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Second Quarter 2012

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Sawyer’s Internal Auditing: Then and Now

The year began with President Richard Nixon proclaiming, “I am not a crook,” at the start of the Watergate hearings in the U.S. Senate and ended with the Dow Jones closing at 850 points. A gallon of gas cost $.40, the average annual income was $12, 900, and the average price of a new home was $32,500. It was 1973, signaling the end of the Vietnam War and the launch of Skylab, the first U.S. space station. It was a year frenzied with activity that left a nation searching for a road to recovery and starving for a sense of security.

However, there were signs of resilience and signs of hope. It was the same year that the man who would come to be revered as “The Father of Modern Internal Auditing” introduced a publication that would drive the internal audit profession, and as a result the business community at large, forward for decades to come. The first edition of The Practice of Modern Internal Auditing, by Lawrence “Larry” B. Sawyer, was released in 1973, comprising 531 pages that painted the first comprehensive picture of the profession as a value-added asset in the business arena. The book was part of Sawyer’s lifelong quest to transform the image of the profession — which he playfully captured in a poem he penned just two years before its release — by empowering practitioners with a quick and comprehensive resource that allowed them to more effectively meet stakeholders’ needs. A snippet of the “Then” portion of his poem, The Internal Auditor: Then and Now, shows just what a challenge he was up against:

The author Elbert Hubbard, in a moment born of pique,
Described the classic auditor as something of a freak,
The auditor, said Hubbard, is a man past middle age,
Spare, wrinkled, cold, and passive, although something of a sage.
Polite and noncommittal, unresponsive as a post,
With eyes much like a codfish and the charm of burnt rye toast.

Now, nearly 40 years after its original publication, the spirit and soul that Larry Sawyer poured into The IIA Research Foundation’s (IIARF’s) flagship publication is alive and well. The sixth edition of Sawyer’s Internal Auditing will be released at The IIA’s 2012 International Conference being held in July in Boston, Mass. Since the original release of the book, the subsequent editions were expanded and enhanced to address the evolving issues of the day, with the fifth edition being published in 2003 at 1,446 pages. “The new edition is written with the auditor who is perhaps newer to the profession in mind and motivated to want to know the emerging practices from around the world,” says Jim Key, project manager for the update. He says it will also employ a more concise writing style and encompass roughly half the page count of the prior edition.

In the 70s, it would not have been unusual to see a practitioner sitting in a library thumbing through a hard copy of The Practice of Modern Internal Auditing to study for the Certified Internal Auditor® exam. In the decades that followed, it would likely be stashed in the backpack of many soon-to-be-practitioners, as it has been the number one internal audit textbook used by colleges and universities throughout the world. And in the not-too-distant future, it will not be uncommon to see the pages of the sixth edition of Sawyer’s Internal Auditing filling the screens of e-readers and smartphones in coffee houses and conference rooms around the world.

“The writers and editors were asked to organize their material from the perspective of how it would move to a digital environment,” says Key.  Just as Larry Sawyer was one of the first to focus on the softer side of the profession, his work will serve as The IIARF’s first true e-book, and there are also plans to develop a smartphone application. “Practitioners increasingly want to access and navigate reference documents such as Sawyer’s sixth edition via a web-based or cloud-enabled resource,” says Key. “Once the printed text is available, the work begins on developing a subscription service, available electronically, that will enable updates to Standards, practice advisories, research material, and emerging best practices to be added and updated to the original material.”

One thing that will not change is the unparalleled standard of quality that people have come to expect from Sawyer’s. It was a bar set for excellence established by a man whose energy for evolving the profession was unrelenting. “Sawyer’s sixth edition leverages the long tradition begun by Sawyer himself to present the practice of internal auditing as a forward-leaning profession that promptly responds to clients’ needs,” says Key. In addition to the three core modules of the new edition, which include internal audit basics, reporting and managing relationships, and information technology and emerging trends, Key is particularly pleased with a new module that has been added to the edition focusing on Governance, Risk Management, and Compliance (GRC).  “It draws on the early advocates of this evolving approach to aligning all of the assurance activities with the value creation (or destruction) present in any business model,” says Key.  

Those who knew Larry Sawyer personally say that his intense passion for spreading the word about the value of internal auditing came from his deep admiration for those who chose to rise to the challenges of serving as a practitioner, as he truly believed the internal auditor’s job was to serve. And to his credit, with the release of the sixth edition of his landmark work, there is no doubt that the “Now” portion of the description of the internal auditor in the poem he wrote more than 40 years ago has become a reality:

He’s warm and he is active, and commitment is his style,
Exchanging ancient wrinkles for the crinkles of a smile.
Not petrified but flexible, adjusting to the times –
To broader needs than merely counting pennies, nickels, and dimes.
The auditor with green eye-shades is gone, we hope for good;
A problem-solving analyst emerges where he stood.

“He believed us to be the 'eyes and ears' for management, going where they could not, seeing what they would like to see, and hearing what they would need to hear,” says close friend and former IIA staff member, Michael Piazza, MA, MBA , CICA. “So we could summarize all of that information into helpful recommendations for the good of the organization.” The authors believe this latest edition will honor Larry Sawyer’s legacy by providing a quick, accessible, go-to resource that internal auditors can use to put them on the right track toward making informed decisions.