By Richard Chambers | May 5, 2022
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. This takes more than a month each year. It requires a continuous focus by internal auditors – both in raising awareness and in bearing out the message through the quality we deliver. To borrow an old expression, “We must put our audits where our mouth is.”
As I noted in a blog last year:
Successfully showing our value is more than what we say. Indeed, it is all about delivering on that promised value. I’ve written extensively on how internal audit adds value, including dedicating chapters in two of my books to the subject. In my first book, Lessons Learned on the Audit Trail, I included a “Life Lesson” that provides particular insight on this subject:
“Your key stakeholders have the last word on whether you are doing your job well. And they judge an internal audit function not by how well-run it is, but by the value it generates for them.”
I do not believe that internal audit’s stakeholders are profoundly unhappy with our performance. In fact, stakeholder perceptions vary widely – from euphoric to apathy to outright dissatisfaction, in rare instances. I firmly believe that internal audit awareness must begin at home. Each of us should size up any gaps in awareness about our capabilities or in delivery against expectations, and immediately address them. Such actions are not just for the good of the profession, they are crucial to our survival. And once addressed, we must continuously assess and realign against evolving expectations.
Beyond the “home improvement” aspect of an awareness strategy, we must band together as a profession to enhance awareness of internal audit’s value in the broader business sector, within the regulatory communities, and in society at large. That takes a coordinated effort on a global scale, and thankfully the profession has The IIA to lead the charge.
While The IIA and others are busy raising awareness about internal audit’s value around the world, they cannot do it alone. Every internal audit practitioner must play a role if we are to be successful. Every time you undertake a risk assessment, launch an engagement, conduct an interview, or publish a final report, you must strive to reinforce that internal audit is an “indispensable resource.” Otherwise, the words of those extolling internal audit’s value will ring hollow.
It must become second nature to deliver value in our organizations. How we get there can be as varied as the organizations themselves. I have authored three books in which I urge internal auditors to audit at the speed of risk, become trusted advisors, and be agents of change in their organizations. These books focus on some core characteristics of great internal audit that will help you continuously provide value to your organization:
Internal audit must be a collaborator. While maintaining its independence and objectivity, internal audit must see itself – and be seen – as collaborating with first- and second-line functions. We must be aligned in helping the organization not only protect value, but to create value as well. Treating the internal audit department as a business unit that provides services to the rest of the organization helps to create the right mindset for providing value. In fact, I recently wrote a blog for AuditBoard that extols the importance of a client service mindset in internal audit.
Don’t just identify problems, identify solutions. Internal audit practitioners must possess the curiosity, passion, work ethic, creativity, initiative, and flexibility to dig deeper to find root causes of problems and then identify imaginative and inspired solutions.
Build and sustain relationships. Reaching out to key senior managers before any audit engagement begins is part of team building. This is crucial, not only for being seen as part of the team, but also for encouraging senior managers to seek out internal audit for help in addressing emerging risks or evaluating a developing situation.
Understand stakeholder needs. Understanding the needs of customers — stakeholders — and having a clearly defined mission for meeting those needs are crucial to knowing how to provide value to your organization.
Finally, I must caution against complacency. For even the most successful internal audit functions can find stakeholder satisfaction eroding if there is not a mindset of continuous improvement. Avoiding complacency requires us to remember who will inevitably judge our value. As I’ve noted before: Ultimately, it is for others to decide whether we are valuable or not. If they say we aren’t, the problem may be that we simply aren’t adding enough value to the operation — or it may be that we haven’t helped our stakeholders to appreciate the value we add. Either way, we must address the problem.
As Bill Bishop my mentor and predecessor as CEO of The IIA used to espouse, “I am proud to be an internal auditor.” Each of us should embrace Bill’s refrain. But our pride will shine much brighter when awareness about our profession reaches all corners of the globe year-round. International Internal Audit Awareness Month is an important step in that regard, but I believe a continuous focus on awareness will take us much farther.
I welcome your thoughts.
I welcome your comments via LinkedIn or Twitter (@rfchambers).