A couple of weeks ago, I responded to a U.S. Securities and Exchange Commission (SEC) request for input on a proposal that NASDAQ-listed companies have an internal audit function. This rule change, if adopted, would elevate internal auditing at NASDAQ-listed companies to a level on par with what is already required for companies listed on the New York Stock Exchange.

It is a change that has been years in the making, and as I signed that letter I was reminded of the Federal Reserve Board’s recent statement on the importance of a strong and effective internal audit function in financial services institutions in the “post-financial crisis” era. To have these two organizations putting such heightened emphasis on internal auditing makes me think that 2013 is shaping up to be an exclamation mark on a decade of progress.

People who — up to this point — haven’t been very interested in internal auditing are starting to pay attention. We’re seeing regular postings in The Wall Street Journal, and references to internal auditing are working their way into the mainstream press with increasing frequency. Our own research indicates that boards and management have demonstrated their confidence in internal audit by increasing budgets.

More proof:

The IIA Audit Executive Center’s 2013 Pulse of the Profession report (PDF), unveiled last month at the General Audit Management (GAM) conference in Las Vegas, revealed that 75 percent of the chief audit executives (CAEs) surveyed now report administratively to either the CEO or chief financial officer, with an accelerating shift toward CEO. Functionally, the majority now reports to the board or audit committee. This is a significant enhancement in the credibility of the CAE and the internal audit function. The higher up in the organizational structure a CAE reports, the more objective that individual can be in overseeing audits of tough areas and the more independent the internal audit function becomes in the eyes of stakeholders.

PricewaterhouseCoopers’ annual 2013 State of the Internal Audit Profession study (PDF), also issued at GAM, concluded that internal audit executives worldwide have more opportunities than ever to contribute to their organizations in a meaningful way.

Protiviti’s 2013 Internal Audit Capabilities and Needs Survey (PDF) found that internal audit professionals are adjusting rapidly to new challenges in a changing business environment and prioritizing social media, fraud risk, and data analysis tools as key areas for improvement.

As internal audit focus evolves from the traditional areas of finance and governance to an increased emphasis on IT and strategic risk exposure, it is reassuring that CAEs are heeding the call to up their game. The recent decision by the SEC to allow companies to make market-moving announcements via social media suggests the importance of these evolving areas will only increase. This elevated role of internal audit is something we at The IIA have been pushing toward for years. To see our efforts bearing fruit: An exclamation mark, indeed!