2023 - Page 2 of 5 - Audit Beacon

September 28, 2023

The Strange Case of the ‘Disappearing’ Internal Audit Department

Over the years, I have weighed in often on behalf of municipal/local government internal auditors who have been victims of the wrath of bureaucrats or politicians. I’ve long asserted that auditing in government requires navigating the “theater of politics.” Sadly, the stage at the local level tends to specialize in melodrama. I have called out retaliation against government auditors in Florida, Texas, Arizona and Tennessee, to name a few. The latest city where oversight has gone to die appears to be Jackson, Miss. (population 150,000).

Capturing my attention was a strange news report with the headline, “Jackson’s Internal Audit Division Disbanded.”…

September 20, 2023

New PwC Report Offers Insights and Optimism for Internal Audit’s Future

There have been plenty of regional and country-level reports on internal audit in recent years, but the well has been pretty dry when it comes to global perspectives. It looks like that’s about to change, starting with the “PwC Global Internal Audit Study 2023: Seeing Through Walls to Find New Horizons.”

As a PwC alum, I may be a little biased about the quality of its internal audit thought leadership. But I have found that PwC typically takes a more strategic view. And its latest report, once again, hits the mark when assessing the state of internal audit and the potential for the profession going forward.…

September 14, 2023

A “PESTLE” Analysis: 6 Steps For Identifying Emerging Risks

In a recent blog for AuditBoard, I observed that the world has seemingly entered “a state of persistent crisis, with no sense of how we’ll escape.” Some call it a “permacrisis,” an “extended period of instability and insecurity.” For internal auditors and risk managers, a permacrisis means we can no longer simply assess and monitor the clear-and-present risks facing our organizations. We must constantly scan the horizon for risks that seem to emerge out of thin air.

Such emerging risks are potential threats or challenges that may be evolving or are apparent but not yet fully materialized or widely recognized. They have the potential to impact businesses, industries, governments, and society as a whole.…

September 12, 2023

For Clients, Drive-by Audits Feel Like a “Hit-and-Run”

During a recent lecture on internal audit’s enduring timeliness challenge, I was once again preaching of the dangers of audit engagements that take too long. A survey of participants disclosed that many took 60-90 days to finish a typical engagement. Most agreed that lengthy audits yield less value than those where the results can be delivered quickly.

But one seminar participant shared a different view. He was quick to point out that assurance engagements conducted too quickly are also fraught with danger – especially if the auditors don’t focus on the real risks. I agreed and have written about the dangers of what I call “drive-by audits” in the past.…

September 7, 2023

Are Internal Auditors as Efficient as They Expect Others to Be?

Like many chief audit executives, when I was leading an internal audit function, I periodically found my company facing financial pressures. Inevitably, management and/or the board would ask the question “can internal audit’s resources be reduced as part of corporate cost cutting?” Whenever that happened, I used the occasion as a call to action to do two things: (1) redouble my efforts to communicate the value we bring to the organization, and (2) examine the efficiency and effectiveness of the internal audit operation itself.

The second initiative was important, because if reductions in resources were to be levied, I needed to mitigate the impact on the value we delivered by ensuring we were as efficient as we would expect to find other operating units in the organization.…

August 28, 2023

Business Acumen: The Differentiator for Internal Auditors

“I just wish the internal auditors understood the business better!” I can’t count the number of times I have heard this lament from company executives during my years in the profession. While they may have been speaking about their specific business, they were often alluding to what they viewed as a lack of strong business acumen in general. While I believe a great many internal auditors do bring sound business acumen to their roles, we can all be better.

When I set out to write my fourth book, Agents of Change: Internal Auditors in an Era of Disruption, I asked chief audit executives around the world to identify the traits that internal audit change agents share in common.…

August 21, 2023

Gaslighting the Internal Auditors Should Never Succeed

The term “gaslighting” has enjoyed a resurgence in popularity in recent years. Its origins date back to a British play later made into a film during the 1930s. Titled “Gas Light,” the plot revolved around a husband’s psychological and emotional manipulation of his spouse, leading her to question her sanity. The manipulation involves his deliberate alteration of a gas lamp’s brightness within their residence.

In its modern-day use, gaslighting is a manipulative tactic in which one person tries to control another by making them doubt their own perceptions, memory or even sanity. It usually involves denying or distorting reality, causing the victim to question their beliefs and feel confused or uncertain.…

August 14, 2023

Sky-high CEO Pay Can Create Significant Risks

There has been a surge in news regarding CEO compensation. Always a topic of intense interest, CEO pay can become especially contentious during periods of economic slowdown or for companies/industries under unique stress. Sometimes, CEOs attract scrutiny upon themselves: The chief executive of an American media giant, criticizing pay demands by striking writers and actors, drew intense backlash when it was revealed that his annual pay tops $27 million.

Questions about CEO compensation are not limited to specific companies or industries. A recent report noted that the median pay of CEOs at S&P 500 companies was about $14.5 million in 2022.…

August 7, 2023

Four Key Risks Dominate the Outlook for the Remainder of 2023

I am often asked for the most common advice I offer to internal auditors seeking to deliver greater value for their organizations. I offer 3 simple words in response: “follow the risks!”

Before we can follow the risks, however, we must be risk aware. In the era of permacrisis, maintaining risk awareness is becoming ever more critical. For that reason, I am always on the lookout for predictions or forecasts of emerging risks or those that lie ahead. So, when the World Economic Forum (WEF) issued it recent Chief Risk Officers’ Outlook, it immediately caught my attention. The WEF report is based on surveys and interviews with chief risk officers (CROs) from leading public and private sector organizations from around the world.…

August 2, 2023

Professional Resilience Means Never Being Defined by Our Failures

My blogs normally focus on topics of direct interest to internal auditors. However, I often receive notes from readers outside the profession who can relate to the messages I share. The fact is, we all share common experiences – particularly when it comes to our careers. Regardless of the profession you are pursuing, there will be highs and lows. In my own career, I experienced periods of extraordinary success, often followed by a disappointment or two.

We’ve all been there. We thought we were the leading candidate for an executive assignment with a high-profile company, only to learn that the selection panel went in a different direction.…