2022 - Page 4 of 6 - Audit Beacon

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.…

May 31, 2022

NEW ACFE FRAUD REPORT IS AN EXCELLENT RESOURCE FOR INTERNAL AUDITORS

I have been a proud member of The Association of Certified Fraud Examiners (ACFE) for more than 25-years. The organization is known and respected around the world, and its namesake credential The CFE is the gold standard for internal auditors, fraud investigators and others who want to demonstrate their proficiency in fraud detection and prevention.

ACFE also publishes its renowned “Occupational Fraud: Report to the Nations.” The 2022 edition was just published, and it is chock full of valuable information and insights for internal auditors and others. This year’s report is the 12^th edition, and as ACFE CEO Bruce Dorris noted in the foreword, this year’s report “is unique in that it explores frauds that were investigated largely during a global pandemic – a time when anti-fraud professionals, like so many others, were challenged to find new, innovative ways to conduct much of their work.”…

May 23, 2022

INTERNAL AUDITORS MUST BE CREDIBLE BEFORE THEY CAN BE INCREDIBLE!

As a young internal auditor, nothing was more frustrating to me than presenting a great internal audit recommendation or new idea to an audit client (or “auditee” as we called them back then), only to be met with waves of skepticism and negativity. I knew my message was important, but at times it was challenging to overcome the mistrust and fear that materialized by the mere fact that the recommendation came from an internal auditor.

Looking back on those early internal audits, I now realize that some of those communications breakdowns could have been avoided. The realization came slowly to me: I didn’t completely understand why I sometimes had difficulty in “selling” recommendations until a particularly frustrating exit meeting.…

May 16, 2022

THE STAGGERING TOLL OF COVID RELIEF FRAUD: WHERE WERE THE THREE LINES?

At the peak of the COVID-19 pandemic, governments around the world were working feverishly to appropriate relief funds to mitigate the pain and suffering of their citizens. At the same time, fraudsters were working feverishly to steal as much of the relief money as they could get their hands on.

The results were stunning. Governments around the world fell victim to theft including the UK, South Africa, Australia, and Germany. But COVID fraud in the U.S dwarfed the rest of the world combined with estimated theft of relief funds exceeding $200 billion.

In a recent article on COVID relief fraud, CNBC said:

They came into their riches by participating in what experts say is the theft of as much as $80 billion — or about 10 percent — of the $800 billion handed out in a Covid relief plan known as the Paycheck Protection Program, or PPP.…

May 9, 2022

Are Boards’ Heads in the Sand When CAEs are Hired or Fired?

Independence and objectivity are hallmarks of great internal audit functions and the professional men and women who lead them. Against this backdrop, the prevailing model for the profession mandates the establishment of separate functional and administrative reporting lines that foster that independence and impartiality.

Over the years, I have observed that chief audit executives (CAEs) are less likely to be unduly influenced by management when they have a strong functional reporting relationship to the board or audit committee. Without such a relationship, it is very easy for management to restrict the scope of internal audit’s work and to suppress any unfavorable results.…

May 5, 2022

Creating Awareness About Internal Audit Must Happen Year-Round

It is May again, and as many internal auditors know, that means International Internal Audit Awareness Month is upon us. The IIA, along with its affiliated institutes and partners and sponsors around the world are vigorously promoting the value that internal audit brings to fostering stronger internal risk management, internal controls, and corporate governance. Awareness month has long provided an opportunity for practitioners to plan events, gather proclamations, and do other outreach. There is no doubt this positive and coordinated effort helps to build awareness and appreciation of the profession.

A I have long expressed; however, I fear that much more needs to be done to build and sustain an enduring awareness of the profession’s value.…

May 2, 2022

Internal Auditors: When It Comes to Your Career, Write Your Own Story!

Back before the pandemic, I had the opportunity to address a graduate internal audit class at my alma mater, Georgia State University (GSU). My message to the students 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.”

Not long after that, COVID-19 turned the world upside down. We were locked down, quarantined and working from home. For me, isolation from the workplace and my typically intense travel schedule enabled me to reflect on the very advice I had been giving to others.…

April 25, 2022

Five Characteristics of Impactful Internal Audit Departments

An evergreen challenge for internal auditors is how to make a real impact. Gone are the days when we could simply be value protectors who patrolled the organization looking for fraud, waste, and mismanagement. To make a true impact in 2022, we must also be change agents who are catalysis for transformational ideas that help create value for the organizations we serve.

If you occasionally have doubts about the impact of internal audit in your organization, you are not alone. A Deloitte survey not long ago found a staggering 60 percent of chief audit executives (CAEs) believed the internal audit function did not have a strong impact and influence within their organization.…

April 18, 2022

5 Questions the Audit Committee Should Ask Internal Audit – But Doesn’t

No relationship for a chief audit executive (CAE) has been transformed more over the past 20 years than that with the audit committee. According to The IIA’s 2022 North American Pulse of Internal Audit, 90 percent of internal audit departments in North America report functionally to the audit committee. And in publicly traded companies, that number is 95 percent. In many companies, the audit committee holds an executive session with the CAE at every meeting. A lot of questions are asked of internal audit in these meetings, but there are also many unasked questions that should be.

I have long asserted that the audit committee’s success is tied to the effectiveness of internal audit. For…