June 2009
From the very first day I became an internal auditor, the word “independence” took on particular significance. As a young auditor in government, we were taught from the beginning that “independence” was the foundation upon which internal auditing’s credibility and effectiveness was based. Over the years, our audit standards were strengthened to mandate reporting relationships that fostered independence. Yet, even when I first assumed the role of a chief audit executive (CAE) in the late 1980s, I was vaguely uncomfortable with touting “independence” when I was clearly employed by the organization in which I worked. I watched way too many “independent” CAEs meet an untimely professional demise for being a bit too “assertive” to assume that I was totally independent.…
During my travels over the past five years, I have had the opportunity to speak with many audit committee chairmen of leading corporations in the United States and Europe. One of the questions I invariably posed during my conversations was: “what is your foremost expectation out of internal auditing?” With amazing regularity, the response came back: “no surprises.” By “no surprises,” the chairmen (in reflecting the views of themselves and their fellow audit committee members) were suggesting that internal auditing should identify issues before they became a major problem for the company — and by extension — the audit committee.
At first glance, an expectation of no surprises might seem like a reasonable expectation.…