Let's cut to the chase! The past decade has seen a rise in stature of the internal audit profession that is unparalleled in its history. Leading the way have been the men and women who led internal audit functions in enterprises around the world. In the past few years, I have had the privilege of getting to know many of them and the departments they lead. I am confident when I say that the overall caliber of chief audit executives (CAEs) in 2011 has never been stronger!
I have been in the internal audit profession long enough to remember when there was still a grain of truth in the stereotype that accountants and auditors, by nature, were bean counters who hovered over 16-column spreadsheets. Today's internal auditors, however, must know much more than how to count beans. They must understand "how the beans are grown, harvested, and even marketed." No one in the internal audit function has to be more keenly adept at these tasks than the CAE.
In the past decade, boards and senior management have come to recognize the pivotal role a CAE can play in helping the organization enhance internal controls, risk management, and corporate governance. In fact, many organizations today cast a broad search when seeking to fill the CAE role rather than routinely promoting the next in line from the audit department. That is a sign to me of the importance that is being placed on acquiring the right talent for the next CAE.
It's also the CAE who, in most cases, is joined by nobody else but a CEO in a corporate structure in having his or her performance directly reviewed by, and being directly accountable to, members of a board of directors. That alone, beyond all the other executive developmental pressures of a CAE's job, has ensured — and will continue to ensure — the elevation of the caliber of the CAE.
During my tenure with PricewaterhouseCoopers, I had the opportunity to work with CAEs in more than 75 Fortune 500 internal audit functions in the United States, plus scores of others around the world. From my experience, modern CAEs are agents of change who not only understand the business of their enterprise, but also are capable of building and sustaining relationships and developing the key internal audit talent supporting them.
Are there opportunities to enhance the caliber of CAEs beyond where they are today? Absolutely. But, the same also can be said of CEOs, chief financial officers, and the rest of the corporate C-suite. I seriously doubt that more CAEs have been involuntarily replaced than CEOs.
I have shared these thoughts on modern CAEs not simply to serve as their "cheerleader." Instead, I want to put my thoughts on record so that they can be weighed in various discussions currently going on about this important topic.
I welcome your views on the relative strengths of the leaders of our profession.