September 2015

September 28, 2015

Volkswagen Scandal: The Undoing of a Corporate Icon

My first car was a used 1967 Volkswagen Beetle. It was a great little “starter” car, but only a couple of months after I bought it, the car was stolen. Last week, I relived that loss when Volkswagen was stolen from all of us.

The venerable automaker’s shocking admission that it developed and installed software designed to circumvent U.S. emissions rules will forever change how the company is perceived by the public. The phrase “German engineering,” once synonymous with quality, will now be the butt of jokes on late-night talk shows.

What’s more, the scandal once again raises serious questions about the inner workings, and possibly ethical practices, of a respected corporation.…

September 24, 2015

Internal Auditors Can Learn a Lot From the Wit and Wisdom of Yogi Berra

This week, America lost one of its true icons with the death of former New York Yankees great Yogi Berra. He was 90. While Yogi was widely known and revered as a player then manager in the world of baseball, he became equally famous for his clever comments, sayings, and double entendres, which became known as “Yogi-isms.”

Yogi-isms seemed contradictory or silly on the surface, but they often contained an underlying and powerful message that offered not just levity, but profound wisdom. Journalist and author Allen Barra characterized Berra’s quotes as “distilled bits of wisdom which, like good country songs and old John Wayne movies, get to the truth in a hurry.”…

September 21, 2015

Overcoming Stigmas: We Don’t Check Boxes or Count Beans in the 21st Century

The IIA’s Financial Services Audit Center recently hosted a well-attended and highly successful inaugural Financial Services Exchange in Washington, D.C., bringing together legislators, regulators, and internal auditors whose work focuses on financial and insurance services.

I found it interesting that one of the guest speakers made a passing reference to internal auditors “checking boxes,” prompting a collective wince from some in the crowd of more than 400 internal audit professionals. It reminded me of an incident a few years ago when a member of U.S. ​Congress, who upon meeting me, referred to internal auditors as “bean counters.” In response, I gently suggested that, “We used to count the beans, but today’s internal auditors are more apt to be examining how the beans are grown, how they are harvested, and how they are taken to market.”…

September 14, 2015

It’s Time Every Publicly Traded Company Has Internal Audit

In a blog earlier this year, I sounded an alarm about the dangers of investing in companies with no internal audit function. Ultimately, the goal was to raise awareness of the risks that accompany the absence of internal audit in publicly traded companies.

That effort took an important step forward last week when The IIA formally recommended to the U.S. Securities and Exchange Commission that all publicly traded companies be required to have an internal audit function.

There have been a number of high-profile financial and corporate governance scandals of late that should hammer home the absolutely necessity of good corporate governance, and it should go without saying that internal audit adds value to that process by providing effective oversight of the control environment.…

September 8, 2015

5 Reasons Internal Auditing Never Gets Old

Early in my career, my ambition got the better of me, and I left internal auditing for an immediate promotion in an accounting role. Being young and inexperienced, I didn’t appreciate the importance of diversity and challenge in the overall equation of job satisfaction. It didn’t take me long to figure it out in my new role.

The daily grind of reviewing tedious and complex claims for reimbursement by third-party vendors was only interesting and challenging for a few weeks. By the third month, I could only describe the work as “mind numbing.” By the sixth month, I was already talking to my old boss (the CAE in the internal audit department where I worked) about returning.…