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Boards Beware – 3 Ways to Stifle Internal Audit Under the Guise of Support

By now, many stakeholders realize the value of an empowered and effective internal audit function. These functions provide stakeholders with independent evaluations of an organization’s operating environment. Management also benefits from these independent evalutions, however, global acceptance by management is not as consistent as stakeholder acceptance. I firmly believe some of this has to do with the fact that internal audit functions are often mandated. Few of us like to be told “what to do”. New York Stock Exchange listed organizations are required to have audit functions. NASDAQ recently proposed mandating audit functions for its listed organizations. So if you must expend time, money and efforts on an audit function, why not utilize it to benefit the organization? Thankfully many organization do just that. However, there are some organizations that make a conscience effort to stifle internal audit functions. Moreover, many stifle the activity under the guise of support. Here are three ways a management team can stifle internal audit

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My 3 Biggest Fears as an Internal Auditor

Internal auditing is a rewarding career. Stakeholders trust internal auditors to evaluate policies, processes and procedures to determine if organizations are adequately mitigating risks. This is a huge responsibility. When things are going well, clients often view auditors as the “traffic cop” or a “necessary evil”. However, one of the first questions asked when a control breakdown occurs is “Where were the auditors?” or “Why didn’t the auditors catch this?”. It is a double edged sword. Often practitioners are met

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Internal Audit Talent Management

Internal Auditing is a profession that requires diverse skill sets. For example, there are auditors who specialize in construction, medical billing, pharmaceuticals, and information technology. Additionally, jobs for auditors seem to be fairly plentiful. As a result, hiring, developing, and retaining talented audit professionals can be a challenge. When faced with hiring dilemmas, auditors tend to place the blame on many external factors such as no funding/support or lack of local qualified talent. This may very well be true, however, the real talent problem may be more close to home and directly related to how we search for talent.

Take, for example, most internal

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Are Audit Recommendations Obsolete

Internal auditors are assurance providers charged with evaluating risks and providing stakeholders with reasonable assurance that risks are appropriately identified and treated. This usually begins with a risk assessment, followed by audit planning, which leads to an audit engagement and finally ending with an audit report containing issues that need to be addressed.

By now, we’ve all seen the standard

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Auditors Must Understand the Reward Side of Risk

I recently wrote an article discussing the up and downside of risks (Risky Business As Usual). I strongly believe auditors must be aware of both. This view sparked a lot of discussions on LinkedIn and emails in my inbox. I stand by the position that risk management involves managing threats and opportunities. Recently, I CFO.com article introduced the concept of Value Map in which the traditional

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Audit Projects without Opinions are Pointless

I am Still amazed by the number of audit functions that produce audit Reports without providing opinions about the control environment. After all, Internal Auditing is an objective assurance function. There is no way one can provide assurance without a formal Concluding opinion.

December 2012. I had the privilege of authoring an article for the IIA magazine titled “‘Your Opinion Matters”. It is presented below in its entirety with permission from the I IA.

The power of opinions has forever changed the way we purch

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Taming audit client tantrums

Most audit clients understand that the purpose of an audit is to perform an independent evaluation of functions to determine if operations are effective and efficient. It is a strenuous process on clients. In many instances, it may not be enjoyable, however, most clients tend to respect the process. Occasionally, there are clients who exhibit behavior that is less than mutually respectful. I have said it before, being audited is just as stressful as auditing. I have personally seen clients scream, curse and toss items. While some clients are simply wired to be difficult (see related article on audit client types), I truly believe that a majority of clients are mature enough to

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