One of the occasional criticisms of internal auditors is that we are not as innovative as some in other professions. There is a grain of truth to the “innovation-aversion syndrome,” as I will call it, but our profession has adopted several new technologies in the past 20 years that have permitted us to leverage key technologies. Today, for example, many internal audit functions leverage audit management systems, deploy systems for maintaining workpapers electronically, use data mining and analysis tools, and deliver our reports electronically with embedded hyperlinks for the readers’ use in perusing evidence or data in greater detail.
While I am proud of the innovation that we have adopted, I am always on the lookout for the next innovative tools, methodologies, and technologies that our profession can pioneer for use. One such tool that recently popped onto my radar is Google Glass – “a wearable computer with a head-mounted display (HMD) that is being developed by Google in the Project Glass research and development project.”
In American Banker‘s BankThink blog, Richard Magrann-Wells, financial services practice leader for reinsurance giant Willis North America, recently proposed fighting securities fraud by requiring traders to wear Google Glass to record conversations and videotape trades.
Bruce Carton, a former senior counsel in the SEC’s division of enforcement, picked up on the idea and wrote in his Compliance Week Enforcement Action blog that perhaps there might even be a place for Google Glass as a compliance tool for public companies.
While it remains to be seen whether Google Glass will be donned by either traders or compliance professionals, what about the prospect that internal auditors might don this science fiction like device for use during the data collection and analysis phase of internal audit engagements? Just imagine the amount of time and effort that could be saved from the normal processes to document interviews or audit evidence. It could all be captured almost effortlessly and saved into the electronic workpapers or other means of documenting the engagement results.
Before we all trade in our green eyeshades for these newfangled devices, we should probably examine the wisdom or folly of such technology in our profession:
Trading firms have been recording phone conversations since the mid-1980s. Texts, emails, and trading conversations are all recorded and discoverable in court. IT departments can log on and monitor the computer habits of practically any individual on any corporate network. So, in that sense, Google Glass doesn’t really represent any new threat to privacy.
From an internal audit perspective, the real question is whether Google Glass would be an effective fraud deterrent, and that’s a question that remains to be answered. Given the persistence of fraud and malfeasance in the face of escalating regulation and deterrence, it’s reasonable to assume that it would be only a matter of time before some rogue element found a way to game the system.
Still . . . I think it would be an idea worthy of debate once the technology is actually on the market.
I would welcome your thoughts.