June 2022

June 30, 2022

Courageous Internal Auditors Don’t Wait For a Choir

This month marks the 20th anniversary of the internal audit at WorldCom that shined the light on a $3.8 billion financial reporting fraud. My recent article for AuditBoard revisited what I called “arguably the most consequential internal audit ever undertaken.” The audit not only contributed to the demise of WorldCom, but its results contributed in many ways to the swift US Senate passage of the Sarbanes Oxley Act barely three weeks later.

As I observed in my WorldCom article, the audit wasn’t just the work of technically outstanding internal audit professionals (which it certainly was). More importantly, it was the direct product of courageous leadership by WorldCom’s CAE, Cynthia Cooper.…

June 28, 2022

The First Half of 2022 Has Been Risk-Induced Bedlam

When a new year dawned almost 6 months ago, the world had every right to expect calmer seas ahead. After all, we had collectively lived through two years of COVID-induced disruption, the likes of which the world had not witnessed in decades. Instead of a calmer more predictable landscape, 2022 has thus far presented nothing short of risk-induced bedlam!

The word bedlam is defined as a “state of uproar and confusion,” and I cannot think of a more apt description of the first half of 2022. Consider for a moment all of the risks that have come to fruition thus far this year that weren’t widely anticipated:

  • The COVID Omicron Variant: As we closed the books on 2021, there was a sense of relief that the worst of COVID was behind.
June 22, 2022

Everybody Loves a Government Watchdog … Until It Barks

It’s not clear when the label of watchdog was first attached to government auditors, but it has become a frequently used term for these hard-working public servants over the decades.

In many jurisdictions around the world, a government auditor’s mission is to ferret out waste, abuse, and corruption in government, and there is generally glowing praise for these watchdogs. However, in far too many instances, when a government auditor has to report that there is inefficiency, ineffectiveness, fraud, waste, or mismanagement, suddenly not everyone is happy to have them around.

Indeed, the love affair with watchdogs at all levels of government, as well as their capable corporate counterparts, has not been without a few spats.…

June 13, 2022

IS A GENERATION GAP FUELING AN INTERNAL AUDIT TALENT CRISIS?

The “great resignation,” coupled with a surging global economy and resulting labor shortage, is frustrating HR and management leaders in virtually every industry and profession. Internal audit is no exception. In a recent LinkedIn poll, more than 50% of internal audit respondents signaled that their departments have been struggling to fill vacancies for more than three months. In fact, 30% have been recruiting vacant positions for more than 6 months. For positions requiring cyber or other technology skills, the challenge is even greater.

Over the past few months, I have been leading roundtable discussions with CAEs and other senior internal auditors around the world.…

June 6, 2022

5 STRATEGIES FOR MORE TIMELY INTERNAL AUDIT REPORTS

Lawrence Sawyer, one of the “fathers” of modern internal auditing once observed that, “Few sources of friction within the auditing department exceed that caused by the process of report writing. The most brilliant of analyses and the most productive of audit findings seem to be forgotten during the trauma of report writing.” From my experience truer words have never been written.

I learned early in my internal audit career how time-consuming and frustrating it could be to write an effective audit report. No matter how well I thought I had captured the results of the audit, the audit team leader would inevitably rewrite much of what I had written.…