May 20, 2014

Walking a Tightrope: When Stakeholder Expectations Don’t Align

One of the features that makes internal auditing so valuable to modern enterprises is that we serve multiple stakeholders, including the board, various levels of management, and even external auditors and regulators. One of the challenges is that these stakeholder groups often have very different expectations of us, and very different perspectives on how we add value.

Differences of opinions among internal audit stakeholders are not uncommon, but it can become particularly problematic if the disagreement is between the audit committee and management. In such cases, the chief audit executive (CAE) can feel caught between two very powerful forces.

I have heard CAEs taking sides in these debates, based not on the particular issue at hand but on whose opinion should take precedence.…

May 12, 2014

For Internal Auditors, Awareness Begins at Home

Most of us in internal audit leadership roles naturally assume that board members and management fully understand our capabilities and appreciate the value that internal audit can deliver. But do they really understand? And if they don’t, whose fault is that?

Advocating for the internal audit profession is one of The IIA’s top priorities year-round. But each May, we join our members in turning up the volume a bit in telling our story. As part of International Internal Audit Awareness Month, we seek recognition and proclamations from government officials, we reach out to youth, we get out into the community, we engage through social media, and we participate in myriad other activities to promote awareness and support.…

May 6, 2014

Should We Try to Keep Everyone in Line?

It seems that internal auditors are increasingly hearing from stakeholders who are concerned about a duplication of efforts between internal audit and other oversight functions within an organization. No matter how meticulously roles and responsibilities are assigned and documented, issues inevitably come up that fall into a gray area between internal audit and other monitoring activities, such as compliance or risk management. And where responsibility is not clearly defined, things can go awry.

A surprising number of internal audit recommendations spring from these “Who’s on first?” quandaries. That’s one of the reasons we spend so much time preparing flowcharts and narratives aimed at delineating responsibilities.…

April 29, 2014

Is Internal Audit Losing Value? Not So Fast, My Friend!

I recently spotted the headline “Is Internal Audit Losing Value?” in a respected business journal. It was for an article based on survey results in one of the multitude of white papers on the internal audit profession that come out around the first quarter each year. Researchers indicated that a greater number of managers are questioning whether they receive “significant value” from internal audit.

The survey found that 68 percent of board members believe internal audit adds “significant value,” while 65 percent believe it “performs well.”

Is there room for improvement? Absolutely. But, when I read headlines that suggest internal audit is perceived as providing less value, I am reminded of the favorite retort of ESPN sports broadcaster Lee Corso — “Not so fast, my friend!”…

April 21, 2014

Managing Perceptions: What Should Internal Auditors Say on the Elevator?

I was recently interviewed about internal auditing by Federal News Radio, an AM and Internet station out of Washington, D.C. That interview was a great opportunity to represent the internal audit profession, but it also turned out to be an important reminder for me about just how internal auditors are often perceived.

The host opened the interview by saying, “Meet an auditor at a cocktail party, and you might decide you suddenly need a fresh drink.”

While the radio host was clearly engaged in a bit of levity, there may be more than a grain of truth in his portrayal of our reputation.…

April 14, 2014

5 Risks That Should Be On the Internal Audit Radar – Now!

Generally speaking, I think internal auditors do a good job of assessing risks and developing risk-based audit plans. But there is always a danger that unfamiliar risks may be overlooked or that rapidly emerging risks will render even the best crafted audit plans obsolete. If you typically undertake risk assessments only once or twice a year, you may not have incorporated several risks that have suddenly burst onto the radar of management or the board of your organization.

Here are some areas that should be in our risk cross hairs in 2014:

1. Cybersecurity Frameworks. I know you’ve heard it before: Cybersecurity is a huge area of concern, ranking near the top of nearly every list of business risks for about a decade.…

April 7, 2014

Changing Times, Changing Priorities: Are We Passing the Test?

On the surface, opportunities for internal auditors seem to be better than ever, with great prospects for career advancement. We are in a growing field and, because turnover rates are relatively high, new supervisory and management positions are constantly becoming available. As well, internal auditors are able to make important job contacts through their organizations, and many doors are open to us.

But it’s not all good news, and that could be our own fault. We may be doing a disservice to the rising generation of career internal auditors by actually limiting opportunities for advancement, despite our best intentions.

Advancement into audit management is very achievable these days, but getting a job as a chief audit executive (CAE) might be more difficult for career internal auditors than most of us would have imagined only a few years ago.…

March 30, 2014

American Center for Government Auditing: A Platform for Guardians of Public Trust

Government auditors often don’t get the respect they deserve. Not only do they contend with notoriously tight budgets and limited staff, but they also work in a politically charged environment where policies and procedures often are anchored in the shifting sands of political will, rather than in best practices. Doing the right thing can be especially difficult when it runs counter to a popularly held opinion. ​​As I have noted before​​, we all have an interest in their success, because they are “the guardians of public trust.”​​

In the private sector, the free market fosters a robust support system of conferences and consultancies for internal auditors.…

March 23, 2014

10 Vital Lessons From the Audit Trail

Over the years, I have sought to use this blog to offer critical imperatives that I believe internal auditors needed to address. Sometimes, these were strategic. Sometimes, they were tactical. Many of the blog posts were drawn from my experiences as an internal auditor and chief audit executive. I recently took the next step and assimilated the lessons I’ve learned throughout my career into a book. Lessons Learned on the Audit Trail is being released this week by The IIA Research Foundation.

While I draw on my personal and professional experiences for the book, it is the “lessons learned” that I believe will be of most value to the reader.…

March 17, 2014

The Amazing Growth of Internal Auditing in the Middle East

I am posting my blog this week from Dubai, in the United Arab Emirates, where I am addressing IIA–UAE’s 15th Annual Regional Internal Audit Conference.

In the 73 years since The Institute of Internal Auditors was founded, our profession has grown at a remarkable rate. But as with all occupations, internal auditing has had its ups and downs. The pace has never been steady and, at times, activity has been greater in some industries or geographic regions than in others.

Now and then, however, something happens that transcends our usual expectations for expansion and, in certain parts of the world, internal auditing takes a major step forward in a very short period of time.…