2014

Most audit executives work hard to develop open relationships with their audit committee members. The effort generally pays off. Regardless of how hard we work at fostering openness and honesty, however, some audit committee members may not be comfortable telling us everything that’s on their minds. Sometimes, they simply may not know enough about internal audit to know what we are capable of, and sometimes they are simply trying to spare our feelings. But often, it’s the things they don’t or won’t say that we most need to hear.

The audit committee might be perfectly comfortable asking us hard questions about risks and controls.…

My colleague and fellow InternalAuditorOnline blogger Norman Marks recently wrote that “Internal Auditors Should Be Brave,” meaning they should not hesitate to speak up about the things that need to be said, even if they face the prospect of retribution.

It reminded me of a Tone at the Top article in November 2009, the same year I became president and CEO of The IIA. That piece, called “What’s on Your (Corporate) Conscience?” (PDF) examined the role of internal auditors in ensuring an organization is behaving ethically.

I have blogged about the ethical responsibilities of internal auditors in the past. In April 2013, I discussed the “Seven Attributes of the Ethical Internal Audit Leader,” sharing the view that ethical internal audit leaders are “proactive.”…

Earlier this week, I came across an article that discussed an ongoing dispute in Delaware over funding of the State Auditor’s office. Partisan politics appear to be at the root of a debate over more than US $2.5 million sought by the State Auditor to make his auditors’ pay scale more competitive. The title of the article, “Delaware Auditor: Low Pay Could Muzzle ‘Watchdogs’,” might be a bit sensational, but don’t underestimate the effectiveness of purse strings toward containing internal audit functions in government or the corporate sector.

First, let me say that a vast number of corporate executives and government officials demonstrate appreciation for a strong and effective internal audit function and the oversight it can bring.…

This week marks the fifth anniversary of this blog, which I launched only days after joining The IIA’s Global Headquarters as president and CEO. It was a time of huge challenges amid the worst economic crisis since the Great Depression. The IIA, subject to the same pressures as our members, was exploring how to navigate the financial challenges we faced. And, while I acknowledged the obstacles ahead in that first blog, even then I could see potential and opportunity — for our members, for our global association, and for the internal audit profession as a whole.

The storm clouds were merely a passing front.…

Internal auditors are right to be concerned about third-party risks. The days of a company’s suppliers or partners being well-known and trusted businesses on the same street or town are a distant memory.

In the interconnected, global economy of the 21st century, you are apt to be purchasing raw materials, components, or services from business entities halfway around the world. In turn, these unfamiliar partners may be acquiring subcomponents from other businesses whose very existence may be unknown to us. Third parties can create extraordinary risks for an enterprise, as we have seen played out repeatedly on the global stage.

Hiring practices, working conditions, conflict minerals, carbon footprint, political conflict, data security, financial stability, intellectual property — the list goes on.…

Numerous vocal internal audit leaders from around the world are promoting the idea of licensing practitioners as a way to enhance the profession’s stature and proficiency. They profess a licensing requirement would give internal auditors greater credibility and even influence. In fact, a few IIA institutes have even taken up the cause within their respective countries.

I say, be careful what you wish for.

I acknowledge that licensing might come with some benefits, such as creating the appearance of greater parity between internal auditors and their external audit counterparts, such as CPAs, chartered accountants, etc. It is also argued that licensing would enhance internal audit’s ability to deliver assurance that meets rigid standards and regulations that often accompany licensing requirements, thereby elevating the confidence of internal audit’s stakeholders, corporate shareholders, and others.…

As someone who has been a part of the internal audit profession for almost four decades, I have had the privilege of working with many outstanding leaders in our field. I’ve learned that the best are those who inspire others to lead. In this sense, I would say that a good leader is also a good follower.

When people think about leadership in internal audit, they often stop at the chief audit executive (CAE). But really high-performing internal audit departments are populated with a number of leaders, and successful CAEs are the ones who inspire leadership qualities in others.

Leading isn’t just about making decisions and moving the organization in a certain direction.…

Throughout my career, there have been times when I joined a new internal audit function and it quickly became apparent that the chief audit executive (CAE) operated in a very different way than what I was accustomed to. In some cases, the CAE had a different style or preference for communicating with clients. In other cases, the CAE was a stickler on technical issues such as how findings should be communicated, how working papers should be assembled, or which words to ban from audit reports. In most instances, I was simply able to adapt to the CAE’s preferred style or philosophy.…

The New Year affords a great opportunity to re-assess your life and identify a few resolutions that can help you break bad habits or enhance your quality of life. Over the years, one of the practices I have followed in writing my blog is to open the year by sharing five New Year’s resolutions that every internal auditor should make. As I noted last year, these are not the typical resolutions about losing weight or exercising more — although some of us could certainly benefit from such resolutions as well.

Instead, the resolutions that I propose are designed to enhance the quality of our performance as internal audit professionals.…