October 2016

October 31, 2016

Whistleblowers Need Protection – Not Cash!

The Federal Reserve Bank of New York hosted a conference in October that looked at reforming culture and behavior in the financial services industry. In his opening remarks, New York Fed President William C. Dudley stated that culture is at the heart of industry problems that have eroded its trustworthiness.

“The evidence is pervasive that deep-seated cultural and ethical problems have plagued the financial services industry in recent years,” Dudley said. “Bad conduct has occurred in both investment banking and securities market activities, as well as retail banking.”

It’s hard to argue with history. From Barclay’s Libor scandal to Countrywide Financial’s discriminatory lending practices to Wells Fargo’s more recent woes, financial services has produced high-profile scandals on a seemingly routine basis.…

October 24, 2016

No Internal Audit? It Could Be Worse

Those who regularly read my blog posts will know that I have been an outspoken critic against publicly traded companies not having internal audit functions. In 2015, I shared the view that every publicly traded company be required to have an internal audit department; and in 2013, I called out Nasdaq for withdrawing its proposed listing requirement that would have mandated an internal audit function.

While my views on the importance of strong internal audit functions have certainly not changed, I do think it is important to put my views in perspective. Frankly, there are worse things than having no internal audit.…

October 17, 2016

Where Was Internal Audit? Beware Rushing to Judge

There has been no shortage recently of corporate scandals born from ineffective corporate governance, poor risk management, and toxic cultures. In each case, I inevitably hear the question, “Where was internal audit?” There is never a simple answer to that question. As with all things as complex as modern business, there is rarely an easy explanation when things go horribly awry.

In each instance, media reports, regulatory filings, or company statements — even the occasional congressional hearing — give us a glimpse into a piece of what may have led the organization astray. But to suggest a failure by i​nternal audit is a conclusion that should be drawn only when the facts are known.…

October 3, 2016

An Open Letter to Newly Appointed Audit Committee Members

To: The newly appointed audit committee member

From: IIA President and CEO Richard F. Chambers

Re: Preparing for your pending role on the audit committee

Congratulations on your appointment to the audit committee!

Your new position marks a professional milestone reflecting that you are a seasoned executive whose business and financial acumen places you among the elite members of your board. However, before you sit down at your first committee meeting, there are a number of things you should know and consider about the role you’ve taken on.  

The role of the audit committee and its value to the organization have dramatically increased in importance in the past decade.…