Regular readers of this blog know that many of my posts focus on the changes and challenges facing internal auditing. Indeed, today’s dynamic business environment and growing stakeholder demands on the profession hold the potential to significantly impact its value and future.
This ongoing analysis has generated strong readership and equally strong responses, and not everyone agrees on whether the profession is responding with the urgency necessary to keep up with growing demands.
However, no matter which side of that fence you happen to be on, it should go without saying that every internal audit practitioner should be an advocate for a strong and vibrant profession.
At The IIA, we don’t just break out the pompoms and toss confetti to celebrate internal audit. Instead, we are guided by a formal strategic plan that envisions internal audit professionals as being “universally recognized as indispensable to effective governance, risk management, and control.” Armed with that powerful vision, we collaborate with leading internal audit professionals from around the world to craft advocacy strategies and tactics that will drive success.
A powerful instrument in our advocacy tool chest is The IIA’s “Global Advocacy Platform,” a bold statement of internal audit’s value and its vital role in sound risk management and governance. The platform, officially unveiled earlier this year at The IIA’s Global Council in Rome, lays out six pillars of good governance from which this blog post takes its title.
All internal audit practitioners should understand as part of their DNA that strong and effective governance practices are what make or break companies. The first pillar to the platform embraces this and explains that, “Governance is essential to organizational success and requires an open, trusting relationship among the board, management, and internal audit.”
The second pillar clarifies that “internal audit is essential to governance and fosters trust, transparency, and accountability.”
Those first two pillars set the foundation for sound governance practices and internal auditing as being integral to business success. While some might argue that organizations can function successfully without a formal internal audit program, the same cannot be said about companies that lack sound governance. It is, therefore, crucial to have an informed and objective function that can provide assurance on the effectiveness and efficiency of the controls established to promote sound governance and manage risk.
To be sure, virtually every organizational failure includes a breakdown in governance somewhere along the line. Too many high-profile scandals can be traced to ineffective risk management on internal control failures that could have been avoided had they been recognized and addressed.
The final four pillars of The IIA’s Global Advocacy Platform elaborate on the value of internal audit and what is necessary for internal audit to function at the highest levels.
The platform is foundational to the advocacy that The IIA and its affiliates provide in more than 170 countries and territories. While The IIA represents the interests of more than 190,000 members worldwide, its advocacy for practitioners and the essentials of good governance mean it impacts potentially millions of people and thousands of organizations.
The platform also identifies internal audit’s varied stakeholders, making clear that those parties go far beyond the C-suite or the boardroom. This provides the necessary perspective about our profession’s impact and import.
In addition to those charged with governance within the organization, e.g. boards and audit committees, internal audit practitioners should be mindful as they advocate for the profession of our other stakeholders:
As I have written before, my view of advocacy is not about lobbying for the special interests of The IIA or the internal audit profession. It is about educating and creating awareness on the part of legislators, regulators, and others on the vital role internal audit plays in the effectiveness of corporate and government organizations. This platform captures that view.
The IIA and all internal audit practitioners should serve as a zealous chorus for contemplation and reason on good governance. We should be equally passionate about promoting internal audit as a trusted advisor (providing both assurance and advice) to management and the board, and as an element “indispensable to effective governance, risk management, and control.”
As always, I welcome your comments.