March 2018

This year, I am admonishing internal auditors to focus on the future, as the profession responds to rapidly changing stakeholder expectations. Disruptive technology and an increasingly dynamic risk landscape are driving the profession toward transformation, and we must take bold steps to ensure we successfully pivot to new demands.

Recruiting and retaining staff is one of the toughest challenges we face in achieving this transformation.

The IIA’s 2018 North American Pulse of Internal Audit​ and the 2018 Global Risk Report each cite survey data that reflect the growing struggle for talent. Seventy-two percent of chief audit executives (CAEs) report they have talent gaps to fill to carry out their audit plans, according to the Pulse.…

The issue of the rotational chief audit executive (CAE) model is one I’ve addressed in the past. In fact, the second blog post I ever wrote — more than nine years ago — was on this topic. My view is pretty clear that the practice, while widespread, has some inherent pitfalls. If not handled well, it can lead to problems, including real and perceived objectivity impairments for not only the CAE but the entire internal audit department.

My apprehension about this practice has grown proportionally to growth in the demands that stakeholders are placing on the profession. Internal audit is at the cusp of transformational change as technology and an expanding scope of work require that it become more agile and innovative.…

We are living in transformative times. Technology is accelerating the pace of change to breakneck speeds, demanding that we adapt, adopt, and accept change as a way of life. This brave new world requires organizations, institutions, and individuals to become adept at reinventing themselves.

For internal audit, this dynamic reality is adding complexity and urgency to our work. Change causes disruption, and the organizations we serve work best when disruption is minimized. Invariably, internal audit will be asked to do more, requiring us to pivot to stakeholder demands as we have done before. However, the pressures driving change and disruption today cannot be eased by simply relying on what we’ve done in the past.…

In its own words, fast-food giant KFC had “a hell of a week” as it scrambled recently to manage a supply-chain disruption that left most of its 900 franchise stores in the United Kingdom with no chicken. 

KFC blamed the disruption on “a couple of teething problems” with its new U.K. delivery partner, DHL, which explained that numerous deliveries had been incomplete or delayed because of unspecified operational issues.

It is interesting that, in the 21st century, when critical risks are assumed to be strategic or cyber-related, a good old-fashioned risk like supply chain could wreak such havoc. The incident offers a couple of informative lessons for internal audit in supply chain and crisis management.…