June 2017

In a recent blog, I explored some of the sources of tension between internal audit and management. One member of the management team with whom internal audit has a particularly interdependent relationship is the chief legal officer (general counsel). I explored internal audit’s relationship with the general counsel in a May 2015 blog. In another of my summer rerun series, I thought it was timely to share the blog again.

When I first became a CAE, it didn’t take me long to realize that the relationship with my organization’s general counsel was going to be complex. I quickly found him to be a great resource as he and his team were ready and willing to help my staff with important legal advice during ongoing audits.…

In an ideal world, management and internal audit stand together in a common pursuit to strengthen their organization’s risk management, internal controls, and governance processes. For the most part, this alliance prevails in corporate and public organizations around the world. Despite being allies, management and internal audit do not always see eye to eye. Disagreements may be easily resolved as simple wording in an audit report, or they may be serious enough to impair internal audit’s ability to carry out its mission.

Over my internal audit career, I navigated countless disputes with management. And, as an IIA leader, I am frequently approached by chief audit executives (CAEs), or members of their staff, who say they are at an impasse with management on a contentious issue.…

American business icons General Motors Corp. (GM) and Ford Motor Co. recently have traveled divergent roads. While GM has seen a resurgence in the past three years, Ford’s weak stock performance of late led to a shake-up in May resulting in the ouster of its CEO. While volatility in the fortunes of automakers has become almost routine, internal auditors can learn valuable lessons from GM’s improving fortunes and the messages coming from Ford’s new leadership.

GM CEO Mary Barra has been credited with transforming the company through her innovative thinking and her commitment to leading a culture change. Less than 10 years from bankruptcy and bailouts, GM has seen a number of highly profitable quarters.…

It is a truism among internal auditors that explaining what we do as a profession often leaves the uninformed confused. So, it was a pleasant surprise for me when I recently explained the fundamentals of internal auditing to a doctor who immediately grasped its value to the organization.

“You guys are the thunder before the storm,” he observed.

A nice turn of phrase that cleverly surmises what internal auditors do. But the more I thought about it, the more I became convinced that the phrase is just a good starting point.

Indeed, internal audit findings that point to ineffective risk management, defective design or implementation of controls, or other problems that increase risk can provide an appropriate rumble of warning to stakeholders.…