April 2017

April 24, 2017

Investors Deserve Disclosure on Internal Audit

During a recent visit with U.S. Congressional leaders, I explored support for making disclosure of whether a company has an internal audit function a requirement for being publicly traded. I was heartened that most legislators I spoke with said they would consider such a step.

While this would seem to be a minor added condition for allowing a company to be listed on an exchange, in practice it would be a significant step in pulling back the curtain to reveal an organization’s commitment to good corporate governance — particularly risk management and internal controls.

Such a disclosure requirement would stop short of compelling companies to have an internal audit function, but it would deliver important information to prospective investors by providing a glimpse into the culture of the organization.…

April 17, 2017

United Airlines: A Lesson for Internal Auditors on the Risks of Social Media

The past several weeks will rank among the worst periods ever in which global companies inflicted damage on their brands with clumsy operational, marketing, public relations, and social media actions. Uber, Pepsi, Delta Airlines, and United Airlines have all felt the wrath of consumers, media, and investors as a result of perceived foolish mistakes from the operational front lines to the C-suite. If there are lessons to be drawn by internal auditors, perhaps the best case study is United Airlines.

The world has watched in fascination at the rapid deterioration of the airline’s brand after video of one of its passengers being forcefully removed from an overbooked flight went viral.…

April 10, 2017

Pillars of Good Governance: A Case For Internal Audit

Regular readers of this blog know that many of my posts focus on the changes and challenges facing internal auditing. Indeed, today’s dynamic business environment and growing stakeholder demands on the profession hold the potential to significantly impact its value and future.

This ongoing analysis has generated strong readership and equally strong responses, and not everyone agrees on whether the profession is responding with the urgency necessary to keep up with growing demands.

However, no matter which side of that fence you happen to be on, it should go without saying that every internal audit practitioner should be an advocate for a strong and vibrant profession.…

April 3, 2017

For Internal Audit: The Best Defense is a Strong Offense

There is significant disruption in the corporate sector that is impacting internal audit. From potential Trump-era deregulation to the emergence of complex new risks to conjecture about its loss of prestige, internal audit finds itself at the epicenter of issues that influence its scope of work, and could damage its reputation and brand.

In many ways, this is a particularly vulnerable time for the profession. As I wrote in last week’s blog post, there are those who seem all too ready to write off internal audit while others, who are perhaps threatened by the scrutiny that comes with strong and well-resourced internal audit functions, appear ready to act as roadblocks to its evolution.…