The Unsung Heroes of the Internal Audit Profession

Richard Chambers, CIA, CGAP, CCSA, shares his personal reflections and insights on the internal audit profession.

The vastness of our profession has never ceased to amaze me. It is estimated there are more than one million internal auditors in the world. Our colleagues work tirelessly in every sector and industry imaginable to provide assurance on the effectiveness of risk management, control, and governance processes. In the vast majority of instances, our work is appreciated and lauded for the value it brings. However, with an alarming frequency, it seems that some of our colleagues who audit local government operations are waging an uphill battle against formidable political forces.

Government has always been a challenging place to audit. It is often argued that government can only be effective if it “maintains the public trust.” If that is true, internal auditors in government play a pivotal role in reinforcing that trust. Their work provides assurance to taxpayers and citizens that resources are deployed effectively and that public officials are good stewards of taxpayer dollars. The transparency mandated by many “sunshine” and other open records laws can present a unique challenge for local government auditors. Imagine that even the results of your draft audit report can be the subject of tomorrow’s headlines. It presents an often contentious and combative environment. Although most elected officials welcome the insight that comes from an effective internal audit program, an increasing number appear threatened by the scrutiny that accompanies critical audit results. When they do feel threatened, they lash out at the messenger! 

The Collin County, Texas mess. When I first heard about the problems that our colleague in Collin County was facing, I thought it was a joke. Surely, the County Commission would not sue its own auditor to stop him from gaining access to audit the county’s computer programs. Yet, as this story in The Collin County Observer indicates, that is exactly what the commissioners did. Fortunately for all of us, a judge ruled against the commission (PDF). You would think the embarrassed commissioners would have gotten the message after spending almost US $300,000 of taxpayer money to impede the County Auditor. Unfortunately, a law has now been introduced (PDF) before the Texas state legislature that would prohibit county auditors from directly accessing or manipulating “real-time data on a computer maintained by a county department or a district clerk, district attorney, county officer, or precinct officer except as authorized by a written agreement between the auditor and the entity responsible for compiling or maintaining the applicable data.” And you thought you had a tough job!

Wait — there’s more. The Collin County case would be bad enough if it was the only one like it. Unfortunately, it seems to be open season on local auditors. Last month, the Jefferson County (Colorado) Commission fired the County Auditor, saying it would save taxpayers money, and that she really wasn’t saving a lot of money anyway. Yet, as this article in The Denver Post reveals, there appears to be more to the story there as well. Since the beginning of the year, at least five instances have been brought to my attention where a local auditor has either resigned in protest or been subject to the kind of political harassment and pressure witnessed in Collin County. I am not sure what is going on, but it is time for it to come to an end. Local auditors are the first line of defense in ensuring public trust in government. Their compensation is normally a fraction of that of their corporate counterparts, yet they persevere in the face of extraordinary challenges. For me, they are the unsung heroes of our profession.

Posted on Apr 2, 2009 by Richard Chambers

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  1. Richard, the problem is not limited to the heros in local government. Many CAEs and others are forced out after 'doing the right thing'.

    Is this an opportunity for the IIA to establish an office to assist members in these situations? You could probably get volunteers to help, if the IIA can assist with contacts with regulators, etc.

  1. Insightful post.  While a member of the Association of Local Government Auditors (ALGA) Advocacy Committee, I worked on many, similar situations across the country.  Some quite compelling.  The majority are diffused by educating decision makers on the proper role of an internal auditor.  One caution: external support (as from IIA or ALGA) should focus on the internal audit function and not the persons employed.  (Some auditors need to be fired.) 

  1. Norman is definitely correct regarding internal auditors forced out when they do the right.  I worked in Enron's internal audit function before it was outsourced--to Arthur Andersen.  The sole reason Lay wanted IA outsourced was because we asked too many tough questions. Of course we didn't know--at that time--that Lay was in on the accounting practices being questioned. So, his solution was to bring in Andersen, who he knew would never raise a fuss about anything as long as they were getting paid big bucks.

  1. There are crazy things going on out there. I am familiar with another story like Shari's. The reward for the internal audit department finding a serious misreporting of sales regarding leases that required restatement - was to outsource the department to a Big 5 firm.

    Causes me to think - I wonder how much of this causes many IAD's to avoid a QAR? I bet there is a lot more going on that we realize - and it is completely against the public's interest - whether in government, corporate, or private non-profit auditing.

    Does anyone think there could be a way - like paying in premiums when we pay our IIA fees - to fund an insurance program to provide X weeks of X% pay to an auditor who loses their job because they did their job? It seems like we would have more success creating a better economy and work culture if the internal auditors were more capable of stating their concerns. Maybe Audit Committees should pay into it, too. :) 

    ...there should be some way that helps an auditor choose to do the right thing when they are concerned about their family's livelihood - which I'm sure is behind why many internal auditors do not speak up or use approaches less likely to find problems.

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