Five Red Flags That Your Internal Audit Department May Be Losing Stakeholder Support
Richard Chambers, CIA, CGAP, CCSA, CRMA, shares his personal reflections and insights on the internal audit profession.
1. Lackluster response. If you’re having trouble getting stakeholders to complete your annual risk assessment, that’s a problem. Executives and board members all have things that keep them up at night. If they won’t share their concerns with you, it could mean that they believe that you will not act on them, or that you don’t have the ability within your team to address them.
2. The phone never rings. Delivering value is key to the long-term success of any internal audit function. If executives and business unit leaders do not feel internal audit adds value, they will rarely seek you out whenever a problem arises, or whenever they believe internal audit input or insight is needed. If your phone isn’t ringing, there may be a disconnect.
3. Breakaway republics. Internal audit is increasingly being referred to as the third line of defense, not a dotted line of defense. A strong internal audit function speaks with one voice. When business units start creating their own audit teams (or their own elements that duplicate the capabilities of internal audit), chances are that they’re not getting what they want from you.
4. Resource reduction. Companies invest in what they value. If an organization is cutting back across the board, that’s one thing. But if your budget is slashed disproportionate to other departments, that’s a pretty clear indicator that you do not enjoy the level of stakeholder support that you need.
5. The external quality assessment isn’t your idea. Standard 1312 of The IIA’s International Professional Practices Framework requires external quality assessments of internal audit departments at least once every five years. Internal audit should never be in a position in which they’re not the ones proactively pushing for that assessment. If your stakeholders independently initiate a quality assessment, it is likely they’ve got concerns and are looking for validation.
Posted on Jul 1, 2013 by Richard Chambers
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