Going Up

Going Up

During his term as 2007-2008 IIA chairman of the board, Gerry Cox, CIA, MIIA, plans to take internal auditing to a new level of professionalism.

Gerry Cox, CIA, MIIA

When I began my career in internal auditing in 1976, auditors were viewed as the police officers of the organization. In fact, the profession attracted a lot of people who enjoyed the "gotcha" role then associated with auditing. The job consisted largely of identifying errors and then "nailing" the people who made them; practitioners focused on reporting problems rather than working in partnership with management.

What a difference 30 years makes. Today, internal auditors work hard with management to find solutions. They focus much more on adding value than finding fault. Today's auditors help management evaluate and improve the effectiveness of risk management, internal control, and governance processes. We are in a unique position to effect change and to make a real difference in how the organization runs, and that's a powerful and satisfying feeling.

However, although internal auditing has made great strides, we have further to go. During my term as chairman of The IIA, my primary goal will be to help take auditing to the next level of professionalism. My theme for the year is "raising the bar," meaning that I want to improve the credibility of the profession in the eyes of its stakeholders. I want to sell the message to the corporate world and the profession that internal auditors are true professionals. I want to spread the word that we are raising our performance to meet the challenges that face our organizations around the world.

To date, getting organizations to recognize our professionalism has not been easy. We continue to fight for a seat at the table and for our chief audit executives to be seen as true executives. Further, many organizations don't yet turn to The IIA as the first port of call when they are looking for information about the profession or seeking to hire internal auditors. I want to change that. I want organizations to naturally think of The IIA when they're reviewing candidates for internal audit positions. Are those candidates members of The IIA? Do they have the Certified Internal Auditor credential? I want people to associate The Institute with audit professionalism.

The IIA and its members have an opportunity to take the profession to a much higher level of performance. As chairman, I intend to make sure we're headed in the right direction.

FLOOR PLEASE?

To raise the bar on internal audit professionalism, auditors need to hone their existing skills to a fine degree of expertise. They need to look beyond risk and control assessment and determine how they can provide additional value. Moreover, The Institute needs to ensure it's offering the products and services that will help its members become qualified audit professionals and that it's advocating for the profession at every opportunity. How do we accomplish these goals? One floor at a time.

1st Floor- Enhanced Professional Requirements

An internal auditor's professionalism should be based on recognition that he or she has met certain IIA-defined requirements. To accomplish this, The IIA must provide a set of criteria—including competencies, education, certification, experience, and continuing education—that a practitioner must meet to be designated as "professional." The Institute can ensure adherence to these requirements by:

Educating practitioners on the requirements.
Establishing techniques to evaluate adherence.
Evaluating the state of the profession globally.
Implementing programs to encourage adherence to professional requirements.
Addressing failure to meet professional standards.

For those auditors who don't yet meet the requirements, The Institute must provide a track to achieving professional status. Those who choose the professional track must acknowledge that The IIA has the authority to set the bar, monitor adherence, and even remove their professional designation if performance falls significantly short of the established requirements. I recognize that this may not sit well with some of our members, but like most widely respected professions, internal auditing needs to be able to regulate itself. The desired result of such action would be a high number of practitioners who are certified and meet professional requirements. Further, I want to see a recognition by the general public of the benefits of professionally practiced internal auditing and an appreciation for The IIA as the definitive source for consultation on governance, risk, and control — truly the "voice of the profession."

2nd Floor- Organizational Quality

To ensure consistent quality within the audit function and throughout the organization, a quality assurance and improvement program must be undertaken. The required elements of such a program include internal quality assessments (QAs), external quality assessments, internal monitoring, and assurance that the internal audit activity is complying with The IIA's International Standards for the Professional Practice of Internal Auditing (Standards) and Code of Ethics. Currently, for an audit function to say it operates in accordance with the Standards, it must establish a program that includes both ongoing and periodic QAs and an external QA at least once every five years.

Having a quality assurance and improvement program in place can help build stakeholder confidence by demonstrating management's commitment to quality and the internal auditors' mind-set for professionalism. Obtaining an external QA provides evidence to the board, management, and staff that the audit committee and the internal audit activity are concerned about the success of the organization's internal controls, ethics, governance, and risk management processes. For those who doubt the value of QA, just ask yourself this simple question, "Why wouldn't I want to do this?" Cost might be an issue for some, although most would consider it money well spent. However compliant and professional you believe your audit service to be, there will always be opportunities to improve.

3rd Floor- Defined Internal Audit Principles

The IIA must be the recognized standard setter for the profession. The Institute currently defines the principles of internal auditing through its International Professional Practices Framework (iPPF). It must strive, however, to deliver the framework globally such that the language, culture, media of communication, and timeliness allow members, interested practitioners, and other constituents access to this core internal audit guidance. To accomplish this, The IIA is revising the iPPF, establishing translation processes and protocols, and will continually update its technology to accommodate delivery of information.

Although the iPPF provides a consistent framework for the profession, The IIA also offers a raft of other guidance and information. To maintain cutting edge knowledge and skills, the truly professional internal auditor should visit The Institute's Web sites regularly, both local and the global, for the very latest advice and direction.

4th Floor- A Truly Global IIA

My perception is that most members of The IIA have a clearly understood connection with their local chapter or affiliate. But many are hardly aware of the dynamic, global network of which they are a part. We have a lot of work to do to improve awareness among members, as well as to refine the way The IIA achieves its goals globally.

The Institute and its local entities must therefore actively share information and knowledge throughout The IIA organization. For this to be achieved:

We must help the membership see The Institute as a global organization.
We must work with our chapters and affiliates to make the IIA brand recognized globally.
We need a structure and economic model in place to sustain The Institute globally.
We must strive to ensure that global professional principles are implemented worldwide consistently.
We need to work with the worldwide IIA family to ensure the respective roles, responsibilities, and accountabilities of each element of The Institute—local, regional, and global—are accepted and applied.
We must conceive, develop, and distribute products
and services worldwide, leveraging The Institute's
global network.
We must establish seamless knowledge sharing among affiliates and the global IIA organization.

Ultimately, our goal must be to provide individual members seamless connectivity to the global organization through their local entity.

The IIA's 2008-2013 Strategic Plan, which is slated for approval by The IIA Board of Directors in December 2007, attempts to address each of these issues and is well along in defining desired outcomes. The Strategic Planning Steering Committee, established by the Board of Directors' Executive Committee, has initially identified five milestones — or "working" vision statements — that would help take the internal audit profession to the next level. Those milestones state that by 2013:

Internal auditing will be universally recognized as a profession.
The IIA will have defined the principles of the profession and ensured that the principles are available seamlessly worldwide.
The Institute will have ensured adherence to professional requirements.
The IIA will have become the preferred provider in the research, development, and dissemination of knowledge to advance the profession.
The IIA will be seen by its members, and will operate, as one global organization.

Because we are consulting a wide range of stakeholders on our strategic thinking, some refinement of these milestones can be expected in the coming months. Meeting these milestones will help ensure internal auditing receives the recognition it deserves as a truly professional practice and that The Institute achieves its three strategic directives of advocacy, globalization, and service to members.

TOP FLOOR, PLEASE

The IIA, and the internal audit profession as a whole, is maturing. Now we need to come out of the shadows and raise our profile. The lasting message I hope to convey is: "Be proud." Internal auditing is a leading profession that is helping companies and organizations around the world to get better.

As chairman, I pledge to elevate the profession by:

Listening to members around the world and acting on what I hear.
Communicating with regulators, legislators, professionals, and stakeholders to "sell" the profession.
Encouraging and facilitating developing chapters and affiliates to improve their understanding of internal auditing.
Promoting the profession and The IIA in areas of the world where penetration and understanding are limited.

It is essential to me that my term as chairman be remembered as a year in which The IIA took a step forward — where we started to convince people we are a genuine profession with credible standards and certifications, and took the profession to the next level. I look forward to serving The Institute in this capacity and to beginning the journey toward enhanced professionalism.

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

On the Way Up

Who knew back in 1970, when I had hair halfway down my back and was playing bass guitar in a rock band, that someday I would become an internal auditor? I was a young man sneaking out of boarding school at night to see performances by bands like The Who and The Jimi Hendrix Experience on the south coast of England. The responsibilities of the work-a-day world, and a career in auditing, had never even entered my mind.

In the summer of 1970, I left school at age 18 and flew to Düsseldorf in West Germany, where my father was serving with the British Army. He arranged a job for me as a civilian driver for the Royal Army Ordinance Corps (RAOC), which I later learned was another name for the bomb disposal squad. Although I wasn't involved in attending to unexploded bombs, the experience was still frightening at times. Take, for example, the time I was detailed to drive three noncommissioned officers to a remote area in northern Germany. I recall sitting around all day, waiting for my three passengers to return. When they did, I was surprised to see they had several boxes filled with various pyrotechnics, including flares and grenades, and were duly loading them into the back of our Land Rover. As we set off for home, I was naturally somewhat nervous. My companions seemed totally unconcerned, which was a little reassuring. But partial reassurance soon turned to major anxiety as they all lit cigarettes. And anxiety soon made way for blind panic as the spent cigarette butts were casually tossed into the rear of the vehicle where the munitions were stacked. To this day, I'll never know how we made it home alive.

By 1976 I had recovered from my stint with the RAOC and was training to become an accountant when I spotted a job advertisement for an internal audit position. I'd occasionally been on the receiving end of audit work and, although the experience had not always been pleasant, I realized that the auditors got out of the office a lot. One of the practitioners I had met told me that he enjoyed the job because of the variety of work and the opportunity to meet a lot of people, both of which appealed to me. I had no idea what I was getting into. I just knew internal auditing looked like more interesting work than accounting.

Through the years I dipped in and out of the profession, leaving it briefly to head an information services department and to be a business support manager, but I always came back to internal auditing. I believe I was drawn to auditing because no two days on the job are alike. Every day is a real challenge, and if you do your job really well - and to me that's the only way to do it — you find you make a real difference in the way your organization runs.

I began my involvement with The IIA in 1987. I'd recently changed jobs, and my then boss suggested that I attend a seminar organized by the local district of a group called The Institute of Internal Auditors. I was impressed by The Institute's professionalism and by the wealth of knowledge and information to which it provided access - within a week I became a member. Before long I found myself co-opted onto the local district organizing committee. By the early 1990s, I had been elected a director of the IIA-UK and Ireland affiliate, and in 1999 was elected its president - a position I held for two years. In 2001, I was elected president of the European Confederation of Institutes of Internal Auditors (ECIIA) and also joined the board of The IIA. My ECIIA colleagues were keen to see a European on The IIA's Executive Committee and persuaded me to put my name forward. I subsequently spent two years as international secretary before being nominated for the position of vice chairman-professional development.

In terms of my internal audit career, I can honestly say that the best decision I ever made was to get involved as a volunteer with The IIA. I've had the privilege of meeting and sharing ideas with the brightest minds in the profession as well as playing a very small part in helping to shape the future of The Institute.

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