Internal Audit’s Imperatives – Relevance, Reliability, and Reinvestment

This week The IIA will host its 74th International Conference in beautiful Vancouver, Canada. Over the next few days, The IIA will be unveiling several important research and thought-leadership pieces outlining opportunities and imperatives for the internal audit profession. As I have reviewed the three significant announcements we will unveil at the International Conference, it struck me that each speaks to different aspects of what amounts to a clarion call. At a time when the current risk landscape offers unprecedented opportunities for internal audit to demonstrate its value, we must show our willingness and ability to overcome all challenges.

Simply, we must step up to answer that call by reaffirming our relevance to stakeholders, proving our reliability by improving our management practices and reinvesting in ourselves as professionals.

Let’s begin with the new International Professional Practices Framework (IPPF), which will be unveiled at the beginning of the conference. It introduces a mission statement and 10 Core Principles that articulate our profession’s commitment to excellence, independence, and bringing value to our organizations. While these are newly articulated in the IPPF, they are restatements of internal audit’s fundamental purpose and provide an excellent foundation to build upon as we strive to reach higher.

The 2015 Global Pulse of Internal Audit: Embracing Opportunities in a Dynamic Environment picks up from there by outlining four areas where the profession can excel in the current business atmosphere. It urges CAEs to take a broad view of risks and flexible audit planning and to have the boldness to expand internal audit’s domain and the courage to handle political pressures.

But it also bluntly reminds us we have some work to do to achieve those important and lofty goals. For example, we as a profession must become more flexible and nimble in our audit planning. With new risks emerging seemingly overnight and technologies further accelerating the pace of change, internal audit can no longer rely on rigid annual audit plans, no matter how well constructed they may be. Indeed, the current marketplace demands near continuous risk assessment to provide real assurance.

Yet the report notes that results from the 2015 Global Internal Audit Common Body of Knowledge (CBOK) practitioners’ survey found fewer than one in four audit functions practice continuous risk assessment. Worse yet, the survey found only 16 percent reported their plan was flexible enough to respond to emerging risks immediately.

The same CBOK survey, which was conducted earlier this year in 23 languages drawing more than 14,500 responses worldwide, is the foundation for a third product being launched at the conference. Driving Success in a Changing World: 10 Imperatives for Internal Audit provides a timely and insightful syllabus of sorts to guide CAEs in a process of continual improvement for themselves and the functions they oversee.

Divided into three sections — Play a Leading Role, Beat the Expectation Gap, and Invest in Excellence — the 10 Imperatives report not only tells us how we are doing as a profession in 10 key areas, but goes further by providing calls to action in each.

The IPPF update and these two reports provide strong direction and inspiration for responding to the challenges the profession faces. What they do not articulate, however, is something we must be cognizant of at all times. The greater the demands on the profession, the greater the risk of failing to meet those demands. That is why we must stay ahead of the curve by expanding our skill sets, pursuing excellence, and continually seeking ways to improve our value to our stakeholders.