The Pros and Cons of Internal Auditors
The role of the internal auditor is changing. As the risks for companies change in this ever-evolving economy, Board Members are now seeking assurance on concerns beyond just the traditional financial risks. Areas such as cyber security, regulation and corporate culture are now more top of mind for companies than ever before.
With both a broad and focused view of the organization, the internal auditor is often uniquely positioned to help business leaders identify issues within their company that may otherwise go unnoticed.
By advising management and the board regarding critical issues and trends, monitoring compliance with laws and regulation and evaluating whether policies and procedures are being followed the Chief Audit Executive can help their company’s leaders identify and mitigate risk as well as capitalize on opportunities to improve operations, reduce costs, enhance revenues and increase profits.
Challenges for Chief Audit Executives
As their role evolves and expands, more challenges arise for Chief Audit Executives, including:
- Auditing and reporting on the sensitive topic of corporate culture
- Obtaining board buy-in of the value of the Chief Audit Executive to be viewed as a trusted advisor on emerging risks and strategy
- Keeping up to date and adapting to regulatory changes and trends
- Maintaining adequate skills to respond to adapting roles and expectations
To help Chief Audit Executives stay on top of emerging issues within the profession and address these concerns, some internal auditors are turning to outside help to stay current with everything they are now responsible for. We’re here to help.
Auditing Corporate Culture
The importance of a company’s culture and the value that internal audit can bring is a new area of emphasis given recent high profile incidents where bad publicity can send a company’s stock on a downward spiral.
However, this can be a difficult line for an internal auditor to walk given that their assessment is often directly over the individuals they are reporting to. Auditing culture can reveal issues at the top, which is why obtaining buy-in from company leadership is a critical first step in the process.
Tackling other financial issues also requires stakeholder buy-in, but culture is particularly sensitive because of the potential implications for management, and so presenting the findings from such an audit can sometimes be as challenging as performing the audit itself.
That’s why bringing in help from the outside to help address some of these issues can insulate internal auditors from some of the heat involved with uncovering items that need to be discussed, but can be sensitive to handle internally on their own.
If you’re an internal auditor who would like to explore what all is needed to stay current with your position to protect your company and get some guidance on how to tackle these difficult issues, please contact the auditors in our office for assistance.
