2009

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.…

One of the reasons that I returned to The IIA was to play a role in advancing the profession on a global basis. There are few professions that have evolved globally as seamlessly as has the internal audit profession. The IIA has been integral to that evolution. The IIA’s International Conference held earlier this month in Johannesburg, South Africa, provided another example of how the profession knows no borders. More than 2,000 internal audit professionals attended from around the world — a turnout considered a huge success in any economic environment, much less the one we’re facing today.

A glance at the conference agenda demonstrates the diversity of our profession.…

There are very few people and few organizations that haven’t yet been touched directly or indirectly by the troubled economy. Everywhere we turn, individuals and organizations are making adjustments — tightening here, cutting there, and paying closer attention to how resources are being spent. Just a look at this week’s headlines gives you a good indication that everyone’s watching their step. What a perfect opportunity for our profession to step up to the plate to lead the charge in asking, “How do we adapt?” ​

To capture in-depth and qualitative analysis of these opportunities and how the internal audit profession can be of utmost value in this changing environment, The Institute of Internal Auditors (IIA) pulled together chief audit executives (CAEs) from some of the largest companies — primarily Fortune 100 companies, as well as several from the Fortune 250 — and representatives from internal audit service providers, the U.S.…

The vastness of our profession has never ceased to amaze me. It is estimated there are more than one million internal auditors in the world. Our colleagues work tirelessly in every sector and industry imaginable to provide assurance on the effectiveness of risk management, control, and governance processes. In the vast majority of instances, our work is appreciated and lauded for the value it brings. However, with an alarming frequency, it seems that some of our colleagues who audit local government operations are waging an uphill battle against formidable political forces.

Government has always been a challenging place to audit. It is often argued that government can only be effective if it “maintains the public trust.”…

As I commented in my recent blog posts on Feb. 10 and F​eb. 25, internal auditing is sometimes accused of being reactive rather than proactive when addressing emerging risks. Changing that perception is important for the profession as it moves forward. However, as a recent IIA survey reveals, the profession has much to be proud of when it comes to demonstrating its agility and versatility in the face of a dynamically changing environment. Conducted during the first week of March, the survey solicited the insights of more than 360 respondents — 70 percent of which are chief audit executives (CAEs) — on how the current economic conditions impacting the profession in North America and the coverage that internal auditing is providing in the corporate sector.…

Having served as a U.S. federal inspector general (IG) and later as an advisor to scores of Fortune 500 chief audit executives, I have the unique perspective of understanding both worlds. No one would seriously suggest imposing the federal IG model on the corporate sector. It simply would not work. However, in the environment in which we are currently operating, there are things that corporate CAEs can learn from their federal counterparts about keeping an eye on reputational risks and focusing on efficiencies and ope​rational effectiveness to drive down costs.

So who are these federal IGs? The modern U.S. federal IG model dates from the late 1970s.…

The great French military and political leader, Charles de Gaulle, is said to have observed that “generals are always fighting the last war.” The reasoning behind this often-used quote is that military threats are always changing and evolving, and there is a temptation to assume that the next threat will look just like the last one. My fear is that internal auditors are tempted to fall into this trap. However, focusing audit coverage on “yesterday’s risks” can result in being ill-prepared when new calamities appear.

In the late 1990s, the corporate sector became enamored with the “value-added” concept of measuring the worth of corporate functions.…

There was a time when a career goal for many internal audit professionals was to rise through the corporate internal audit ranks to become their company’s General Auditor – what is known as today’s Chief Audit Executive (CAE).  My first CAE had been an internal audit professional almost 20 years when I joined the organization.  He was still the CAE 13 years later when I took his place (having left and returned to the department twice).

Today’s CAE, however, is quite a different executive than in the past.  In the modern corporate model, the CAE position is frequently a rotational assignment that is filled for 3-5 year tenures by upwardly mobile executives out of the CFO organization. …