The Audit Podcast | Ep 239: Reimagining Audit Staffing w/ Chris Denver

Host: Trent Russell
Guest: Chris Denver (Former CAE, Interim/Fractional CFO, Past IIA Chicago President)
Date: May 6, 2025

Episode Overview

In this engaging episode, Trent Russell welcomes Chris Denver to discuss the "Audit Function Reimagined"—a transformative approach to audit staffing highlighted in Chris's recent article for Internal Auditor Magazine (Dec 16, 2024). The conversation centers on Chris’s new internal audit organization model, the urgent need for creative resource management as the audit profession faces deepening talent shortages, and how technology and automation can be leveraged alongside external partners. The episode zeros in on practical steps for Chief Audit Executives (CAEs) to evolve their teams now—not just in the distant future.

Key Discussion Points & Insights

1. The Drivers of Change in Audit Staffing

• Talent Shortages are Present-Day, Not Future, Issues
  • “What I was thinking is…what the future of internal auditing looks like. …I was realizing there’s a tremendous shortage of resources, of human resources available. First of all, there’s a tremendous shortage of quality human resources.” (Chris, 06:48)
  • The scarcity of strong audit talent is already constraining traditional staffing pyramids.
  • The need for creative solutions—including automation and flexible talent sourcing—is now.

2. The Traditional vs. New Audit Organization Model

• Visualizing the Change
  • Trent walks listeners through the traditional pyramid:
    • Technology Support → Staff → Senior Auditors → Managers → Directors → CAE
  • Chris’s new model:
    • A “diamond” structure, where much of the staff/senior layer is replaced by automation and external services.
    • “[In the new model,] a chunk of senior auditors and staff have been removed and replaced with automation and outside services.” (Trent, 09:01)
  • Chris acknowledges the diagram’s limitations but stresses the shift: internal audit teams must “build a modified pyramid…where a lot of those bricks are coming from some sort of a resource that's not your own W2 employee.” (Chris, 08:47)

3. Building the Business Case for Automation & External Services

• Automation as the Cost Leader

  • “Automation is ultimately going to be the lowest cost option, even beating out offshoring.” (Trent, 01:20 summary)
  • Chris notes the democratization of sophisticated tooling (“I can leverage LLMs to do coding…that two years ago I could not have possibly done on my own.” (Chris, 15:41)), making automation accessible to non-technical auditors.

• Tailor Solutions to Your Organization

  • “Each organization will have something of a bespoke model that’s going to require the CAE to be highly creative and flexible. …You’ve got to build your own team to run this race.” (Chris, 12:52)
  • Paint a future vision for leadership, understand the specific resource gaps, and approach implementation as an iterative journey.

• Selling the Vision Internally

  • “Your CFO has got the same problem on their own team, right? Your CIO’s got a lot of the same problems. So when you share…they’re all going to get it.” (Chris, 14:03)
  • But Chris cautions simply showing the new pyramid visual isn’t compelling enough—one must map it to real outcomes and maturity models for the specific organization.

4. Implementing the New Model as CAE

• Upskilling, Mapping, and Tough Choices

  • “Leaving everybody up to their own devices is not why you’re paid to be the CAE.” (Chris, 17:13)
  • Map current staff to future needs. Upskill where feasible; recognize when upskilling isn’t sufficient.
  • “Maybe the decision is…you just don’t have a role in this future vision. …But I’m not signing up for just firing people. It’s not cool. The hard part is getting it right on the hiring side and making sure…the upskilling of your staff is effective.” (Chris, 18:37)

• On Handling Team Mismatches

  • Preserve institutional knowledge: “If you cut that person loose…who do you replace them with? …If somebody totally does not map into this new vision…look to find other ways to deploy them within your company and preserve their institutional knowledge.” (Chris, 19:47)
  • Automation will not decimate headcount—there’s already a deficit of people. If AI replaces 30% of jobs, it helps close the existing gap rather than causing a surplus.

5. Practical Steps & Lasting Uncertainty

• Iterative Planning is Key
  • “Whatever you come up with today is what’s not—that’s what it’s not going to be. Right? That’s precisely wrong. But you want to be as close to precisely wrong as you possibly can be, so that your course corrections are all very minor as those future events unfold.” (Chris, 00:00 & 22:56)

6. Education Gaps & Building Future Skills

• Training for the New World
  • There is little formal guidance or curriculum for audit leaders to navigate these seismic changes.
  • “There’s not a lot of deep…available training for you as a CAE to take, or for…your staff to develop their skill sets in these areas. …So you’re gonna have to be very creative.” (Chris, 23:24)
  • Chris advocates connecting within the profession for shared learning and personal recommendations.

Notable Quotes & Memorable Moments

• Chris Denver:

  • “The old style pyramid…you can’t find enough bricks, right? So you can’t build that pyramid because there’s just not enough bricks…So you’ve got to sort of build a modified pyramid which is…where a lot of those bricks are coming from…resource that’s not your own W2 employee.” (08:47)
  • “The hard part is getting it right on the hiring side and making sure the training and upskilling of your staff is effective.” (18:54)
  • “As we sit here today, whatever plan we make is guaranteed to be wrong. Like, that’s exactly what’s not going to happen. But you’ve got to have that plan in order to start getting ready for that future and make hopefully just very small course corrections…” (21:26)
  • “If agentic AI covered off 30% of internal audit jobs, great, right? Like, we have a deficit of people, that’s probably more than that. So we would just be kind of getting close to breaking even…” (20:26)
  • “There is not a lot of guidance available to CAEs as to how to do this right…” (23:24)

• Trent Russell:

  • “For a lot of folks to start is automating with some of these tools…that’s going to be the lowest cost option eventually, maybe not right now, but I don’t think we’re too far away from it…” (11:20)

Timestamps for Key Segments

• [06:35]: Introduction to the Four-Part Audit Organization Model
• [08:47]: Why the Traditional Pyramid Is No Longer Viable
• [12:22]: Business Case for Automation Over Offshoring
• [17:13]: How a CAE Should Roll Out the New Model
• [19:47]: Handling Staff Who Don’t Fit the Future Model
• [21:26 & 22:56]: The Importance of Iterative Planning ("Precisely Wrong" Quote)
• [23:24]: Training and Resource Gaps for CAEs and Audit Staff

Takeaways

• The audit profession’s talent shortage necessitates immediate, creative solutions—starting with automation and external talent.
• The new audit staffing “pyramid” replaces much of the base with repeatable digital processes and targeted external expertise.
• CAEs should develop tailored, flexible plans, openly communicate with leadership, and prioritize upskilling and redeployment of internal knowledge.
• Perfect planning isn’t possible; staying “close to precisely wrong” and iterating is key.
• The profession lacks formalized guidance for this shift; peer learning and creative leadership are imperative.

Recommended Next Steps:

• Audit leaders should assess current and future staffing needs, identify technology and process opportunities for automation, and connect with peers for shared strategies.
• Read Chris Denver’s IA Magazine article and access show notes for further resources.