Fine Article on the ABC of a Professional Internal Audit Practice

Norman Marks, CRMA, CPA, is a vice president for SAP and has been a chief audit executive and chief risk officer at major global corporations for more than 20 years.

 

Bruce Turner, an experienced and respected head of internal audit (CAE) has written a fine piece for the initial issue of the IIA–Australia Journal*. While I can’t share the entire piece as it is only available if you purchase a copy of the Journal (available from the IIA–Australia Bookstore**), I would like to share some of the highlights.

Bruce advises that to make a real difference, CAEs should “follow the ABC of professional practice — attuned, balanced, [and] credible.”

When he took over the internal audit department, he took three initial steps:

  1. He moved the team closer to the business. I like this, as the auditors get to know and become respected by the business, both management and staff.
  2. Bruce quickened the pace of audits (they were taking too long to complete) and addressed the quality of reports. He says “Our reports often reminded me of an Agatha Christie novel — you had to hold out to the end to break the mystery.” He also found that each report was considered in isolation, and key point themes that could be seen if you looked across audits for common issues and root causes were not being identified. He was able to provide a “broader picture to the audit committee and senior management.”
  3. He upgraded the staffing, built a relationship with IIA–Australia, and implemented a balanced scorecard for measuring progress.

The article makes excellent use of graphics to illustrate how Bruce turned his new department into a high-performing internal audit team, recognized for quality and value by its stakeholders. I won’t try to reproduce them — buy the Journal. But, here are some more extracts:

  • “Our audit conclusions take into account the internal operating environment and the impact of global events on traditional business drivers.”
  • “We tailor our reports to the needs of the audit committee — we keep them short, sharp and succinct, and are creative in providing visual aids.”
  • “We are not content to report simply on the results of individual audits, but we report on themes, we consider trends and systemic issues, we provide insights into the culture of the entity, and we report on the efficiency, effectiveness and ethics of operations.”
  • “The head of internal audit should live and breathe the business — not live and breathe auditing.”
  • “Internal auditors are expected to be in tune with what’s really going on in the business, and what’s coming over the horizon.”
  • “Develop a risk-based and strategically focused forward work program that ensures that the internal auditors get into the right areas at the right times.”

Bruce concludes with this pithy statement: “Don’t be the mosquito in the room. Irrespective of your role or the size of your internal audit function, you are big enough to have a significant impact on your entity.”

I repeat: the value of article is easily more than the cost of buying the Journal — $50 Australian. Get it.

*By way of full disclosure, IIA–Australia honored me by appointing me one of the four Journal editors, which is equivalent to being on the board (I don’t actually “edit” anything). My role has been providing input on the establishment of the periodical and reviewing some of the submissions.
 

**If you are not a member of IIA-Australia and would like to subscribe to the Journal, please register with them at http://www.iia.org.au/NewUser.aspx.

Posted on Mar 26, 2012 by Norman Marks

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  1.  sounds like a great publication and I am going to subscribe right now

  1. If you are not a member of IIA-Australia, you need to register before subscribing: http://www.iia.org.au/NewUser.aspx

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