2019 - Page 4 of 6 - Audit Beacon

June 10, 2019

Why Tone Is So Important for Internal Auditors

As part of unofficial “Internal Audit Self-awareness Month,” I am featuring blog posts from the past that focus on looking inward. This theme is just as vital as any effort to build awareness about our profession. We must take a realistic and hard look at what we do, how we do it, and how we are viewed by those outside of the internal audit function. This week, I’m featuring a previous post on the tone we use when communicating.

You’ve heard: “It’s not what you say, it’s how you say it.” Well, in internal auditing, I’d say it’s a combination of both.…

June 3, 2019

What Do They Think When the Internal Auditors Are Coming?

As we wrap up International Internal Audit Awareness Month, my plan is to flip the coin for June. Just as our profession focused outward over the past month to put on display the talent and value we bring to our organizations, I believe that June should be a month for introspection — what I will unofficially call “Internal Audit Self-awareness Month.” My blog posts this month will revisit previous posts from this series that will help us look inward.

This theme is just as vital as any effort to build awareness about our profession. We must take a realistic and hard look at what we do, how we do it, and how we are viewed by those outside of the internal audit function.…

May 26, 2019

The 5 Cs That Should Be Keeping Boards (and Auditors) Awake at Night

I traveled to South Africa earlier this month to speak at an Institute of Directors (IOD) event in Johannesburg. In addition to interacting with seasoned corporate governance leaders from this important country, I was lucky enough to learn a bit more about the long history of diamond mining in South Africa.

The Eureka Diamond, the first diamond found in South Africa in 1867, created a massive disruption in the diamond trade. Its discovery along the Orange River — its pre-cut weight was an impressive 21.25 carats — revolutionized the industry. Within 10 years of the diamond’s discovery, South Africa became the center of the industry and global diamond production increased tenfold.…

May 20, 2019

Did the “Watchdog” Bark Too Much in Glendale, Ariz.?

One of the highlights from each year’s International Internal Audit Awareness Month is the numerous public proclamations promoting the profession. They typically praise internal auditing’s role in enhancing public trust and promoting economy, effectiveness, and efficiency in government. In my mind, such proclamations acknowledge a fundamental truth: Internal audit boosts transparency and accountability in the public sector.

This is why I am particularly disappointed and frustrated when jurisdictions that have already recognized internal auditing’s value take a step backward. Such is the case for Glendale, Ariz., a city of about 250,000 people in the Phoenix metro area. City leaders there voted recently to eliminate its long-established internal auditor position and replace it with an outside contractor.…

May 12, 2019

To Be Good Leaders, Internal Auditors Must Also Follow

It is often said that great leaders also possess the capacity to follow. As I have gotten older, I have begun to fully appreciate how true that is. I find there are many fields and areas of expertise where I am totally lacking. For that reason, I find myself looking more and more to others for advice and insight. In short, I have come to realize that, to be an effective leader, I must also follow.

Internal auditors need to be seen as leaders within their organization. In my 2017 book, Trusted Advisors: Key Attributes of Outstanding Internal Auditors, I identified “inspirational leadership” as one of the attributes that great internal auditors share.…

May 6, 2019

Internal Audit Awareness Month: More Than Just Talking the Talk

I was thrilled to announce recently that The IIA surpassed 200,000 members. This momentous milestone couldn’t have come at a better time as we enter International Internal Audit Awareness Month, our annual, globally coordinated effort to raise awareness about our wonderful profession.

The IIA, along with its North American chapters and more than 100 affiliated institutes around the world, will be promoting the value that internal auditing brings to fostering stronger risk management, internal control, and corporate governance. Awareness month provides an opportunity for practitioners to plan events, gather proclamations, and do other outreach to elevate not just awareness, but also appreciation, for the vital assurance and advisory work we do.…

April 29, 2019

Willful Subversion of Second Line of Defense Can Land You in Jail

Among my earliest memories as an internal auditor was the constant refrain from officials in my organization that, as internal auditors, our job was to keep them “out of jail.” It was their light-hearted way of signaling how important we were to them. I didn’t take them too seriously, because I didn’t know of too many people who went to jail because of an internal control or compliance failure. But, as Bob Dylan so famously sang, “the times they are a-changin’!”

The recent guilty plea by a former drug company compliance officer on conspiracy and other charges is yet the latest example of when willful compliance failures can lead to jail time for executive management.…

April 22, 2019

The Fallacy of Follow-up Audits

During my early years in the profession as a young internal auditor, I was always proud of my reports, particularly the findings and recommendations. So, issuing a new audit report was cause for celebration. But nothing was more demoralizing than when I would invariably undertake the required follow-up audit only to discover that my carefully crafted recommendations or management action plans were never implemented. After all, management had agreed to the proposed corrective actions (or had proposed their own corrective actions) to rectify problems identified in my audits. So, why did they fail so often to follow through?

There were always plenty of excuses from management when the follow-up audits disclosed that “problems had not been corrected”:

“We underestimated the complexity of the action we agreed to take.”

…

April 15, 2019

Internal Audit’s Technology Challenge Is No Easy Road

I often refer to the end of the first quarter as “whitepaper season” for the internal audit profession. Typically starting in late February and into March, several key players in the profession publish reports that offer a glimpse into how we’re doing.

Two recently released reports should raise serious concerns about internal audit’s slow progress in adopting and adapting technology to execute its responsibilities: Protiviti’s Internal Audit Capabilities and Needs survey, Embracing the Next Generation of Internal Auditing; and PwC’s State of the Internal Audit Profession report, Elevating Internal Audit’s Role: The Digitally Fit Function.

Protiviti’s report indicates that three out of four internal audit groups are undertaking some form of innovation or transformation, but most are only beginning that journey.…

April 8, 2019

Facebook Data Exposure Offers Critical Lesson for Internal Auditors

Facebook, once the social media darling that could do no wrong in the eyes of users and investors, was hit with another setback recently. Researchers at a cybersecurity firm discovered Facebook user information readily available on cloud computing servers run by Amazon.com.

The revelation comes about a year after Facebook was pilloried for the Cambridge Analytica scandal, where an app developer shared data on millions of Facebook users with a political consulting firm. Despite assurances from Facebook CEO Mark Zuckerberg that the company would do more to protect user data, lapses such as the one involving Amazon continue to come to light.…