Not even an appearance by Star Wars' Princess Leia actress Carrie Fisher 100 yards away could distract a roomful of business people from focusing on a panel discussion entitled "Getting the most out of your internal audit function — an executive's perspective."

And the packed audience heard from some of Bermuda's leading business sector executives about how they deploy internal audits and what they do to overcome suspicion and friction that can be created within the workplace as auditors carry out their tasks of checking and assessing business units.

Extra chairs had to be borrowed from nearby rooms to provide enough seats for the packed gathering that showed up at Butterfield Bank for the event arranged by the Institute of Internal Auditors.

Phil Butterfield, CEO of Bank of Bermuda, explaining the value of internal audits, said they added a degree of peace of mind when it came to the "daunting task" of signing off financial data in the increasing scrutinised environment of banking and finance.

"To have the confidence (to sign off) it is imperative to rely upon the skills, knowledge and eyes of the internal audit people. It doesn't make them the most popular people in the organisation, so you have to give them shelter," said Mr. Butterfield.

"They are there to report the truth and if you are doing that then the chances are you are doing the right thing."

He said it was important to have closure after an audit by speaking to the staff concerned in the audited area and discuss any weakness identified and put together a plan to improve things.

Mr. Butterfield said one incentive to help staff work efficiently and effectively was to make them aware that a bad audit report on them would equate to a financial loss in their pocket.

Since Bank of Bermuda amalgamated with HSBC in 2003 it has had to undergo significant changes and Mr. Butterfield said he had been warned by the internal auditor at the outset that the audits would start off as being "red" as the bank adjusted to global standards expected of a HSBC affiliate.

He said: "Our goal has been to move from 'red to green' and that has given us a level of understanding of where we were and where we had to go, and it was also clearer where we had to add resources. It is not yet as 'green' as I would like but we are making progress because of the discourse we had at the start with the internal auditors."

Andy Gibbs, chief finance officer of ACE Global Re, spoke of the benefit of having staff who understand the function of an internal audit and what it is trying to achieve.

That point was picked up and expanded upon by Montpelier Re's chief operations officer Tom Busher, who said: "You should be able to look at internal audit as a targeted tool. If there is an aspect that gives concern or you are doing something new then an internal audit can find if there is an issue (that needs to be addressed)."

He said an effective audit team had to be "on-side" with the company's culture and be able to point out things that are being done right or wrong and to do more than simply identify problems but to also offer potential solutions.

"They have to have a knowledge of human nature, be a good listener and be able to see the problem behind the problem."

Mr. Busher said he made a point of sending notes to the staff within the areas of the business that are being targeted by internal audits to ask them to 'buy in' to the audit and what it is seeking to achieve. To do that it was also important that the internal audit team — which for Montpelier is brought in from outside — understood the company's culture and the objectives it was seeking through an audit.

His counterpart at Bermuda Commercial Bank, Dominique Smith, explained the benefit of having someone within the organisation employed as the internal auditor. She said: "We have someone on the ground who knows how the company operates and knows the management."

She said friction occurs when a business unit being audited does not understand the internal audit's goals, and management needed to explain the objectives. It was also important for the internal auditor(s) to stay abreast of the regulatory environment and relate information to management.

She added: "I see the internal auditor as my consultant, so where there is an issue that needs to be changed the internal auditor is the person we go back to for suggestions that we can take to the board. In that way we are communicating and getting much more from our internal audit."

Bermuda Commercial Bank has used feedback from its internal audits to improve training and operational issues.