By Richard Chambers | April 3, 2017
There is significant disruption in the corporate sector that is impacting internal audit. From potential Trump-era deregulation to the emergence of complex new risks to conjecture about its loss of prestige, internal audit finds itself at the epicenter of issues that influence its scope of work, and could damage its reputation and brand.
In many ways, this is a particularly vulnerable time for the profession. As I wrote in last week’s blog post, there are those who seem all too ready to write off internal audit while others, who are perhaps threatened by the scrutiny that comes with strong and well-resourced internal audit functions, appear ready to act as roadblocks to its evolution. This unwitting alliance of naysayers can quickly gain a foothold if they are not challenged through confrontation with the facts.
Frankly, we have come too far to let others define who we are and the limits of our potential. We must gird ourselves with confidence and tenacity, and forcefully reject any notion that internal audit won’t rise to meet and overcome the vast array of new challenges.
It would be foolish not to recognize that these are trying times for our profession. The dynamics of the global marketplace are creating new and rapidly evolving challenges that test our ability to support organizational risk management efforts. At the same time, known risks from regulatory compliance to fraud have not gone away. Add to this uncertainty about changing regulatory environments, an epidemic of toxic cultures, cyber-induced mega risks, and geopolitical unrest, and you have the potential for significant disruption.
This disruption would be particularly troubling if we did not have a good idea of what is needed to navigate the uncertainty. However, I believe there is a clear and achievable path to doing so.
For the past year, I have spoken at venues around the world about the steps our profession needs to take in order to be poised for the future. We must listen to our stakeholders, strive for agility, transform our talent, revolutionize our processes, and elevate our image. I identified these key steps in my first blog post of the year as the five resolutions for internal auditors in 2017.
As events have unfolded in just the first three months of the year, I believe it is now more important than ever to embrace these steps. We have a significant challenge before us that will test our abilities and resolve. It won’t be easy and there will be bumps in the road, but our profession has a history of meeting those challenges head on and enhancing its reputation and value to the organization as a result.
It also is important not to be distracted by critics and cynics who are looking to grasp at anything to diminish the profession. I am frustrated and disturbed by those who are quick to pounce on perceived weaknesses and issue dire warnings about the impending irrelevance of internal audit. They either are motivated by agendas that conflict with internal audit’s efforts to become a vital part of the governance process or are misguided supporters who believe that sky-is-falling predictions will somehow spur the profession to action.
Of course, in order to prove our critics and skeptics wrong, everyone in the internal audit profession must commit to embracing the steps I mention above. I have no doubt it will happen because we have the tools, resources, and know-how to get it done. The IIA will continue to be a source for guidance and thought leadership and an unyielding advocate for the profession.
It gives me great comfort when I consider that internal auditing has amazing and inspirational leaders within its ranks who can and will move the profession forever forward. We have young and enthusiastic newcomers who have embraced technology and can provide significant support to revolutionizing how we do our jobs. And we have a core of seasoned practitioners whose careers have been forged in the fires of the fraudulent-financial-reporting-induced Sarbanes-Oxley era, the financial-crisis-induced Dodd-Frank era, and a cybersecurity revolution who will take strong leadership roles in transforming our profession.
Disruptive times test our preparation, flexibility, and commitment, and it can sometimes make us question our abilities. But, speaking with the hindsight of more than 40 years in the profession, I can say unequivocally that internal auditing can and will adapt and grow to become a trusted advisor to its stakeholders, no matter what the future holds.
I, for one, do not intend to hunker down and assume a defensive posture. I am a firm believer that a good defense is a strong offense. I urge you to join me.
As always, I look forward to your comments.