By Richard Chambers | December 12, 2016
Starting this month, The IIA will have a full-time presence in Washington, D.C., with the hiring of our first director of government relations. This marks the first time in almost 45 years that The IIA will have an office presence outside of Florida. While The IIA has had a D.C.-based government relations firm since 2012, putting a face on The IIA will be invaluable to getting our message across to those who craft laws and regulations that impact internal auditing and to promoting the value the profession provides to business and government.
However, for this important development to be fruitful, The IIA must have a clear and compelling message to share with legislators. Effective advocacy is as much an exercise in education and image building as it is about influencing, so we must make our message a powerful one.
Our presence in Washington is not about lobbying for the special interest of The IIA, or of 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. Rather than lobby for specific legislation, we are a voice for contemplation and reason when new legislation and regulation is proposed by others. We want well-intended legislators to consider the unintended downstream consequences of new legislation on risk management and internal controls.
In countless meetings with legislators and their staffs over the past four years, I have stressed the importance of enabling the nation’s internal auditors to “follow the risks” in their organizations. I often point out how legislative and regulatory requirements, such as the Dodd-Frank conflict minerals provision, can derail risk-based audit planning.
In my view, there is no more compelling message than this when engaging in dialogue in Washington: Good governance is essential to healthy and effective business and government, and internal audit is indispensable to good governance. Ultimately, governance — the process by which policies, practices, and protocols that support an organization’s goals and mitigate its risks are developed, articulated, and enforced — is foundational to all business and government.
Many of the benefits of successful businesses and public institutions that we take for granted are the products of effective governance, including accuracy in accounting, protection of customer information, fraud deterrence, well-maintained transportation systems, clean water, safe streets, and public education.
The key to all these positive aspects of business and government is not governance in itself but its reliable efficacy, and we stress to legislators and regulators that is where internal audit plays a vital role. All the public pronouncements and good intentions about attaining lofty business and government goals mean nothing without some assurance on the effectiveness and efficiency of the processes for getting them done.
For more than a millennia, some form of auditing has provided assurance to commerce. Today, well-resourced, independent, and objective internal audit functions around the world provide assurance on a myriad of processes from financial reporting accuracy to cybersecurity. Conservatively, more than a million dedicated members of our profession are working in all imaginable conditions in support of good governance.
Most people can’t define good governance, but they have an intuitive sense of what it is. They understand and accept the social contracts that govern business and government interactions, and they expect efficiency, accuracy, honesty, and ethical behavior in these interactions.
Yet of late, many public and private institutions have shown they have inadequate governance structures, and the resulting failures have been spectacular. These failures continue to feed an atmosphere of distrust with public and private institutions.
The message our new director of government relations and the rest of us at The IIA will express to legislators has been carefully crafted with this growing public distrust in mind. It focuses not only on restoring that trust by strengthening public- and private-sector commitments to good governance but also by leveraging internal auditing’s crucial role in that process.
In the coming year, I will be writing more about the three steps The IIA has identified for improving governance and restoring trust, and I hope all of you in the profession will support our message in your daily interactions.
As always, I look forward to your comments.