With the end of the year it’s time to look back at the headlines that should have attracted internal auditors’ close attention. Like recent years, 2018 saw a number of big stories about high-profile corporate scandals. Several may have sown the seeds for the next wave of regulations that could impact the work of internal audit.
Risk Management Chickens Came Home to Roost in 2018
Fines and regulatory settlements of past scandals made for many more headlines in 2018 involving Equifax, Wells Fargo, and Volkswagen. They also provided important lessons about risk management.
The settlement of a class action suit brought against Equifax by eight American states signaled what I described in a July blog post as “a bold statement about the importance of internal audit.”…
“We are here to help you!” This phrase is often uttered at the opening meeting of a new internal audit engagement. The words seem so innocent, but in a 2012 blog post, I first explored the challenge for internal auditors to make those words more than a hollow promise. The phrase is often referred to in jest as “the oldest lie in the world.” As the old joke continues, the second oldest lie is management’s response: “We are glad you are here!” Unfortunately, as with many jokes, there is just enough truth in the punchline to make for some discomfort.
The great majority of internal audit professionals are truly collegial in their relationships with clients, and hopefully most of our clients really are glad to see us.…
End-of-year stories and blog posts can serve an important purpose: They allow us the opportunity to reflect on the past 12 months and put issues into perspective. Last year, I introduced my own end-of-year review by identifying my most-viewed blog posts of 2017 and speculating on what that reflected about internal auditors.
This year’s most-read list offers a similar look back. Before I reflect on the most popular subjects of 2018, however, I should note how much interest in my blog on internal audit has increased overall. Through November, “Chambers on the Profession” blog posts were viewed more than 215,000 times — more than double the number recorded in 2017.…
If you occasionally have doubts about the impact of internal audit on your organization, you are not alone. According to Deloitte’s 2018 Global Chief Audit Executive Survey, a staggering 60 percent of chief audit executives (CAEs) believe the internal audit function does not have a strong impact and influence within their organization. And, while that’s obviously bad news for internal auditors, it was actually an improvement from 72 percent in Deloitte’s 2016 survey.
Internal audit’s impact and influence are strengthening at many organizations, but obviously there is still a lot of room for improvement. When I saw the survey results, I posted a question on LinkedIn asking whose fault was it if internal audit did not exert a strong influence on the organization.…
Good governance is part art, part science, and probably a bit of luck and magic. But the payoff when it is achieved is an organization that consistently achieves goals, serves stakeholder interests, supports long-term value creation, and nurtures a healthy culture.
The problem is that there can be no one-size-fits-all approach. Each organization faces unique risks, challenges, and opportunities that add variability to the struggle. But the importance of finding the right combination of rules, practices, controls, structures, and processes that support good governance is worth the effort. Not surprisingly, many tools and models have been developed over the years to explain or promote best practices that position organizations to succeed.…