Tell the World!

August 2006

Tell the World!

The IIA's new chairman of the board, Stephen Goepfert, CIA, challenges internal auditors to share their passion for the profession every chance they get.

Stephen Goepfert, CIA

It's an exciting time to be an internal auditor.

As audit committees, senior management, and regulators increasingly turn to us for input on key areas of corporate governance, the profession continues to attract more attention and visibility. As we've all heard, internal auditors are the new "rock stars" of the business world, and, according to BusinessWeek, we've "never looked sexier." As internal auditors find themselves in the spotlight, many are turning to The IIA to ensure they're up to the professional challenge. Midway through 2006, IIA membership exceeds 120,000 professionals — including more than 50,000 certified internal auditors (CIAs) — and is continuing to grow at a rapid pace. Our profession is hot, hot, hot or, as we say in Texas, "Muy Caliente!" It is amazing to me how much has changed in the world of internal auditing since I entered the profession as a junior manager in a small audit shop 26 years ago. Internal auditors today are continually taking on new challenges and accepting more responsibility for their organization's well-being. However, even as the internal audit profession achieves increasing recognition for its contributions, many of the ways in which it adds value continue to go unnoticed in the business world. With the many challenges being faced in our global economy, there is no better time than now to proudly "Tell the World" the many ways in which internal auditors contribute to organizational success.

FROM EVERY ROOFTOP

With all of the attention currently focused on internal auditing, auditors have the ideal opportunity to promote their profession. It's time for us to tell the world that ...

... internal auditors add great value to the organization. By strategically analyzing and identifying key areas in which to become engaged, we can add value to the bottom line of our organizations as well as ensure the ethical environment remains strong. At Continental Airlines Inc., where I am staff vice president internal audit, audits of dependent care eligibility in the medical benefit programs, payments to pensioners from defined-benefit pension programs, third-party vendor contracts, and officer compensation and benefits are just a few examples of audits that returned monetary and/or intrinsic value to the organization. Moreover, I see continual value yielded from our recruitment and training of professional auditors who exhibit tremendous talent while working in the internal audit department and then use those talents to strengthen other areas when they take on new career opportunities as managers and directors in the organization. This process further enhances effective internal controls and accountability.

The overall value provided by internal auditing is reflected in our ability to manage the responsibility of understanding and delivering on the multifaceted expectations of our constituents, from the audit committee, to senior management, to external auditors and our fellow co-workers and customers. Internal auditors are a driving force behind ensuring that the ethical environments in our organizations are sound.

... we are advocates for our profession and for strong corporate governance. Advocacy is one of the three main objectives of The IIA's current strategic plan (the other two being globalization and service to members). The Institute has made important inroads in getting key constituents to recognize the value of internal auditing. It has successfully gotten a nominee — Kimberly Gavaletz, former vice president, Corporate Internal Audit, at Lockheed Martin — on the U.S. Public Company Accounting Oversight Board's (PCAOB's) standing advisory committee. The IIA has participated in The Committee of Sponsoring Organizations of the Treadway Commission (COSO) since the late 1980s and continues to promote COSO's internal control and enterprise risk management (ERM) frameworks as well as the proposed small business model for internal control.

Globally, we partner with the International Federation of Accountants, Association of Chartered Certified Accountants, International Organization of Supreme Audit Institutions, National Association of Corporate Directors/Institute of Corporate Directors, and, through our affiliate network, with many national professional organizations and regulators. All of these advocacy efforts pay dividends in the form of giving our profession a voice.

... The Institute's strong professional standards and exemplary certification programs are second to none. The IIA's International Standards for the Professional Practice of Internal Auditing (Standards) are the primary source of guidance for internal auditors. The PCABO recognizes the Standards in its Accounting Standard No. 2, which presents the basis for the external auditors to rely on the internal auditors' work, provided they practice in accordance with the Standards. I encourage you to incorporate the Standards as an integral component of your internal audit function, as they provide a blueprint for the old adage "what gets measured, gets managed." The Standards describe the nature and characteristics of internal audit activities as well as provide quality criteria for which the performance of internal auditing can be evaluated. In essence, the Standards serve as your guidebook for promoting and preserving the quality, credibility, and professionalism of our profession.

It is a wonderful testament to the strength and credibility of The Institute that so many of our members have obtained one or more of its certifications. Internal auditors who achieve an IIA certification demonstrate both their competency in and commitment to internal auditing.

In reflecting on my path to obtaining the CIA designation in 2002 (27 years into my professional career and already possessing the certified public accountant (CPA) credential since departing college), I think about the inspiration I drew from The IIA's late president, Bill Bishop, who challenged me by saying, "If you want to develop others to achieve the highest standard of excellence, you must serve as the premier role model." I encourage and challenge each of you to take time now and tell the world of your commitment to the profession by attaining an IIA certification. Your dedication will set an example for others who are reaching for excellence.

... internal auditors are serious about instituting best practices. There are many activities in which internal auditing exemplifies best practice. In my internal audit department, we instituted an "executive of the month" program where an officer from the organization provides company updates and insights to the auditors at our monthly staff meetings. Since the onset of the program, the time spent by the officers has exceeded my expectations — 30 minutes vs. 10 minutes — as they interact and engage directly with the auditors about what they do and share their personal experiences of how they value internal auditing. With visits from the chief executive officer and chairman, president, chief financial officer, and all of the executive vice presidents, this program has been an excellent sharing and learning experience for our executive and audit staffs.

I find that the distinguishing attributes of a "best practice" in internal auditing parallel the strategic directives of The IIA in identifying ways to optimize global reach, build relationships to further advocacy, and provide service to constituents beyond their expectations. Investing time and effort to strengthen the profession in your day-to-day activities is key to building a legacy for future generations.

... The IIA is an excellent resource for building world-class audit departments. As a chief audit executive (CAE), I am continually challenged by the many issues associated with corporate governance, including the U.S. Sarbanes-Oxley Act of 2002, whistleblowing acts, ERM, continuous monitoring, anti-fraud measures, and quality assessments. The IIA provides me with the resources to address these matters. From its excellent CAE Bulletin and Tone at the Top newsletters, to its leading-edge magazine, to CAE roundtables, to world-class conferences and seminars, to webcasts and other e-learning products, to great research tools available through its Research Foundation, The IIA arms me with the tools I need to be successful in my job. And, of course, I can interact constantly with a great network of my CAE peers through the many leadership and volunteer venues The IIA provides, including chapter and affiliate meetings, leadership and volunteer committee meetings, conferences, and other events. I am very fortunate that my company's senior management and audit committee support my activities with The IIA. That support is due, in part, to the benefits they derive from my ability to network and obtain best practices from my fellow CAEs.

... IIA membership reflects our global profession. Institute membership comprises professionals from around the globe, with more than half of our membership coming from outside North America. The major growth in The IIA in the last 15 years has been in our international affiliates, and we have been fortunate to have had excellent leaders from around the world as our chairman, including Bob McDonald from Australia, Jean Pierre Garitte from Belgium, and Hans Spoel from France. The IIA's current Board and many of its committees also have global representation.

Yet, many opportunities remain for us to make our profession and The Institute truly global. We must reach out to developing countries to build capacity for internal auditing in those areas. For example, in Africa, The IIA has partnered with the World Bank to train the team of the Kenya government's Internal Auditor General to be able to apply risk-based auditing. The training included a pilot of the methodology in two ministries with lessons learned and a roll-out plan to all other ministries.

We also need to understand and address the challenges associated with translating The Institute's products, standards, and certifications into the languages of internal auditors around the world. And, we need to reach out and learn from those developed affiliates that have already produced excellent resources to communicate to their constituencies about good corporate governance, sustainable development, and other best practices. We must continue our efforts to emulate The IIA's motto of "Progress Through Sharing."

... internal auditing is a great career. I frequently speak with college students and am often asked why they should consider a career in internal auditing. Many of them are convinced by educators and accountants that they should enter the world of public accounting if they are to be successful. Although a background in external auditing can be very useful — I started my career that way — I do point out that a career in internal auditing is also a path to success. Many of our internal audit peers have successfully gone into leadership roles in their companies. The IIA has approved the Global Academic Development Strategy to consider how to initiate a stronger internal audit presence in the educational programs of colleges and universities around the world. We must continue to support those efforts to ensure we grow internal auditors at the grass-roots levels.

... we are enthusiastic about internal auditing. Bill Bishop would always end an IIA event by asking everyone in the audience to stand and say, "I am proud to be an internal auditor." Having been in the internal audit profession since the early 1980s, a CAE in my company since 1989, and a member of The Institute since 1991, I can truly say today that I couldn't be prouder about being an internal auditor and where we stand now as a profession. I tell my team members every day they should wake up and be enthusiastic about coming into work, and if that enthusiasm stops, they need to find out what makes them excited.

An awesome testament to the enthusiasm surrounding the profession is the unprecedented growth our Institute has experienced in the last 15 years. Growing from approximately 42,000 members in 1991 — when we celebrated our 50th anniversary — to almost 70,000 members in 2000 was an important milestone, as this was the first time 50 percent of our membership was from outside North America, truly revealing The IIA's global reach. In the past five years, we have experienced more growth than we did in the first 50 years! This serves as a wonderful reminder as to why we must not become complacent in our achievements but continue to listen to our members so we can continue to grow and serve more of the profession.

... we are a forward-looking association. If the current rate of growth continues, The Institute could have upwards of 200,000 members within five to 10 years. We must prepare ourselves for continued growth on a global scale. We need to think about how we grow internal auditing in parts of the world that are still learning what the profession is and in areas where internal auditors are wanting to take the next giant leap forward. We need to study the profession of internal auditing globally so we understand all opportunities for further development. The Common Body of Knowledge (CBOK) research program, supported by contributions to the William G. Bishop III, CIA, Memorial Fund, will help broaden our understanding of how internal auditing is practiced around the world. The comprehensive study will be updated every three years and will be a permanent program of The IIA Research Foundation.

Further, we need to consider the possible effects of continued dramatic growth on our headquarters facility and staff in Florida, as well as its effect on our affiliates around the globe. We need to ensure we have the staff and facilities to continue to provide excellent service to our new and existing members. And, we need to examine where best to place staff to support the worldwide growth of our membership.

To keep pace with the rising membership, the number of headquarters employees has increased by more than 50 percent over the past five years. And, although we opened a new headquarters building just a few years ago, we are fast outgrowing that space due to the phenomenal growth of The Institute.

A BRIGHT FUTURE

We must continue to expect great things for our profession; we must remain strong advocates to regulators and our company constituents; and we must prepare to provide services to an ever-growing global membership. If we maintain our enthusiasm and our passion for the profession, soon we won't have to tell the world who we are and why we are necessary to the organization. The world will be telling us how we add value and calling for us to take a seat at the table.

To comment on this article, e-mail the author at stephen.goepfert@theiia.org.

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