2021 - Page 2 of 6 - Audit Beacon

October 22, 2021

Five Leadership Lessons Colin Powell Taught Me

Like much of the world, I was deeply saddened by the recent death of former United States Secretary of State Colin Powell. He was a man of immense character, whose legacy of public service leaves us all indebted. It was a testament to his unwavering courage and integrity that a bi-partisan wave of public sentiment accompanied the sad news of his passing.

As I reflect on General Powell’s life, I can’t help but recall my personal connection with him early on in my career. To me, he was more than a public figure. He was my boss and a mentor who taught me important lessons in leadership.…

October 11, 2021

One Company – Two Chief Audit Executives: Twice as Effective or Double Trouble?

A recent headline from Reuters caught my eye: “Scandal-hit Credit Suisse names new interim heads of internal audit – memo.” According to Reuters:

“Credit Suisse (CSGN.S) has appointed company veterans Nitesh Patel and Roger Senteler as interim co-heads of group internal audit, Switzerland’s second-biggest bank told employees as it tries to recover from grave risk-management lapses.”

I don’t know either of these gentlemen, and certainly have no reason to question whether the arrangement will work out – especially on an interim basis. However, the more I thought about the development, the more I asked myself: Can a company have two chief audit executives at the same time?…

September 30, 2021

For Internal Audit Credibility Must be Rooted in Objectivity

In an effort to raise awareness about objectivity, I often pose a series of questions to internal auditors. Have you ever been called upon to direct or conduct an audit in a department where a friend or relative works? Have you ever participated in an internal audit of a program, function, or business unit in which you worked at one time?

How about an audit of a finance function that aligns under the same CFO as internal audit? Have you ever audited the expense reports of the CEO? Have you been called upon to provide assurance related to the executive compensation program than not only determines your bosses pay, but yours as well?…

September 21, 2021

“Risk in Focus” – New Report Focuses on Internal Audit Priorities in 2022 and Beyond

We are approaching the time of year again when many internal audit departments around the world initiate their audit planning process for the upcoming calendar year. While I strongly advocate a continuous methodology for assessing risks and a dynamic audit plan that is continuously refreshed, I would be the first to acknowledge that undertaking an annual risk assessment that fosters an initial calendar year audit plan is still the most common approach. For that reason, now is the time when CAEs and their teams are rolling up their sleeves to initiate the process.

This is also the time of year when the first clues begin to emerge about where CAEs see risks and internal audit’s focus for the year ahead.…

September 16, 2021

Why Is Internal Audit Still Assessing Risks Like It’s 1999?

For years I have been writing about the need for internal audit to modernize its approach to risk assessment. I authored a blog in 2018 calling on internal auditors to come down from hilltops where our ancestors stood to assess weather risks, and deploy technology and other means to assess future or emerging risks much like meteorologists do to forecast weather risks. In a more recent blog, I shared the results of a poll that indicates that internal auditors believe the #1 strategic risk facing the profession is that we will keep “missing emerging risks.” So, I thought it was timely to share my thoughts on this topic again.…

September 7, 2021

Great Internal Auditors Can “Read the Room” (even online)

It didn’t take long for me as a young internal auditor to realize how important it was that meetings with clients go well. Actually, we called them “auditees” back then. There were typically two critical meetings in our internal audit engagement process: the entrance conference and the exit conference. The entrance conference set the tone for the engagement, and it was very important that we put the clients at ease and inspire confidence and trust. The exit conference was even more important. If we didn’t deliver the right message about the results of the audit with the right tone, we would likely meet resistance and wouldn’t inspire enthusiasm on the part of the client to implement needed corrective actions.…

August 29, 2021

“When Management Goes Rogue” – How Should Internal Audit Respond?

When it comes to corporate governance, I believe there is one enduring lesson from the past two decades: When boards of directors fail in their oversight responsibility of risk management, the results can be disastrous.

Managing risks for an organization is a complex and often dynamic undertaking that requires strong coordination among the board, management, the chief risk officer and the internal audit function. Identifying and mitigating risks through a sound risk-based internal audit process benefits all organizations, from mom-and-pop businesses to Fortune 500 corporations.

Failure to do so invites almost guaranteed problems at some level of the organization. It also can present a profound dilemma for the organization’s internal auditors who serve both management and the board.…

August 24, 2021

Four Strategic Risks Internal Audit Faces in the Decade Ahead

Last January, I shared perspectives about a recently released World Economic Forum Report on “The Future of Jobs.” In my blog, I shared that a magazine article from the International Monetary Fund had synthesized the WEF’s report’s findings in a way that shed some light on what the future might look like for internal audit. As I observed at the time:

“Unfortunately, it’s not the kind of news we want to hear. The article, by Saadia Zahidi, a co-author of the WEF report, is titled “The Jobs of Tomorrow.” Zahidi shares four compelling predictions:

The workforce is automating faster than expected, displacing 85 million jobs in the next five years.

…

August 16, 2021

5 Frequent Sources of Tension Between Management and Internal Audit

In the past year, management and internal audit have stood together in the vast majority of organizations in the face of the unprecedented risks presented by the Covid-19 pandemic. Ideally this alliance will prevail in corporate and public organizations around the world, and it likely will most of the time. Despite being allies, management and internal audit do not always see eye to eye. Disagreements may be easily resolved by simply rewording an audit report, or they may be serious enough to impair internal audit’s ability to carry out its mission.

During my years in the profession I navigated countless disputes with management.…

August 8, 2021

Workpaper Retention Presents Internal Audit With Its Own Compliance Risks

I am often surprised by the engagement my social media posts generate by internal auditors around the world. Ours is a profession where benchmarking and networking are an important path to enhancement of our internal audit functions. So, when a colleague asked me to post a LinkedIn poll to gauge internal audit workpaper retention practices, I naturally agreed. I anticipated it would generate some interest and comments, but I was not expecting the response I received. The poll was viewed more than 25,000 times, and generated more than 2,200 votes. In addition, it generated more than 85 thoughtful comments and responses from practitioners around the world.…