In my last blog entry, I cited some emerging challenges and identified five key priorities that chief audit executives (CAEs) should be pursuing as 2011 gets underway:
I have spoken on these themes at several forums in recent weeks, and one question has arisen on multiple occasions: Who are internal auditing’s stakeholders? While there is no universal answer to the question, I thought it might be worth exploring here.
The IIA’s International Professional Practices Framework refers frequently to the relationships that the CAE and internal auditing have with a number of parties. However, the precise term, stakeholders, isn’t used very often. Dictionary.com defines stakeholders as: “a person or group that has an investment, share, or interest in something, as a business or industry.” Where internal auditing is concerned, I have often bifurcated stakeholders into primary, secondary, and tertiary segments. I’ll share my personal views as to each of these segments.
Primary internal audit stakeholders: For me, this one is the most obvious. I believe the primary stakeholders include:
Secondary stakeholders include:
Tertiary stakeholders include:
Now that I have shared my totally subjective view of who the stakeholders are, what should be done with them? As I often state, internal auditing must recognize that it exists to serve the needs of the various stakeholder groups, and that their expectations are constantly evolving and rarely aligned. Internal auditors and CAEs who lose sight of that fact are at substantial risk of long-term failure.
In the next blog, I will share my thoughts on effective ways to prioritize stakeholders and to identify and respond to their changing expectations. In the meantime, I welcome your views on who our stakeholders are and where my inventory diverges from yours.