As has become my custom, I like to begin each New Year with a blog post laying out resolutions internal auditors should consider for the coming year. In past years, I have focused on specifics regarding anticipated regulatory changes, market and economic challenges, and occasionally I've weighed in on how the political landscape might influence what we do. In 2017, I believe we all need to take steps to prepare the profession for the long-term future.
Beyond the well-documented challenges of cyber threats, compliance risks, and shifting demands on talent, growing stakeholder interest in expanding internal audit's role toward strategic advisory roles has put the profession in a potentially precarious position. Indeed, a number of reports produced last year by The IIA's Internal Audit Foundation as well as other respected organizations painted a stark picture for the profession.
In short, these reports warned that unless internal auditing adapts to the new reality quickly and efficiently, it may not be able to meet and exceed stakeholder expectations.
Below are five resolutions for the New Year that I believe are essential to meeting the growing demands and challenges on the profession. Every internal auditor should consider them as we forge ahead in 2017.
Resolution 1: Be responsive to stakeholders – This would seem obvious, but we should remind ourselves daily that responding to stakeholder demands is essential to becoming trusted advisors to management and the board. You must become a master in your organizations' mission, strategies, objectives, and risks.
Resolution 2: Focus on talent management – Examine the skills most in demand to help your organization and recruit or train your team to fulfill those demands. It is important to work with management and the board to identify those essential skills and look for best options to get them.
For non-CAE practitioners, you should be cognizant of what skill sets best serve your organization and invest personally in growing those skills.
Resolution 3: Revolutionize your processes – There is comfort in having a deep understanding and trust in processes that you have used and perfected over the years. However, we cannot afford to rely on processes that fail to account for how demands on the profession are changing.
While we should never abandon the fundamentals of engagement planning, fieldwork, assessment, and reporting, we must learn to work faster and smarter, such as expanding use of data analytics and carefully weighing and leveraging new technology.
Resolution 4: Aggressively advocate internal audit's value and capabilities – Internal auditors as a group are loathe to brag, but it never hurts to remind management and the board what we bring to the table. Stakeholders can develop a myopic view of what internal audit does (e.g., providing assurance on the accuracy of financial reporting or regulatory compliance).
It is, therefore, imperative that management and the board understand internal audit's full spectrum of potential services and the value of having an independent and objective view of all processes from operational to cultural to strategic.
Resolution 5: Advocate for good governance and internal audit's critical role in it – Ultimately good governance practices are what make or break companies, and having an independent and objective evaluation of the effectiveness and efficiency of those practices is critical to success.
I believe every organizational failure includes a breakdown in governance somewhere along the line. Too many of the recent high-profile scandals had clear governance breakdowns that if recognized and addressed could have avoided the problem.
By acting on these resolutions in 2017, not only will you strengthen your skills and improve the value internal audit offers your organization, you will be positioning yourself and your organization for the be best chance of success in the future.