November 2016

November 28, 2016

Can Companies Act Immorally?

A recent Financial Times column asked an intriguing question: Can moral companies do immoral things? The writer cited two U.K. studies that examined, in part, how people rate their morality and how they rate that morality against others. The consistent finding in both studies was that individuals — even convicted prisoners in one study — tend to rate themselves morally superior.

The writer then made the case that this natural tendency for viewing ourselves as morally superior might help explain why moral companies do immoral things. I believe this kind of thinking, while making for interesting navel gazing, is dangerous.

We cannot afford to fall into the trap of assigning human characteristics to nonhuman subjects when it comes to how we act in business.…

November 21, 2016

Talent Management Is Critical to Internal Audit’s Success

​​The IIA recently released Global Perspective and Insights — a whitepaper that includes some sobering information regarding how the internal audit profession is addressing emerging risks globally. The paper is based on a survey of more than 2,200 internal auditors in more than 100 countries and territories around the world. The good news is that internal auditors recognize the degree to which culture, cybersecurity, and big data present risks in their organizations. Yet, the percentage of respondents who had not undertaken any internal audit work in each of those three areas was startling: 62 percent had not audited culture, 25 percent had not audited cybersecurity, and 26 percent had not audited big data.…

November 14, 2016

Corporate Mergers: Internal Audit’s Role in “Happily Ever After”

The challenges associated with mergers and acquisitions are myriad. Yet every year, hundreds of companies across the globe conclude the potential upsides of combining two successful organizations are worth the risks.

A number of technology companies currently are grabbing the merger spotlight — AT&T and Time Warner, Level 3 Communications and CenturyLink, and Yahoo! and Verizon. I find that corporate mergers such as these are like celebrity weddings — splashy, highly orchestrated, and sometimes doomed to failure before the participants reach the altar.

Mergers and acquisitions are notoriously difficult and often fail to live up to the hype. Yet, the lure of creating something greater than the sum of its parts often overshadows the risks and pitfalls.…

November 4, 2016

Presidential Election Outcome Not Likely to Lessen Risk Uncertainty

The 2016 U.S. presidential campaign will go down as one of the most volatile and strident in the nation’s 240-year history. Despite more than a year of bruising primary races, extravagant party conventions, three nationally televised debates, October surprises, and poll, poll, polls, many political pundits say the race for the White House still could go either way.

Whatever the outcome, you can be assured global economic forces will react strongly, and that reaction will be based on the one thing that drives markets crazy — uncertainty.

Internal auditors should be contemplating the risk effects on their organizations created by this uncertainty, both on the macro-economic level and closer to home.…