1 JOB ROTATION YOHAN J ATLAN INTERNAL AUDITING THE IIA NY CHAPTER SCHOLARSHIP OPPORTUNITY LONG ISLAND UNIVERSITY 11/18/2013
2 Question 1 The internal audit function does provide an independent assurance to the board of directors, and top management on the organization's quality and effectiveness of the internal control and this helps the board of directors and top management to protect the reputation of the organization. The internal audit function needs to develop an independent and appropriately informed view of any risks or problems faced by an organization based on the records of the organization and the auditor s professional competence. The internal auditors should not be involved in the designing, selecting, implementing or in the operation of specific internal control measures. The independence of the internal auditors, however, does not stop the top management from requesting input from the internal audit function on risk and internal control matters. In any case, the development and implementation of the internal control system remains the duty of management (Vallabhaneni, 2013). Performing of similar tasks or routine duties continuously does negatively affect the internal auditor s capacity to critically judge due to the possibility of loss of objectivity. This makes it of sound practice to periodically rotate the internal audit employees who are within the internal audit function without jeopardizing their competence, integrity, and expertise. The scope of the internal auditor s activities should include the examination and evaluation of the effectiveness of the job rotation program. This will include its benefits to the organization, its demerits and how effective and efficient it can be done to improve the organization's performance. No one personnel should be kept in the same position for an indefinitely long period of time. The rotation program includes requiring that some staff should take regular leave so that other personnel can have the opportunity to carry out their functions. Duties need to be rotated among
3 personnel who are on the same organizational level such as the payroll personnel and the credit control personnel. The internal auditor should encourage the staff to take annual leave so that they can provide an opportunity for their actions and work to be checked by an independent person. The auditor conducts routine and automatic checks on duties and work rotated to ensure that the duties are operating efficiently. The auditor does this on a surprise basis to minimize any error or fraud that may come up. This may include the rotated duties in the cash office and the safeguarding of fixed assets. The internal auditor should ensure that the personnel involved in the rotation program are of high integrity and competency. This is because the internal control system is dependent on them. The internal auditor, therefore, should be involved in their recruitment and should ensure that the staff is competent with integrity and intelligence. The auditor should advice management on the assignment of responsibilities to the staff based on their capability and ensures that they undergo training when necessary. Rotation of duties among lower level employees may tend to make them indiscipline. The internal auditor should guide responsible and competent officials to supervise the transactions carried out by this staff and their recording to correct errors done by them. The auditor should also encourage the management to do a comparison between the actual performances of the rotated staff in different offices and check how they fair on in different positions. The rotation program should be authorized and approved by the auditor. This is because if not approved, it might be conducted in an ill manner. Personnel of different organizational levels may end up being rotated, and this may make the organization not to operate effectively. The internal auditor should encourage management to have an organizational plan chart which clearly
4 shows the various departments within an organization, their functions, and the persons who are charged with the responsibility of ensuring that the functions are fulfilled. By this, the internal auditor seeks to ensure that the organization of the rotated duties across departments and this will boost accountability in the organization. The rotation program goes hand in hand with the segregation of duties. The internal auditor should ensure that there is separation of various duties such that one staff does not process and record to completion from the beginning a transaction without being checked by another staff. This will minimize the risk and error of the rotation program and the auditor should ensure that they are done by different staff and departments as much as practicable. Question 2 When the job rotation program is planned and executed in a careful manner the result will be advantageous. The employees that are involved in a carefully executed manner do benefit and learn from it. The job rotation program helps the employees comply with regulations set out as it gives the ideas of the jobs that are to be performed by them in every level. The rotation assignment helps the persons involved in the program better understand the organization and hence better perform for the organization. For example shifting firefighters to offices will help them understand the other activities that an organization is involved in. Job rotation will improve productivity of the employees. If the assignment is carried out in an effective way, it will raise the employee s morale as they try to get new challenges and this makes less a problem boredom or burnout. The employees cannot call in sick, report late to work or leave job easily. Skills gained in one job can be applied in another job, and this will lead to the
5 job being performed more efficiently and effectively. For example a secretary taking on a job in the accounts office will use the skills of inputting data in the computerization of accounts. Job rotation assignments for the personnel of an organization are a practical contingency plan that energizes and enriches the lives of the personnel that are available. This is mostly beneficial for small organizations whose personnel occasionally get out of the job due to illness, getting injured or going for a vacation and this adversely affects the workflow of the organization if there s none to cover for them. For example during compulsory leaves an organization may be short of employees. Most employees do leave their jobs due to burnout and boredom. This affects the morale of workers who stay and also costs the organization time and money in the training and recruitment of their replacements. Workers who have mastered in a given task get to solve problems that may arise, and this is because the job rotation program exposes workers to new challenges and this motivates them including on-site resources. This is applied mostly in the repairing and assembly departments. Job rotation assignments create competency awareness among the employees of an organization. A manager may be used to seeing an employee take on a similar task day after day and this can make one think that the same employee cannot do anything else. The rotation program does bring out the hidden talents and strengths of workers which one could not imagine to have. This gives employees the opportunity to demonstrate and develop analytical communication and the skills of leadership which are not part of their current job specifications and this makes them realize the opportunity for career growth and promotions, and this increases their value to the
6 organization. Even if an employee shifts to another job he or she performs to some expectations of the job requirements. Job rotation assignments make employees appreciate the work of a fellow employee in an organization. This is because the training of employees in a job rotation program is done in such a way that the workers can perform different jobs and this fosters respect. It provides the opportunity for employees to understand better what their fellow employees do. An employee working in the supply room, for example, may take answering of calls the whole day to be a simple task and cannot understand why a receptionist gets tired always and stressed. These imaginations make some workers to take their fellow employees for granted and under grade the importance of their duties. Job rotation assignments also do create a broader view of interrelationships for the staff and appreciate what the organization does, and the value it creates to the customers. This, in turn, leads to more commitment to the organizations goals and increases the sense of engagement to a more supportive workplace culture. If done appropriately, job rotation will lead to increased performance and reduce errors and frauds. This is because an employee does know that his work and the job will be reviewed by a fellow employee. This will prompt the employee to perform his or her duties carefully. This will improve the efficiency of the work done and hence increased profits to the organization. There will be reduced supervision and hence save time to do other activities. Job rotation complies with the safety of employees and the safeguarding of organization assets. Job rotation assignments will reduce the level of injuries in the workplace. Once a worker has performed a given task for two to three years, such as entering data into a computer, it makes one reduce the risk of repetitive motion if he or she moves to the same assembly level. Job rotation
7 reduces the physical strain of employees, but this is when the rotation is done at different muscles (Arens et al., 2006). Question 3 Rotation assignments reduce the uniformity in quality of work that is done by employees in an organization. A trained worker will produce work of a different quality from that of a new employee. It does take time for an employee who is rotated to another department. In the process of learning mistakes are committed which lowers the quality of the work carried out. Rotation is coupled with frequent interruption of the operation of an organization. One might have done a particular job for a long time enough to be comfortable and abruptly gets being rotated to another work station or development. Through this work in all the departments and stations involved get interrupted. For example, the firefighting employees who perfect the art of firefighting and are moved abruptly to a new office. Union members do misunderstand the job rotation assignment at times. The union umbrellas of employees at times think that the workers get harassed by shifting them within different jobs. An employee also does raise concern about the security of the job. Some experienced workers will not be willing to train a different employee how to operate or go about a task as part of rotation assignment because of concern that the other employees will take away his job. Some employees may be reluctant to rotating to other jobs because of the worry that they will less enjoy the other job as they are not certain if they will get back to the other jobs that they prefer. Some organizations are not appropriate candidates of job rotation. An employee may be assigned to handle a specific customer account for instance, and this can create confusion to the clients
8 and this may make them lose their trust and loyalty. Some new employees are not up to the task, and this leads to them committing mistakes which turnout to be costly to remedy. Frequent job rotation program makes the employees fail to become confident or proficient to any work that they are assigned to perform. The job rotation program leads to scheduling of the jobs. If one works for two to three years in a particular work, day or night he or she will have to be used to it. For instance, one working in a hotel during daytime and shifted to the night shift, his or her schedule will have been disrupted. Some of the workers may be reluctant to be shifted to other offices, which they are not used to. This will affect the workflow in an organization and hence make the organization operate ineffectively. If not done appropriately, job rotation may lower the morale of workers too. This may arise when employees of a lower level are allowed to take the tasks of their fellow employees on a higher level. The employees may feel that they have been demoted which will make them not work appropriately and at some point they may leave the job in that organization and move to other organizations. Some employees may do the jobs allocated to them wrongly intentionally. Rotation of jobs that take place in organizations with branches in different locations far from one another will require employees to commute over long distances, and this may lead to increased use of money and hence reducing their savings. The extra costs will cause inconvenience on the side of the employees and hence reduce the psychological benefits of the job rotation program. Some of the workers will be required to shift even the residence location. For example in government hospitals which are located in different areas (Eriksson and Ortega, 2004).
9 References Vallabhaneni, S. R. (2013). Internal audit basics. Hoboken, N.J., Wiley. Arens, A. A., Elder, R. J., & Beasley, M. S. (2006). Auditing and assurance services: an integrated approach. Upper Saddle River, N.J., Pearson Prentice Hall. Crous, C. (2012). Auditing and assurance services. Maidenhead, McGraw-Hill Higher Education. Cortina, J. M., & Landis, R. S. (2013). Modern research methods for the study of behavior in organizations. New York, Brunner-Routledge. Eriksson, T., & Ortega, J. (2004). The adoption of job rotation testing the theories. Aarhus, Aarhus School of Business, Dept. of Economics. Institute Of Chartered Accountants in England and Wales. (2004).The internal audit function: guidance for audit committees. London, Institute of Chartered Accountants in England & Wales.