October 2011

Let’s cut to the chase! The past decade has seen a rise in stature of the internal audit profession that is unparalleled in its history. Leading the way have been the men and women who led internal audit functions in enterprises around the world. In the past few years, I have had the privilege of getting to know many of them and the departments they lead. I am confident when I say that the ov​erall caliber of chief audit executives (CAEs) in 2011 has never been stronger! 

I have been in the internal audit profession long enough to remember when there was still a grain of truth in the stereotype that accountants and auditors, by nature, were bean counters who hovered over 16-column spreadsheets.…

I’ll never forget my seventh-grade English teacher telling us, “It’s not what you say but how you say it that counts.” Obviously she was exaggerating, but the point still stands: How we say things can make a difference. A well-written audit report should be a call to action, but a poorly written report can result in inappropriate action or in no action at all. In some cases, poor report writing can ruin working relationships or actively harm an auditor’s reputation. Little things can mean a lot, and at times, a minor change to how a recommendation is worded can make all the difference in how our suggestions are received.…

There will be no false modesty in today’s blog. Let’s admit it: At most organizations, internal auditors are the unparalleled experts at internal controls. We work tirelessly to ensure management maintains up-to-date written policies and procedures. We encourage our audit clients to share ideas on best practices between different operating divisions. We promote good governance, advocate transparency, and, of course, extol the benefits of having internal audits. We know we are agents for positive change.​​​

Unfortunately, I am starting to wonder if we are like the cobbler whose children go barefoot. Despite all our advice, despite a robust body of professional guidance, despite advice from just about every internal audit expert you can find … today’s internal audit shops are not always models of strong internal controls.…

When I hear jokes about internal auditors, usually I can just laugh and blow it off. After all, there are plenty of jokes about doctors and lawyers and pointy-headed bosses, so why shouldn’​​t jokes be told about us? I attend quite a few audit conferences, and I’m used to the occasional joke about how internal auditors are heartless, or how we have dry personalities, or even how (dare I say it?) we “get in the way” when people are trying to do “productive” work. Once in a while, though, a joke strikes a little too close to home. ​

I was at a conference in Canada last week, and a speaker asked, “How many internal auditors does it take to screw in a light bulb?”…