2019 - Page 2 of 6 - Audit Beacon

October 15, 2019

Groundbreaking IIA Report Could Reshape Views on Risk Management

Against a backdrop of numerous high-profile corporate scandals, boards of directors around the world are facing increasing pressure to perform. Activist investors, changes in technology, and increasingly aggressive regulations are bearing down on corporate leaders like never before, and the dynamics of macroeconomics and geopolitics only add to their complex challenges.

The seemingly overwhelming task of operating a modern corporation can be greatly eased, however, by competent and creative executive management, strategic risk management, and independent assurance from internal audit. Yet, this tried-and-true formula for successful corporate governance often fails when the key players aren’t aligned or, worse yet, have conflicting agendas. …

October 7, 2019

Ready or Not — Here Come the 2020s

At my age, the dawn of a new decade should not be that big of a deal. After all, the middle of the coming decade will mark 50 years since I shed my college graduation gown and went to work in internal auditing. Since that time, I have watched the calendar turn to a new decade four times. Each time, I tried to imagine what the coming decade would hold, and each time, events unfolded that no one could have foreseen. The OPEC oil embargo in the 1970s, the fall of the Soviet Union in the 1980s, the explosion of the Internet in the 1990s, the global financial crisis in the 2000s, and the explosion of social media in this decade all had profound impacts on the world in which we live and work.…

September 30, 2019

Internal Auditors Must Stand Tall — But Know When to Walk

Global headlines recently noted that the chief audit executive (CAE) of a major publicly traded company had resigned amid questions about the company’s CEO improperly executing a stock-linked compensation plan. There was a lot of speculation about the connection between these events, including whether the CAE quit on principle in the face of corporate pressure. I don’t know if that’s true, but the speculation alone stimulates conversation once again about how CAEs should respond in a toxic or tone-deaf culture.

I have tackled this topic several times in this blog, including a 2014 entry on the challenges for CAEs working in an environment where tone at the top is troubled.…

September 26, 2019

The Next Big Risk For Internal Audit is Just Around the Corner

Ours is a dynamic profession. Just as internal auditors move from one engagement to the next, the entire profession continually evolves to meet new challenges. A half-century ago, the vast majority of internal audits were financial. But in the 1970s and ‘80s, a new trend developed. Operational auditing became a hot topic at conferences and seminars. Thought leaders such as pioneer Larry Sawyer pointed out that internal audit can function as “the eyes and ears of management,” and audit executives throughout the world slashed borderline financial audits from their plans in favor of operational auditing.

By the beginning of the 21^st Century, internal audit functions had ventured beyond operational auditing to offer a wealth of new services.…

September 19, 2019

When It Comes to Internal Audit Principles — The Stand Must Be Complete

In my previous blog post, I explored half of The IIA’s Core Principles in relation to the recent release of a new Practice Guide, “Demonstrating the Core Principles for the Professional Practice of Internal Auditing.” However, when it comes to principles, we must be all in. So, in this blog, I will examine the remaining five principles.

It is important to repeat my sincere belief that demonstrating our adherence to the Core Principles is the path that will lead our profession into a successful future. The International Standards for the Professional Practice of Internal Auditing and other parts of the International Professional Practices Framework provide specific rules and direction to practitioners, but the Core Principles are the foundation on which our house is built.…

September 16, 2019

Internal Auditors Should Stand on Principles

“The intelligent have plans; the wise have principles.” —Raheel Farooq

The world of internal auditing in the 21stcentury can be exhilarating, rewarding, nerve-wracking, exciting, and downright terrifying at times. The challenges that organizations face today make providing independent assurance to enhance organizational value anything but dull.

In looking back over more than four decades in this profession, I couldn’t have imagined as a junior auditor at Trust Company of Georgia how radically the profession would change during my career. The junior auditor of today can leverage new technology to examine an enormous volume of data in minutes that once took days or weeks.…

September 9, 2019

6 Risk Management Lessons I Learned From Hurricane Dorian

n the following blog post, I examine what risk management lessons we can learn from the recent impact of Hurricane Dorian on the Bahamas and the U.S. East Coast. I cannot do so without acknowledging the significant destruction and loss of life the storm caused in the Bahamas. I encourage my readers to look for opportunities to support relief efforts for the islands. This article provides a list of legitimate relief organizations readers may wish to consider.

The Bahamas and U.S. East Coast were battered by Hurricane Dorian, bringing significant destruction and loss of life to some areas while sparing others.…

September 2, 2019

Why Social Accountability Must Be on Internal Audit’s Radar

Two significant developments in business took place at the end of August that could have profound and long-lasting impacts on how organizations operate. Internal auditors should take note.

First, the Business Roundtable, an association of leading U.S. CEOs, announced a fundamental change to its Statement on the Purpose of a Corporation. The statement, which is updated periodically, is the de facto marching orders for doing business in America and, for the past 20 years, has been pretty basic: Serve the shareholder.

The second development relates to lawsuits stemming from the ongoing opioid epidemic in the United States. Two major pharmaceutical companies face costly judgments and settlements for their role in the crisis.…

August 26, 2019

What Happens When Internal Audit Is Ignored? It Happens Too Often

TheNew York Times reported last week on what it called a “summer of crippling ransomware attacks” on Texas cities. Hackers are simultaneously holding hostage computer systems in 22 cities across the state and demanding millions of dollars. Most of the targets are small towns with limited resources and are least likely to update their cybersecurity systems or back up their data, according to the Times.

This is another reminder of the vulnerability of IT systems. Lean cybersecurity budgets in the public sector make those systems particularly susceptible to breaches. In light of these latest incidences, here is a blog post I published last year about a ransomware attack on Atlanta’s IT system.…

August 19, 2019

Should Internal Auditors Worry About Digital Spies in Our Midst?

During one of the lighter moments of a recent meeting at IIA Global Headquarters, the following joke was shared:

Wife to husband: “Why are you always whispering in the house?”
Husband: “Because I’m afraid the government is listening.”
Wife laughs. Husband laughs. Alexa laughs. Siri laughs.

I’m certain this joke is making the rounds, from boardrooms to bedrooms and across social media. But, as with many topics we joke about, the heart of the subject is not a laughing matter.

According to U.K.-based Juniper Research, there were 2.5 billion digital voice assistants, such as Alexa, Siri, and Google Assistant, in use as of the end of 2018.…