2019 - Page 5 of 6 - Audit Beacon

April 1, 2019

Every “Where Was Internal Audit” Moment Presents an Opportunity

One of the constant challenges for internal audit is to overcome being the unwelcome guest at the party. So, it is not a common occurrence when internal audit is actually invited. I bring this up in the context of the recent college admissions scandal in the United States.

In the wake of this shocking breech of admissions processes and controls, there is a growing chorus of voices saying that, based on the risks that are obviously present, it’s time to include the admissions process at colleges and universities in internal audit plans. The profession should eagerly accept the invitation to step up and show the value of independent assurance.…

March 24, 2019

10 Emojis That Sum Up An Internal Auditor’s Life

Last week, The IIA successfully hosted its annual Global Council where delegates from more than 80 countries assembled in Japan. While there, I learned that emojis originated in Japan. In fact, the word “emoji” comes from the Japanese for “picture” e+ “character” moji. As one who uses emojis with increasing frequency, I have been thinking light-heartedly about how our profession might use them.

Granted, internal auditors are a serious bunch. The work we do is steeped in integrity, honesty, and independence. In the view of many — both inside and outside the profession — internal audit often serves as the conscience of the organization.…

March 11, 2019

The Journey for Internal Audit Holds Valuable Lessons

We kick off the 2019 General Audit Management (GAM) conference today in Dallas-Fort Worth with more than 1,200 in attendance either in person or through our new livestream offering. As always, the event is packed with informative sessions on issues and trends crucial to internal audit executives. In fact, the first general session this morning (at 9:15 a.m. Central Time) will be an in-depth conversation I am having with U.S. Securities and Exchange Commissioner Hester Peirce. GAM is also where the Internal Audit Foundation will officially unveil my latest book, The Speed of Risk. It’s an update to my first book, Lessons Learned on the Audit Trail, published in 2014.…

March 4, 2019

A Preview of the 2019 Pulse of Internal Audit Report

For nearly five years, I have been urging practitioners to “audit at the speed of risk.” I first used the phrase in a July 2014 blog post that addressed the growing volatility of risk and how sticking to a traditional annual audit plan could leave audit functions addressing yesterday’s challenges.

We’ve made progress since then, but there is a long way to go.

Internal audit’s role in providing timely assurance on the effectiveness of risk management is more important than ever, as previously unknown risks quickly emerge and grow while thorny, known risks persist. That’s why it is essential for internal audit to be aligned with management and the board’s views on risks.…

February 25, 2019

It’s Your Career: Write Your Own Story

I recently had the opportunity to address a graduate internal audit class at my alma mater – Georgia State University (GSU). My message that night was a very simple one: “As you make important decisions about the path you will follow in your career, you need to write your own story.”

Today, many accounting students obsess over the need to land internships with public accounting firms, so that they will have a clear path to joining such a firm once they receive their accounting degree. They believe that this path, which will enable them toward becoming certified public accountants (CPAs), is their only real option.…

February 18, 2019

Internal Auditors: What Is It You Do?

Anyone who spends time with internal auditors will quickly learn there is a quiet passion that drives many of the best practitioners. It is built on genuine desire to help our organizations, the well-earned respect from those we interact with, and unwavering pride in the service we provide as internal auditors.

Yet, as a profession, we often struggle to explain what it is we do. This challenge is so commonplace, we’ve learned to joke about it. One of my favorites is about the man who instructs his child to tell his classmates that he works at McDonald’s, because it’s easier than explaining he’s an internal auditor.…

February 11, 2019

5 Ways Internal Audit Can Fail to Adequately Serve Its Organization

There are a multitude of pressures on modern internal audit departments. Expectations are high, resources are limited, and risks are emerging at unprecedented speed. Many chief audit executives have their internal audit teams poised to address these challenges. Yet sadly, poor or misguided choices by chief audit executives (CAEs) can lead to internal audit falling short.

Occasionally, well-meaning CAEs and their internal audit departments fail to adequately protect their organizations. Sometimes it’s unavoidable. Even the most diligent internal audit team can potentially overlook a critical issue or fail to recognize its significance. But too often when we fail to protect our organizations, it’s not an oversight; it’s the result of a deliberate decision.…

February 4, 2019

Wells Fargo Further Empowers Internal Audit

I have often quoted Danish philosopher Soren Kierkegaard regarding what motivates change. He wrote, “All change is preceded by crisis.” American economist and Nobel laureate Milton Friedman made a similar observation when he said, “Only crisis, actual or perceived, produces real change.”

In this context, I was heartened to see Wells Fargo & Co.’s announcement of changes to its governance practices in response to several crises involving its consumer lending division. I won’t dwell on the details of the mega-bank’s missteps or the resulting regulatory fines. Suffice it to say the scandals that engulfed the world’s second-largest bank (by market capitalization) shook it to its core.…

January 28, 2019

Being the Bearer of Bad News Is Never Easy for Internal Audit

Every profession has its ups and downs, and internal audit is certainly no exception. In fact, some of the most awkward and, yes, even painful moments can occur when we need to deliver bad news to good people. And, if these moments are difficult for internal auditors, rest assured they are even more distressing for our clients.

Like it or not, there are times when, based on our audit results, we have to tell clients things they don’t want to hear. It’s never easy, for example, to tell someone that the audit results were “unsatisfactory.” It’s even harder to tell a colleague that you found a major fraud in their division, especially one that involved once-trusted employees or that had devastating financial consequences.…

January 20, 2019

The Challenges to Internal Audit in a Zettabyte World

The long-promised next generation of mobile connectivity, known as 5G, will soon be reality, with some experts predicting a quantum leap in the technology in as little as two years. Hans Vestberg, CEO of Verizon Communications, put the impact of 5G on the world in perspective when he spoke recently at the 2019 CES conference in Las Vegas. “5G will change everything,” he said.

The next generation of mobile technology will go a long way toward delivering on the promise of a fourth industrial revolution. The first industrial revolution was driven by steam and mechanization, the second by electricity, and the third by digitalization and computers.…