Chief audit executives do a lot of things really well, adding value to the companies they serve. What is especially interesting is how well many, especially CAEs of larger companies, gain information and insight through networking. Many are involved with their peers in industry or geographically based discussion groups, sharing through blogs, conferences, and internet-based information exchanges. And of course there’s still the opportunity to communicate via email or text or pick up the phone to talk with a valued colleague.
I’m a member of one internet-based group – though I tend to read rather than write – and am struck by several themes that are the subject of intense discussion and debate. Among them is the extent to which internal audit can and should become more actively involved in their company’s “governance” activities, however the term is defined. There’s an emerging consensus that yes, they should, and with their insights and skill sets they can add significant value, with an eye toward moving up the organization scale from process to senior management’s and the board’s activities. Another topic is transition from providing risk and assurance to performing more consultative services. The debate is heated, recognizing that IIA Standards speak to and enable both, with strong views expressed regarding the opportunities to add value while keeping in mind the need to maintain independence and objectivity. A related subject under discussion involves opportunities for internal audit personnel to move within their companies to other staff or operating units, into any number of management positions. There’s recognition of the benefits to the internal audit function’s recruiting and development and ability to add value, though caveats are expressed and concerns exist regarding retaining objectivity.
Relevant is the IIA Research Foundation’s 2010 Common Body of Knowledge Global Internal Audit Survey, called the “most comprehensive global study conducted on the practice of internal auditing.” Of particular interest is where practitioners focus attention now versus where they see internal audit five years from now. The study shows that while current attention is centered on operation and compliance audits, auditing financial risks, fraud investigations and internal control evaluations, the focus will shift. Going forward internal audit is expected to be looking more closely at corporate governance, enterprise risk management, linkage of strategy and corporate performance, ethics, migration to IFRS, social and sustainability issues, and disaster recovery testing and support. Other topics are mentioned, so readers might want to take a look at the report.
I marvel at the internal auditor networks, where practitioners are benefiting from the exchange of information and thought. If you’re not already involved in one, you might consider looking into how you can do so.