internal audits of contract risk. This is in contrast with the target level, which is for participants to reach expertise level (Level 3 of Bloom's taxonomy) in this specialist area.

In order to develop learner outcomes, we first need to identify the business problem, the business need and the learning gap (i.e. the gap between learners' current knowledge / skills and those required to address the business need).

To develop a practical online course that provides experienced internal auditors with the knowledge and skills they currently lack.

The WHY - Business and Learning Needs

Risk-Based Internal Audit

Internal Audit Training

Explaining the Gap

Achievement of the learning outcomes will be demonstrated by learners completing a summative assessment at the end of the course.

Upon successful completion of this course, learners will be able to:

The WHY - Learning Outcomes

Action Mapping

The course will be divided into seven modules. The first module will be an introduction to the audit of contract risk, while each of the subsequent modules will provide learrninng content for specific aspects of performing such an audit.

Approach

The WHAT - Modular Framework

M3

M2

L1: Managing Contract Risk L2: Common Management Practices L3: Assessing Managament Practices

Management of Contract Risk

L1: Governing Contract Risk L2: Common Governance Structures L3: Assessing Governance Structures

L1: Audit Planning Steps L2: Developing the Audit Plan L3: Documenting the Audit

Governance of Contract Risk

Audit Planning and Documentation

M5

L1: Controlling Contract Risk L2: Common Internal Controls L3: Assessing Internal Controls

Control Activities for Contract Risk

L1: Common Findings and Recommendations L2: Reporting Audit Findings L3: Agreeing Audit Actions

Audit Reporting and Communication

M4

L1: Common Contract Risks L2: Assessing Contract Risk L3: Prioritising Contract Risks for Audit

Assessing Contract Risks

M6

L1: Introduction L2: Why Audit Contract Risk? L3: Key Concepts and Terminology

Contract Audit Fundamentals

M7

M1

Action Mapping

The WHAT - Content Map

• Although the two learner personas are both UK-based. there are internal auditors throughout the world who may benefit from this course.
• The digital asynchronous self-paced mode of delivery will enable auditors to participate in the course regardless of their location or timezone.

Global

• The asynchronous mode of dellivery will enable internal auditors to fit their studying around their existing work commitments.
• This is important because internal auditors are often juggling multiple responsibilities at any point in time.

Flexible

• The self-paced approach of the course will suit busy internal auditors who have limited time per week to study. Alternatively, it would suit auditors who need to acquire the knowledge / skills in the course quickly for a specific audit.
• A self-paced course will also give foreign-language participants additional time to work through the content.

Self-Paced

The HOW - Mode of Delivery

The course employs a fully digital approach in which primary content is delivered in an asynchronous, self-paced manner. This is supplemented with asynchronous chat that provides opportunities for social learning with other learners and enables learners to request / provide feedback.

2. Learners have the option to complete an in-depth case study assignment that allows them to put their knowledge from each module into practice.

3. Discussion forum enables social learning through which participants can discuss case study assignments and get feedback.

1. Module toolkit containing additional optional resources for participants to explore at their leisure.

Section

Building Block

4. Outro video summarises content covered in each lesson and introduces the upcoming lesson.

3. A short formative assessment enables the learner to check their understanding of the content covered in each lesson

2. Core content for each lesson is delivered through multimedia formats, including on-screen text, video, audio and infographics

1. Each lesson starts with an exercise to test existing knowledge

Section

Building Block

Optional learning material

Core, mandatory learning material

Each lesson will comprises seven building blocks, of which four relate to core material and three relate to additional, optional resources and activities.

The HOW - Building Blocks

M3

M2

Management of Contract Risk

Governance of Contract Risk

Audit Planning and Documentation

Control Activities for Contract Risk

M5

Audit Reporting and Communication

Assessing Contract Risks

M4

Contract Audit Fundamentals

M6

M7

M1

A combination of two models will be employed in the course:1. A linear pathway will guide participants through each lesson and will cover core learning material (quizzes, content and assessment) 2. A core and spoke model will provide participants with the opportunity to explore the material in more depth, via optional spoke resources for each module (toolkit, case study assignment and social chat forum) Click the buttons below to learn more about how the learning flows in each module:

The HOW - Learning Flow

Timing / Duration

Developing 'the WHY' involved four stages:

1. Identifying the business goal that the course will address. This was done based on my experience working in internal audit functions.
2. Identifying the business need. In order to do this, I reflected on my time working in internal audit functions and considered what was required to be able to achieve the business goal (in this case a digital learning course)
3. Identifying the learning gap. To do this, I considered the cognitive levels of Bloom's Taxonomy at which participants would start the course (LOTS) and the level at which they needed to operate in order to meet the business goal (HOTS). This made me realise that there were several steps that would be required for participants to progress from the 'remember' / 'understand' level to the 'create' / 'evaluate' level, and that the content would need to be scaffolded accordingly (i.e. taking a contstuctivist approach).
4. Defining the learning outcomes. This was done by considering the actions that participants needed to perform to achieve the business goal. In line with Bloom's taxonomy, I used 'action words' when drafting the learning outcomes. I also took a SMART approach to ensure that progress against the outcomes could be measured effectively. I drafted one learning outcome per core 'action' that participants needed to achieve, which largely aligned with the stages of the audit.

The WHY

Jump to Slide 5

Action Mapping

Reflection

The WHO

When developing the learner personas, I reflected on the internal auditors I've met during my career, both when I was working as a generalist internal auditor and when I worked as a specialist contract compliance auditor. The personas were invaluable in helping me to identify 'the WHY' of the course and they enabled me to take an empathy-based approach to developing the course further in order to meet the personas' specific needs. The key considerations that became apparent during my analysis of the learner personas are set out in slide 5 'The WHO - Learner Personas'.

When developing 'the HOW', I considered the following:

1. The mode of delivery that would be most effective for participants. I reflected on the learner personas (their goals, challenges, preferences) and concluded that a fully-digital, self-paced, asynchronous mode would be most suitable.
2. The content formats that would be most appropriate to deliver the learning material. Again, the learner personas were helpful here, particularly the learning preferences, which indicated that a multi-media format (including audio, text, video and infographics) would be most appropriate.
3. The activities and assessments that would best support the learrning process. I concluded that a warm-up quiz at the start of every lesson would be a good 'hook' for learning, and that participants would benefit from formative assessment and feedback in every lesson, to ensure that they understood the content that was covered.
4. The learning flow that would best meet the needs of the learning personas. I concluded that a mixture of the linear model (within each lesson) and the core and spoke model (within each module) would be most appropriate, as it would ensure that learners covered the core learning material but also had the option to delve deeper into the optional material if they wanted to.
5. The course timeline / duration. Although this is a self-paced course, I concluded that it would be helpful for participants to have an indication of how long the course would take to complete. Therefore, I developed a suggested timeline.

The HOW

Reflection (cont'd)

The WHAT

I applied the following approaches / methods to develop 'the WHAT':

1. I employed a top-down approach to create the Modular Framework. This ensured that all modules were alligned the learning outcomes, as each module was associated with a specific learning outcome. Every learning outcome had its own learning outcome, with the exception of LO1 which had two modules due to the volume of content that needed to be covered.
2. I used the output of my action mapping excercise (see previous slide) to identfy the specific content that would be required within each module of the audit to bridge the learning gap.
3. As I am the SME for this course, I referred to my own knowledge of the content that was required to bridge the learning gap. In addition, I used MS Copilot (AI) as an additional SME.

SWOT Analysis

• If you’re going to present this SWOT analysis live, we recommend training your voice and rehearsing.
• The best improvisation happens when you’re prepared!

• Although you shouldn’t overuse bullet points, icons and diagrams like this can be your best allies when telling stories.

• Take time to consider and define weaknesses and make an outline.
• Summarize the content to make it easier for your audience to remember it.

• Use this space to talk about strengths.
• Show enthusiasm and maintain eye contact with your audience: 'The eyes, chico. They never lie.’

- Genially

Write an awesome title

‘Your content is good, but it’ll engage much more if it’s interactive.’

Contextualize your topic with a subtitle

When giving a presentation, you need to go after two main objectives: to convey information and avoid yawns. To do this, it can be good practice to make an outline and use words that will be imprinted in the memories of your audience. If you want to add additional information or develop the content in detail, you can do this with your verbal presentation. We recommend training your voice and rehearsing; the best improvisation happens when you’re prepared!

Mission & Objectives

Vision

Visual content is a transversal, universal language, like music. We can understand images from millions of years ago, even from other cultures. Our brains are hardwired to consume visual content. Some facts: we receive 90% of the information we process through sight and we process visual content up to 60,000 times faster than text. That’s why visual communication is more effective.

Write an awesome title

Mission

We are in the age of the explosion of digital information. As a result, the way we obtain information has changed from traditional reading to a cognitive strategy based on navigation. We generally grasp visual content better. Visual content is associated with cognitive and psychological mechanisms. We receive things through our eyes; the first image is what counts. We associate visual content with emotions.

+ info

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• Show enthusiasm, smile, and maintain eye contact with your audience. 'The eyes, chico. They never lie.’
• This will help you connect with your audience. Knock their socks off!

Objective 3

• You can develop the content in more detail in your verbal presentation.
• We recommend training your voice and rehearsing; the best improvisation happens when you’re prepared!

Objective 2

• You can make an outline to summarize the content and use words that will be imprinted in the memories of your audience.

• Numbered ideas are remembered much better than bulleted lists.

Objective 1

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Objectives

ROADMAP

Turn numbers into a story with a graph.

Team 03

Telling stories with an order and a hierarchy is fundamental.

Team 02

Icons are always a good ally.

Team 01

When you tell us a story, it excites us, and can even move us, which means that we remember stories up to 20 times more than any other content we consume.

Write an awesome title

WOW effect

Design

Magic

Creativity

Motion

Interactivity

Use tables and infographics.

Target Audiences

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Contextualize your topic with a subtitle

Interactive visual communication improves the results of communication on any topic and in any context. Before starting to create, it’s a good idea to spend a few minutes thinking about the message behind the map.

Maps are a great ally, use them!

• Innovation motivates us
• We don’t like to be boring or repetitive
• We create things the brain likes to consume
• We dismiss anything that’s boring

Cretive beings

• We need to interact
• We seek happiness
• Because as well as being social, we are positive
• We learn in a collaborative way

• We are here for each other

Social beings

• We tell thousands of stories
• We communicate
• And we express our needs

• We conquer, we convince
• It’s in our DNA

Narrative beings

• We understand images
• Illustrations, gifs, videos...
• are resources that support the content
• Especially with interactivity and animation
• A must in every creation

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Visual beings

We are...

COMPETITORS

Company 2

We turn visual communication into an experience when we add interactivity, animation, and storytelling.

Company 4

We tell thousands of stories. ⅔ of our conversations are stories. We all have something to tell.

Company 1

We need fun to be creative, creativity to innovate, innovation to succeed... Fun is success.

Company 3

Write an awesome title

Sufrimos una sobrecarga de información. La transformamos en visual: más atractiva y accesible.

+ info

Use images in your presentation

Contextualize your topic with a subtitle

And use this space to caption it. You can upload an image from your computer or use the resources available in Genially, on the left side of the Editor. Knock their socks off! Convince 67% of the audience. This is because visual language facilitates the rapid acquisition of knowledge in an intuitive way. Could it be said that images are the key to success? Pretty much.

Strategy

And for you to wow your audience.

Impress

And animationsto make it fun.

Structure

The important thing is to be suitable for the topic.

Design

04

03

02

01

You can add interactivityto your timeline.

Plan

Awesome timeline, step by step

Activate and surpriseyour audience.

Make sure your audience remembers the message

It’s ordered, hierarchical, and structured.

Wow Effect

Animation

Design

Generate experienceswith your content.

Measure results and experiment.

It’s got the Wow effect.Very Wow.

Creativity

Magic

Interaction

A great presentation ...

Metric

90% is visual

90% of the information we assimilate is received through sight. Tell stories with graphs!

Use graphs in your presentation ...

Use this space to briefly describe your graph and its evolution.

23%

And the data will be imprinted in their minds.

85K

That way you’ll hold your audience’s attention.

Use this space to briefly describe your graph and its evolution.

45%

... Even if you’ll explain it verbally

+190

You can enter numberslike this

Use graphs in your presentation ...

Our Team

And use their strengths to make a great team.

Name Surname

Involve them in the different objectives.

Name Surname

Help them to be better so that your team helps you.

Name Surname

To manage a team, you have to listen.

Name Surname

Introduce the team

Introduce the team

Help them to be better so that your team helps you.

Name Surname

Involve them in the different objectives.

Name Surname

To manage a team, you have to listen.

Name Surname

To manage a team, you have to listen.

Name Surname

Involve them in the different objectives.

Name Surname

Help them to be better so that your team helps you.

Name Surname

Enter an address. The street, the number, the postal code... You know!

Name@mail.com

Thanks!

• Professional background: both learners are professional auditors with significant experience in the industry, though with different specialisations and approaches.
• Learning goals: both have specific learning goals related to enhancing their auditing skills and building expertise in areas that will advance their careers.
• Barriers to learning: both have limited access to specliast resources and training within their organisations.
• Preferred learning style: both prefer practical training with real-world examples and case studies. They value the flexibility that asynchronous learning provides and learn best when videos are combined with written text.
• Technology: both are confident with technology and are well-placed to
• Constructivist approach: both would benefit from scaffolded learning that builds on their existing knowledge and further develops their problem-solving skills.

Analysis

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• Generate experiences with your content.
• It’s got the Wow effect. Very Wow.
• Make sure your audience remembers the message.

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This section of the assignment describes the initial steps in designing my online course and represents the Analysis and Design stages of the ADDIE process . Together, these stages comprise the macro design of the course and required me to identify the following:

Analysis and Design

• The WHO of learning
• The WHY of learning
• The WHAT of learning
• The HOW of learning

Learning Outcomes

Using an Action Mapping Approach

I used an action mapping approach to identify the learning outcomes for each module:

1. I identified actions and sub-actions that internal auditors would need to be able to perform in order to achieve the business goal of performing successful audits of contract risk.
2. I converted these actions into learning outcomes by ensuring that they included appropriate and specific action verbs
3. In some cases, I decided that multiple actions could be combined into a single learning outcome.

As this is a self-paced course, there will be no definitive timeline / duration. However, we would suggest that participants:

• Complete one module per week
• Allow two hours per week to cover the basic content
• Allow five hours per week to cover the additional resources and assignments.
• Thus, the course would take seven weeks to complete, and require 14 -35 hours in total.

Timing / Duration

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• Generate experiences with your content.
• It’s got the Wow effect. Very Wow.
• Make sure your audience remembers the message.
• Activate and surprise your audience.

I used the action-mapping method (Cathy Moore, 2014) to ensure that learning objectives and content are practical and clearly linked to the business goal. The approach was as follows:

1. Identify the business goal
2. Identify practical actions that internal auditors must complete to achieve the business goal. As these were all Level 3 actions in Bloom's taxonomy, I also identified sub-actions relating to the lower levels of Bloom's taxonomy. This ensured that learning would be scaffolded.
3. Identify blockers that currently prevent internal auditors from completing these actions / sub-actions. This was done based on my prior working experience and the learner personas.
4. Consider the content that would be required to overcome these blockers, which shaped my approach to 'the WHAT'

Action Mapping

Why does the gap exist?

The knowledge gap exists for three main reasons: 1. Some internal audit functions still employ traditional audit methodologies, rather than taking a risk-based approach. 2. Contracts are often the responsibility of procurement specialists who negotiate prices and terms and lawyers who draft the legal documents. As a result, specialist knowledge of contract risk sits outside the audit function. 3. Historically, internal audit has tended to focus on financial risks, so organisations may have limited experience of conducting non-financial audits of contract risk.

What do internal auditors do?

Internal auditors' primary role is to provide independent and objective evaluations of a company's financial and operational activities. Their key responsibilities typically include:

• Evaluating internal controls: assessing the adequacy of internal control systems to mitigate risks and ensure operational efficiency.
• Conducting risk assessments: performing risk assessments to identify potential threats to the organization, including financial, operational, and compliance risks.
• Compliance monitoring: ensuring that the organization adheres to applicable laws, regulations, and internal policies. This is vital for maintaining corporate governance and avoiding legal penalties.
• Reporting findings: After conducting audits, internal auditors prepare detailed reports highlighting their findings, which include recommendations for improvements. These reports are presented to senior management and often include actionable insights to enhance organizational performance.
• Consultative role: Beyond assurance functions, internal auditors also serve a consultative role by advising management on best practices and strategies for improving processes and controls. This dual function helps organizations achieve their strategic objectives more effectivel

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• Generate experiences with your content.
• It’s got the Wow effect. Very Wow.
• Make sure your audience remembers the message.
• Activate and surprise your audience.

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• Generate experiences with your content.
• It’s got the Wow effect. Very Wow.
• Make sure your audience remembers the message.
• Activate and surprise your audience.

During their training, internal auditors are taught how to perform audits, including how to assess controls, identify weaknesses and make recommendations. However, their training is often quite general or focused only on financial risk. In some cases, depending on the methodology employed by their organisation, internal auditors may be taught to use a traditional compliance-based audit approach to audit, rather than a risk-based audit approach. As a result, even experienced internal auditors may never have been required to perform a risk-based audit of contract risk during their training.

Internal Auditor Training

Internal auditors tend to be qualified accountants who have completed several years of audit training, either at big audit firms such as EY and Deloitte, or at large organisations such as Unilever and HSBC.

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Got an idea?

Let the communication flow!

With Genially templates, you can include visual resources to wow your audience. You can also highlight a particular sentence or piece of information so that it sticks in your audience’s minds, or even embed external content to surprise them: Whatever you like! Do you need more reasons to create dynamic content? No problem! 90% of the information we assimilate is received through sight and, what’s more, we retain 42% more information when the content moves.

• Generate experiences with your content.
• It’s got the Wow effect. Very Wow.
• Make sure your audience remembers the message.

This approach differs from the traditional internal audit approach, which is more controls-based and focuses on verifying compliance with policies and procedures. With RBIA, auditors have more flexibility to design their audit activities to match the processes and controls that are actually in place within their organisation. The approach also reinforces the responsibility of management and BOD (Board of Directors) for managing risk, rather than placing this responsibility on auditors.

Risk-based internal audit

Risk-based internal audit (RBIA) is a methodology that connects an organization's internal audit to its overall risk management framework. It focuses on an organization's top risks and provides assurance that risk management processes are effective.

I employed a top-down approach when developing this modular framework. As a result, each learning outcome identified in 'The WHY' is mapped to a dedicated module. The one exception is LO1, which is covered over two modules due to the volume of content to be covered.

Mapping Learning Outcomes

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• Make sure your audience remembers the message.
• Activate and surprise your audience.

Got an idea?

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Create a new layer with all the Genially features.

• Generate experiences with your content.
• It’s got the Wow effect. Very Wow.
• Make sure your audience remembers the message.
• Activate and surprise your audience.

Got an idea?

Use this space to add awesome interactivity. Include text, images, videos, tables, PDFs... even interactive questions! Premium tip: Get information on how your audience interacts with your creation:

• Visit the Analytics settings;
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• Let the communication flow!

Content Mapping

Using an Action Mapping Approach

I used an action mapping approach to identify the content for each module, just as I had used it to identify the learning outcomes:

1. For each module, I identified the blockers that currently prevented internal auditors from achieving the learning objective (i.e. the action)
2. I then identified the content that would be required to overcome each blocker.
3. Finally, I created at least one distinct lesson per blocker, to ensure that all barriers to learning were addressed by the content therein.