As we prepare to celebrate The IIA’s 75th anniversary, I thought it would be an appropriate time to reflect on how internal auditing’s role has evolved during my 40-plus years as a practitioner. The changes I’ve witnessed are extraordinary, paralleling key shifts that occurred during the profession’s growth and evolution.
When I began my journey as a staff auditor with J.C. Penney Co. in 1971, the role of an internal auditor was vastly different than it is today. I was first assigned to visit stores and other support units strictly to verify compliance with company policies and procedures. We were all asked to be mindful of internal fraud as well. Back then, managers did not always welcome us with open arms.
From the late 1960s through the 1970s, The IIA made great progress in advancing internal auditing as a profession. We adopted a Code of Ethics, launched the Certified Internal Auditor (CIA) exam, and issued professional standards. As a staff auditor, I was excited about these initiatives and was especially pleased to be able to sit for the first CIA exam in August 1974. Passing that exam had a very positive impact on my career — I received a promotion and was assigned greater responsibilities.
During my years with J.C. Penney, the audit function continued to evolve as it did in many organizations around the world by taking a more active role in helping the company achieve its business objectives. Management asked us to participate on numerous task forces and committees to address key organizational challenges. When the company undertook a strategic evaluation, we participated on the strategy team with senior management. When The Committee of Sponsoring Organizations of the Treadway Commission issued its Internal Control–Integrated Framework, internal audit and legal were asked to lead the review of our company control structure and to determine where improvements needed to be made. And when the U.S. Sarbanes-Oxley Act of 2002 was enacted, internal audit played an important role in developing the processes for ensuring compliance and was actively involved in quarterly evaluations, including reporting to the Audit Committee.
Our relationship with both management and the Audit Committee continued to improve over the years. In the 1970s and early 1980s, we may have been perceived by some as a necessary evil or as corporate cops. As we developed our capabilities to better add value, we evolved into a trusted business adviser.
My journey as an internal auditor has been an incredible one because, rather than remaining stagnant, our role progressed over time and led to internal audit’s recognition as a critical need within the organization. I was very fortunate to work for a company that was not only receptive to having an internal audit function but constantly challenged and encouraged us to be real contributors and to candidly share our thoughts and recommendations on how to strengthen overall control processes. The question that we all need to ask ourselves is what each of us needs to do to keep advancing the profession within our organization so that we can be viewed as not only relevant, but as a valued, indispensable asset.