2023 - Page 4 of 5 - Audit Beacon

May 23, 2023

Heads Up Internal Auditors: Emerging AI Compliance Risks Are Genuine

For the past few years, there has been an ongoing debate about whether artificial intelligence (AI) will present risks or opportunities for the internal audit profession. I have taken the position that it will offer both.

If we engage primarily in hindsight and focus our energies on tactical audit engagements, such as assurance on internal controls over financial reporting, we run a significant risk of being disintermediated by AI. However, if we turn our attention on strategic/business risks and other engagements that require professional (human) judgement, we have the opportunity as an enabler to leverage AI, rather than to fear it.…

May 15, 2023

Forget What Happened in the Past: Internal Auditors Really Are Here to Help!

It’s Internal Audit Awareness Month, and a good time to revisit one of the age-old challenges for the profession: Why don’t people believe “we are here to help?”

“We are here to help you!” That phrase seems so innocent, but those six little words are sometimes referred to as “the biggest lie of the internal audit profession.” As the old joke continues, the second biggest lie is management’s response: “We are glad you are here!”

I often write blogs about how internal auditors should be helping their organizations navigate new or critical risks. Surveys continue to indicate that internal audit’s support is genuinely welcomed in many organizations.…

May 8, 2023

Did Banking Regulators Just Throw Internal Audit Under the Bus?

When Silicon Valley Bank (SVB) closed its doors in early March, I joined many in wondering what kind of risk and control environment the bank had. I specifically wanted to know about its internal audit function. How strong was it? Did it share in any culpability?

Normally, questions like those linger unless/until they are answered in subsequent litigation proceedings or regulatory sanctions. It turns out we didn’t have to wait that long for some perspective on SVB’s internal audit.

Late last month, the Federal Reserve released a treasure trove of documents related to its supervision and regulation of SVB and SVB Financial Group (SVBFG).…

May 1, 2023

IT’S INTERNAL AUDIT AWARENESS MONTH: LET’S START AT HOME

If it’s May, it must be Internal Audit Awareness Month. This is when internal audit leaders and advocates around the world turn up the collective volume for the profession and build greater awareness of the value we bring.

Throughout the month, The IIA, its chapters and affiliates, and many others will gather proclamations from government officials, reach out to the community and, conduct myriad other activities to promote recognition and support for internal audit. It is also a time to create awareness among those who might be considering a future in the profession.

In short, Internal Audit Awareness Month is an inspiring time each year to be an internal auditor, and I support the tremendous efforts.…

April 24, 2023

6 Ways a Career in Internal Audit Prepared Me to Be a CEO

I recently marked two years since retiring as Global President and CEO of The Institute of Internal Auditors. Not one to sit around, I have stayed very busy ever since. But I do occasionally reflect on the amazing opportunity I was given to lead the global internal audit profession, including a $70 million enterprise with more than 200 employees.

Thanks to a highly talented and skilled staff, committed board members and other engaged volunteers from around the world, we accomplished so much. That included impressive financial growth, expansive educational and training initiatives, record membership and certifications, and so much more. I’m not gloating; I am truly proud of those milestones and also humbled by the fact that I didn’t do it alone.…

April 18, 2023

Walking a Tightrope When Internal Audit Stakeholder Expectations Don’t Align

One of the features that makes internal auditing so valuable to modern enterprises is that we serve multiple stakeholders, including the board, various levels of management, and even external auditors and regulators. Conventional wisdom is that internal auditors should align their coverage with stakeholder expectations. But the fact is that the various stakeholder groups rarely agree on where internal should be focused to add value.

Differences of opinions among internal audit stakeholders are sometimes subtle, but trying to satisfy everyone can become particularly problematic if the disagreement is between the audit committee and management. In such cases, the chief audit executive (CAE) can feel caught between two very powerful forces.…

April 10, 2023

6 Things Internal Auditors Should Remember About Human Nature

As a young internal auditor, I concentrated on learning technical skills of the profession. I came to appreciate the importance of developing an audit plan at the beginning of every engagement, documenting results of the audit, and crafting a well-written audit report. I also learned how important it was to understand the operation/business of the area I was auditing. These skills served me well throughout my career. However, I can honestly say the technical skills were easy to learn compared with the soft skills I needed to hone to be truly effective.

I have led or served on scores of audit teams focused on an incredible array of industries and operations.…

April 3, 2023

7 Common Mistakes That Will Doom an Internal Audit

In recent months, there have been some excellent articles on mistakes that internal auditors should avoid in planning and conducting internal audit results, and reporting engagement results. As I have absorbed the wisdom of my colleagues on these important topics, it reminded me of an article I wrote a number of years ago on mistakes I have witnessed over the years that doomed an internal audit. These are not mistakes that kept the audit from being completed. They are mistakes that keep the audit from fulfilling its full potential.

In too many instances internal audits fail to live up to their potential for reasons that could easily be prevented.…

March 27, 2023

Surprise! Proposed IIA Standards Will Mandate Internal Audit Ratings on Findings and Reports

By now, most internal auditors are aware that The IIA has released long-anticipated proposed revisions to its Global Internal Audit Standards. As I recently shared in an AuditBoard blog calling attention to these changes, they would represent “the most sweeping change to the standards in more than 20 years, and present a significant opportunity for internal auditing and its future.”

Until now, I have elected not to provide extensive public commentary on the proposed standards, preferring instead to offer (generally positive) feedback to IIA leadership privately. However, there is one particular proposed change that I feel compelled to address: The standards would mandate ratings (rankings or other indications of priority) for internal audit engagement findings and a rating for the aggregated engagement results.…

March 20, 2023

New Report Reveals Surprising Insights from Internal Audit Executives

Readers of my blogs will know that I often draw attention to new thought leadership on the internal audit profession. I recently highlighted some timely benchmarking data from The IIA. Over the years, there have been countless research reports, surveys and opinion pieces published that have served to advance the profession. The global business consulting firm, Protiviti, recently, published the findings from its 2023 Next-Generation Internal Audit Survey. I was pleasantly surprised by some of the results.

As Protiviti’s headline declares – “Internal audit’s path to continued delivery of value and relevance is strongly tied to adopting innovative approaches to talent, and technology enablement…” I suspect most of us would agree with that assessment – no surprise there.…