Chief Audit Executives Have Never Been Stronger!
Richard Chambers, CIA, CGAP, CCSA, CRMA, shares his personal reflections and insights on the internal audit profession.
Let’s cut to the chase! The past decade has seen a rise in stature of the internal audit profession that is unparalleled in its history. Leading the way have been the men and women who led internal audit functions in enterprises around the world. In the past few years, I have had the privilege of getting to know many of them and the departments they lead. I am confident when I say that the overall caliber of chief audit executives (CAEs) in 2011 has never been stronger!
I have been in the internal audit profession long enough to remember when there was still a grain of truth in the stereotype that accountants and auditors, by nature, were bean counters who hovered over 16-column spreadsheets. Today’s internal auditors, however, must know much more than how to count beans. They must understand “how the beans are grown, harvested, and even marketed.” No one in the internal audit function has to be more keenly adept at these tasks than the CAE.
In the past decade, boards and senior management have come to recognize the pivotal role a CAE can play in helping the organization enhance internal controls, risk management, and corporate governance. In fact, many organizations today cast a broad search when seeking to fill the CAE role rather than routinely promoting the next in line from the audit department. That is a sign to me of the importance that is being placed on acquiring the right talent for the next CAE.
It’s also the CAE who, in most cases, is joined by nobody else but a CEO in a corporate structure in having his or her performance directly reviewed by, and being directly accountable to, members of a board of directors. That alone, beyond all the other executive developmental pressures of a CAE’s job, has ensured — and will continue to ensure — the elevation of the caliber of the CAE.
During my tenure with PricewaterhouseCoopers, I had the opportunity to work with CAEs in more than 75 Fortune 500 internal audit functions in the United States, plus scores of others around the world. From my experience, modern CAEs are agents of change who not only understand the business of their enterprise, but also are capable of building and sustaining relationships and developing the key internal audit talent supporting them.
Are there opportunities to enhance the caliber of CAEs beyond where they are today? Absolutely. But, the same also can be said of CEOs, chief financial officers, and the rest of the corporate C-suite. I seriously doubt that more CAEs have been involuntarily replaced than CEOs.
I have shared these thoughts on modern CAEs not simply to serve as their “cheerleader.” Instead, I want to put my thoughts on record so that they can be weighed in various discussions currently going on about this important topic.
I welcome your views on the relative strengths of the leaders of our profession.
Posted on Oct 27, 2011 by Richard Chambers
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Internal Audit as a profession is something we are all very proud. The challenge that lies ahead for internal audit is plenty. Just to name the few, internal auditors today must recognize what is going on around us viz., people displeasure with the way system itself in meeting the expectation. Occupy wall street protestors in New York, european debt crisis and corruption that brought age old rulers to their knees viz., Egypt, Tunisia and Libya in the midst of middle eastern political climate. One of the common things I have heard from many internal audit practitioners is that entry level auditors tend to miss big picture approach when the audit is undertaken for many reasons viz., inadequate time budget or inadequate training or impractical audit objectives or goals where there is already expectation gap between a supervisor and entry level auditor on the job or expectation gap between client and the auditor or simply a mismatch between needed skils for the audit job on site vs., client's availability of time and resources for the specific audit task. All in all, professional auditing standards suffer and it leaves dissatisfied client with unprofessional deliverables at the end of the day. Meeting the goal and standards at the level it is required should be emphasized to the entry level auditors and the needed commitment the entry level auditors should exhibit on the job must be emphasized clearly. Today's entry level auditors are tomorrows senior auditors.