October 2014

October 27, 2014

Internal Audit: The Power of Shoutouts

I met a behavioral psychologist at a recent conference who told me he thinks internal auditors “get it all wrong” when it comes to changing our clients’ behavior. He said internal auditors, especially in their reports, concentrate on what went wrong in the past, and often fail to mention anything that went well or is operating efficiently in the present. The psychologist was adamant that positive reinforcement works best when you want to change behavior, and that this “rule” is especially important in a profession such as internal auditing because, as auditors, we have a reputation (whether deserved or not) for finding fault more often than we find reasons for praise.…

October 13, 2014

5 Bold Steps to Transform Internal Audit’s Image

Over the years, I have addressed many internal audit audiences around the world on the importance of aligning with stakeholder expectations. I often close my message by encouraging chief audit executives (CAEs) and internal auditors to shed the image of fault-finder and traffic cop (images for which too many suffer), and become trusted advisors who provide insight and foresight – not just hindsight. When I finish delivering my message, the question is invariably asked: “How do I start?”

The first steps in transforming an internal audit department’s image can be crucial. A false start, or one that is perceived as insincere, can render any efforts that come afterward as downright fruitless.…

October 6, 2014

Good Internal Audits Focus on the Roots, Not Just the Trees

As internal auditors, we are often tempted to stress in our reports the conditions we observe. After all, conditions that result from risk management or control failures can often be described in compelling terms. A failure of a new IT system, a key compliance requirement, or a critical financial control are sure to rivet the attention of management and the board. Internal audit reports also frequently include in-depth discussions of the effects associated with the conditions. After all, the only thing more sensational than describing something that is broken is regaling the reader with all of the consequences of the breakage. …