2010

This week I am attending the Asian Confederation of Institutes of Internal Auditors (ACIIA) Conference in Sydney, Australia. It is always exciting and richly rewarding to participate in confere​​nces that are as pr​​ofessionally organized and thought-provoking​ as this event. By combining the Southern Pacific and Asia Conference (SOPAC) with the annual ACIIA conference, IIA–Australia has managed to attract almost 1,000 professionals to this year’s event.

During this morning’s opening keynote address, a series of questions were posted on an overhead screen and attendees were invited to “text in” their responses. The results of the responses to one question in particular have caused me to reflect on an undercurrent that seems to be in place following the recent corporate failures and the resulting global financial crisis.…

I recently attended an internal audit conference outside of North America. One of the keynote speakers delivered a presentation on what he thought was a very provocative theme. It was his assertion that internal auditors are not “independent,” thereby (he asserted) the very definition of internal auditing was flawed. He knew I was in the audience, and I believe he f​ully expected I would challenge his views as being inaccurate. In fact, his assertion that internal auditors are not independent is not provocative at all. The International Standards for the Professional Practice of Internal Auditing (Standards) does not assert that the internal auditor is independent.…

A fe​​w months ago, I noted in this blog that the worst seemed to be behind the internal audit profession. I based that assessment on some very early indicators that the impacts of the economic crisis were abating. Six months later, the indicators are stronger than ever that a recovery is underway.

One of our primary objectives at The IIA these days is to ensure we enh​ance our relevance for chief audit executives (CAEs) — particularly those in the corporate sector. In that regard, we have been routinely surveying the profession over the past year on a range of critical topics related to the impact of the economic crisis.…

I first noticed the faint drum beat around internal auditors reengaging on fraud about a year ago. In recent weeks, the drums have become almost deafening. For example, last week​, the South Florida Chapters of The IIA and the Association of Certified Fraud Examiners held a joint full-day conference focused on fraud, and more than 230 local professionals turned out to participate. Later today, The IIA will host a one-hour webcast for North American members on “Taking Fraud Awareness to the Next Level: The Risk Universe, Technology, and Internal Audit’s Role.” More than 7,000 internal audit professionals have registered for the event — making it the largest single professional development event The IIA has ever hosted.​…

This week I have had the opportunity to visit Russia for the first time. After three days of meetings with senior government officials and chief audit executives of leading Russian companies, my optimism about the future economic development of this country in general, and IIA–Russia in particular, is very high!​

When one considers that a free market economy has only been in place in Russia for a brief 20 years, the progress is astounding. Prior to the global economic crisis, Russia’s economic growth had averaged almost 7 percent annually over the past decade. When you couple the progress to-date with the reality that Russia has more natural resources at its disposal than virtually any country in the world — the potential is unlimited.…

At the end of December, I offered my opinion on the five defining events of the p​ast decade for our profession. These types of lists are often best drawn up with the benefit of hindsight. After all, it is easy to get caught up and start offering hyperbole about virtually any event that happens.  However, there are ​some events that are obviously “game changers.” One such event may just have occurred for our profession.​

Last week, The Queen of England granted “chartered” status for the Institute of Internal Auditors U.K. and Ireland (IIA–U.K. & Ireland). On October 1 of this year, one of the most respected IIA institutes in the world is set to become the Chartered Institute of Internal Auditors.…

Call me sentimental, but I’ve always found it intriguing when twists of fate take people “full circle,” and reconnect them with an event or a milestone earlier in their life. Today I am having one of those experiences myself.

When I graduated with my accounting degree from Georgia State University (GSU) in 1975, I immediately assumed my first internal audit assignment with Trust Company Bank in Atlanta. Over the years, I’ve taught university courses and delivered lectures and presentations on the internal audit profession around the world. And despite the fulfillment derived from delivering these presentations, there has always been a faint longing to give back to my alma mater for the professional opportunities my education there afforded me.…

In late December, I wrote about the five events that defined the past decade for internal auditors. It is too speculative (and far too early) to predict any defining events for the next decade. However, I do have some views on key imperatives that internal auditors must pursue if we are to build on the success we enjoyed during the past 10 years.

The IIA’s Global Board of Directors recently updated The Institute’s five-year strategic plan. Included in the plan is a preferred milestone that internal auditing be “universally recognized as a profession” by 2014. No one is debating how far we have come as a profession.…

In the event you missed it, the U.S. Securities and Exchange Commission (SEC) announced the adoption of new rules on enhanced proxy disclosures (PDF) December 16, 2009. The new rules will likely have far-reaching impacts on risk management and corporate governance in the U.S. They require disclosures in publicly traded companies’ proxy and information statements about:

• The relationship of a company’s compensation policies and practices to risk management.
• The background and qualifications of directors and nominees.
• Legal actions involving a company’s executive officers, directors, and nominees.
• The consideration of diversity in the process by which candidates for director are considered for nomination.

One of the most significant developments of the internal audit profession in the past decade has been its rise in stature relative to audit committees. A decade ago, a chief audit executive (CAE) with a functional reporting relationship to the audit co​mmittee was considered a “leading practice.” Today, it’s the norm.

Along with enhanced reporting relationships have come a number of other practices reinforcing the value audit committees place on a strong, independent, and effective internal audit function. One of these practices has been regular and frequent “executive ​​sessions” between the audit committee and CAE. The IIA has long recognized and advocated the value of executive sessions.…